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TheBurg is a free monthly newspaper that begins to tell the stories that, put together, describe the community of greater Harrisburg: the people who live, work and travel here; the families that make their home here; the merchants that do business here.

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January 2012

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TheBurg began covering the Harrisburg area in January 2009. All of our past issues are available to read as PDF files.

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Harrisburg Area News

First National Bank Plans Move to Downtown Harrisburg

Jan. 26 -- The regional headquarters of a major bank will occupy most of the remaining available space in the prominent new office building under construction at N. 2nd and State streets in Harrisburg, developer WCI Partners said today.

First National Bank of Pennsylvania, the largest affiliate of F.N.B. Corp., will take up the entire first floor of the building, as well as much of the second floor. The first floor will be a full-service bank branch, while the second floor will become the bank's regional headquarters, which is re-locating from Susquehanna Township.

About 40 employees will work in the bank's new Harrisburg location.

“We are excited to establish our regional headquarters in what we consider to be the number one new location in downtown Harrisburg,” said Lloyd Lamm, regional banking executive for the bank’s 15-county Capital Region.

WCI has already signed up the law firm of Buchanan Ingersoll & Rooney as anchor tenant for the building. The firm will occupy the upper three floors of the five-story building upon its completion, expected in July.

Including the law firm and the bank, about 110 employees are expected to work in the building, said WCI.

“Anytime we can bring companies into downtown, it’s good for our business and good for the city because it generates revenue as well as solid employment opportunities,” said J. Alex Hartzler, WCI managing partner.

Council Affirms Tax Hike; Asks Feds to Probe Incinerator Deals

Jan. 24 -- Any hope Harrisburg residents may have had to reverse a planned property tax increase was quashed tonight, as City Council reaffirmed its support for the hike.

The unanimous vote came after state-appointed receiver David Unkovic told the council that the .8 mills tax increase would be included in his financial recovery plan for the city, which is due for release by Feb. 6.

"The real estate tax here is necessary as a component to turning the city around," Unkovic said.

Unkovic added that his report will ask for sacrifice from all entities, including the city's creditors. Unkovic has broad authority to draft and implement a recovery plan, but, under the legislation creating his position, he cannot unilaterally raise taxes.

On Dec. 29, the council passed the tax hike as part of its $54.3 million budget for 2012. However, it since has reopened the process to make adjustments. Previously, several council members had indicated that they might reconsider the increase.

The hike will raise taxes on the average Harrisburg homeowner by $50 to $100 per year.

Councilman Brad Koplinski said that the council will consider several changes to the budget, including reinstating the positions of health officer and senior accountant, both of which were cut in the previous spending plan. The council also will add $850,000 to the fire bureau budget to account for anticipated overtime.

The revised budget, which must be passed by Feb. 14, does not include reinstating the terminated positions of two mayoral aides: Ombudsman Bryan Wade and Communications Director Bob Philbin. Otherwise, the council:

* Unanimously approved the final land use plan for the Susquehanna Art Museum, allowing it to begin renovating and expanding the historic bank building at N. 3rd and Calder streets in Midtown. The council added a condition that a certified contract compliance officer must be hired to ensure that the project follows city hiring and contracting rules;

* Appointed Kirk Petroski as the new city clerk. He had been the acting city clerk.

* Sent ordinances that would increase residential and street parking fees -- and would install 88 new parking meters in Midtown -- to council committees for further consideration.

The council also unanimously passed a resolution asking for a federal investigation of the numerous financial transactions relating to the incinerator retrofit. Last week, the Harrisburg Authority issued a damning report of how incinerator upgrades were contracted, handled and financed.

Among other charges, the report said there was evidence that City Council members, a decade ago, may have received money from the Reed administration in exchange for supporting one or more incinerator bond issues.

Tonight, Councilwoman Susan Brown-Wilson publicly stated that, when she was first elected to council, she found out about a "special" fund, which she suspects originated from incinerator financings. That fund allowed council members to spend money on projects solely at their discretion.

"I was told, 'We have council money to spend,'" she said. "I wondered: how is that possible?"

She believes the fund totaled $500,000, but that she'd have to "pull the records" to find out exactly how much was in the fund and where it came from.

"It was like three-card monte," she said. "People just said . . . play along to get along."

Susquehanna Art Gets Tacit Council Support

Jan. 18 -- Work on Susquehanna Art Museum’s new home may begin in the next few months after the City Council’s Community and Economic Development Committee tonight gave its tacit approval and put the project on the council’s agenda for a full vote.

“It’s something Harrisburg needs,” said Councilwoman Susan Brown-Wilson, the committee chair. “I think it’s going to be a great addition.”

Brown-Wilson and two other council members, Sandra Reid and Wanda Williams, heard a presentation by the architect and museum board members on the museum project, located at N. 3rd and Calder streets in Midtown.

The city’s land use boards approved it last fall and now council must grant its approval before work can begin on the estimated $6.7 million project. It includes a two-story, modern-looking 25,820-square-foot addition to the 95-year-old former bank building.

The new museum will include four galleries, classroom/conference space and offices. The bank building, which will be restored to its historical appearance, will serve as a reception area and gift shop.

The museum will use a parking area off James Street for 12 spaces and provide two spaces along N. 3rd Street for handicapped parking.

The museum’s mission includes exhibiting artworks from other museums around Pennsylvania, including those in Philadelphia and Pittsburgh. Construction of the addition will include climate controls, storage areas and a loading dock, all required to meet the requirements for the American Association of Museum accreditation.

SAM board member Andrew Giorgione assured the committee that minority contractors would have the opportunity to bid on the project, but council members also wanted SAM to hire a compliance officer to ensure this.

Depending on when council approves the project, Giorgione said the project’s finish time may not be until the first half of 2013.

Report Blasts Incinerator Deals, Reed Administration

Jan. 18 -- The Harrisburg Authority today issued a damning report on the city's bungled incinerator, criticizing former Mayor Stephen Reed and several of his closest aides for pushing through a failing project at any cost, one that eventually would land the city in bankruptcy court.

The report's charges are numerous, including conflicts of interest, lack of due diligence and recklessness. The report deals with the most recent incinerator upgrades, which began more than a decade ago, when the city and the authority selected Barlow Projects, Inc., as the lead contractor to fix the broken facility.

"The outcome of the retrofit, including the current debt crisis related to the city,

reflects the accumulated effects of bad decisions on critical project issues, ranging from contractor selection at the outset to the $60 million in debt taken on in 2007 when the facility was still incomplete and not fully operational," the report states. "In some cases, the authority, the city and the county took strained positions on state law regarding municipal debt financing and other issues to allow the retrofit and related financings to proceed."

Perhaps most troubling, the report states that the city benefited financially from backing bonds issued for the incinerator, also known as the resource recovery facility (RRF).

"The city, the county and FSA (bond insurer Financial Security Assurance) provided guarantees or insurance on some (as to the county and FSA) or all (as to the city) of the facility’s debt," the report states. "They received significant guarantee fees or insurance premiums for doing so, knowing the risks associated with default, both in 2003 and even more so in 2007, when all evidence pointed to the RRF’s inability to service existing and contemplated debt upon completion."

The report takes a step-by-step approach to describe how the incinerator disaster unfolded. The story starts in the 1990s, when the city and authority, frustrated by repeated breakdowns and EPA violations, needed to fix the long-troubled facility, which had never worked properly since its first firing in the early 1970s. After learning about Barlow from a magazine article, the city and authority eventually hired the company to get the incinerator running smoothly and to expand capacity, as the county also wanted a place to send its trash.

Barlow promised that the upgrade would cost about $45 million, an amount that officials believed could be paid for by fees from increased trash flows. The outcome was far different, says the report.

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