.
News Around The Burg
September 2011

Another Piece Falls into Place for Midtown Arts District

Sept. 28 -- A Harrisburg businessman plans to transform a dilapidated building into new "arts-oriented" space, right in the center of the city's emerging arts district on N. 3rd St.
Eric Papenfuse, owner of Midtown Scholar Bookstore, said he has reached an agreement to purchase 1320 N. 3rd St., currently a boarded-up, graffiti-marred building that is one half of the double-storefront of the West End Republican Club.
"We plan to develop arts-oriented space, including artist's studio space, something that will complement the Susquehanna Art Museum, as well as the (Midtown Scholar) bookstore and the Broad Street Market," he said.
Papenfuse said he will pay $55,000 for the three-story, 3,452-square-foot building, which needs to be totally rehabilitated. The Republican Club will retain the adjacent building at 1322 N. 3rd St., which is its long-time home.
The sale is expected to close on Nov. 1, said Papenfuse.
This building would be the fourth that Papenfuse owns on the block. In addition to Midtown Scholar Bookstore at 1302 N. 3rd St., he owns both 1300 N. 3rd St., which houses Garden Fresh Market & Deli, and 1306 N. 3rd St., the home of the Mantis Gallery and Moviate film co-op.


Mayor, Council Remain Far Apart as State Takeover Looms

Sept. 27 -- Mayor Linda Thompson once again will ask the City Council to pass her financial recovery plan as a last-ditch effort to prevent a state takeover of Harrisburg.
Thompson said she would convene a meeting with the council, which three times before has rejected Act 47 financial rescue plans by identical 4-3 margins. If, after the meeting, she feels the council would support her plan, she would scheduled a fourth vote, she said.
"I will request a meeting with City Council members to address the plan one more time," she said.
At a later council meeting, however, the chasm between the two branches of government appeared to be as wide as ever and the chances for reconsideration dim.
Unexpectedly, Councilwoman Wanda Williams introduced a resolution to hire attorney Mark D. Schwartz to represent the council on matters related to the possible state takeover.
"We would rely on Mr. Schwartz to advise us on what to do next," said Williams. "I'm not going to sit here and let the state take over the city of Harrisburg."
Because the matter was not on the meeting agenda, the council suspended the rules and approved Schwartz by a 4-2 margin, even though two council members -- Patty Kim and Kelly Summerford, both of whom voted no -- had never heard of Schwartz, who had not submitted a resume to the council, nor been interviewed.
The mayor's press conference and the council's meeting capped an eventful day, in which the state House of Representatives overwhelmingly approved an amendment that outlined how a state takeover of the city likely would work.
In sum, the governor would declare a fiscal state of emergency in Harrisburg, giving the state broad authority over city finances and operations. The state then would ask the Commonwealth Court to appoint a receiver, for a term of two years, to oversee implementation of a financial recovery plan. City officials would be marginalized, with the mayor and council president reduced to two members of a four-person advisory committee.
Assuming the mayor and council cannot agree on a financial recovery plan, the state is expected to pass the takeover legislation in late October. Gov. Tom Corbett said he would sign the bill.


Philly Company Seeks to Open Charter Schools

Sept. 20 -- A Philadelphia education nonprofit wants to open two charter schools in Harrisburg next year, potentially giving parents another option of where to send their children.
American Paradigm Schools plans to apply for two charters by the end of the month and hopes to be open for the 2012-13 school year, said Stacey Cruise, the company's CEO. One school would be located in central South Allison Hill and another in Midtown, probably near the 6th Street corridor. The exact sites have not yet been determined.
"American Paradigm Schools and our staffs are so excited to be here in Harrisburg," said Cruise.
The schools would be K-4, expanding after several years to K-8. Each school eventually would have 675 students, Cruise said.
The 10-year-old company, which emphasizes technology, science and the arts in its curriculum, currently operates two charter schools in Philadelphia. The Harrisburg school board must award the charters before the schools can open.
This fall, the school board also will be examining a charter school application recently filed by Mikayla's Place founder Monica Archie, who wants to open the Archie Preparatory Academy Charter School. Currently, the city has just one charter school, the Sylvan Heights Science Charter School.
Harrisburg has had a rocky history with charter schools. One of the largest, the Ronald H. Brown Charter School, closed in 2005 after its five-year charter was not renewed.
The school was headquartered in the historic Moose Lodge at N. 3rd and Boas streets and occupied an entire city block. Those properties went to tax sale last year and eventually were bought back by for-profit charter school company Mosaica Education, which had owned the buildings when the Ron Brown school operated.
Mosaica, however, has now put those four buildings back on the market, asking $3.9 million for the total of 40,000 square feet of space. Last October, it paid $320,000 to buy the properties from local real estate investor and developer Philip Dobson, who paid $188,000 to obtain them in the Dauphin County tax sale.
The buildings, in the heart of the 3rd Street corridor, have been empty, boarded up and increasingly blighted since the Ron Brown school shut down in 2005.


Harrisburg Refills Empty Coffers

Sept. 15 -- Harrisburg has dodged insolvency for a second straight year, as an early pension payment from the state and a deal with the Harrisburg Parking Authority has enabled it to make payroll and meet expenses for the remainder of the year.
Just days ago, the city was in danger of running out of money, potentially missing payroll and not being able to honor a $3.3 million general obligation bond payment. However, the state yesterday sent the city $2.6 million in pension funding, which normally would have arrived next month, and HPA transferred $7.4 million as part of a $10 million loan it secured.
On Tuesday night, the City Council approved the deal with HPA, which extended until 2026 a lease for land beneath three parking garages. The deal, however, was not without controversy as it mandates interest-only payments for the first four years of the loan, which would leave the city with at least $5 million in interest payments and, potentially, much more if the loan goes to full term without being paid back early.


Strike 3: Act 47 Voted Down Again; HPA Deal Approved

Sept. 13 -- For the third time, the City Council has rejected a proposed financial recovery plan for Harrisburg, making state intervention into the city’s finances increasingly likely.
Tonight's 4-3 vote duplicated the previous tallies, with council members Susan Brown-Wilson, Brad Koplinski, Wanda Williams and Eugenia Smith out-polling supporters Gloria Martin-Roberts, Patty Kim and Kelly Summerford.
The denial sets up probable action by the Republican-controlled state legislature, which is considering legislation that would create a three-person financial control board to force the Act 47 financial recovery plan on the city. That bill, currently in a state House of Representatives committee, is expected to be taken up and passed once the legislature reconvenes later this month. Gov. Tom Corbett has pledged to sign it.
Harrisburg is deep in debt after backing bonds issued by the Harrisburg Authority for upgrades to the city incinerator over many years. The authority and the city both have stopped making payments on incinerator debt, which now totals about $310 million. Harrisburg also has racked up increasingly large deficits in its annual operating budget.
In another important action, the council tonight approved by a 5-2 margin an agreement with the Harrisburg Parking Authority that will inject $7.4 million into the city's nearly empty coffers. The agreement allows the city, which has essentially run out of money, to make a $3.3 million general obligation bond payment due tomorrow, as well as meet payroll and other expenses through the end of the year.
The accord with HPA extends for 10 years until 2026 a lease for land beneath three parking garages.
HPA is about to borrow $10 million in a loan expected to close tomorrow. In addition to transferring $7.4 million to the city, the loan will finance repairs to the Walnut Street garage and pay $600,000 to Harrisburg University as part of a settlement with the school.
Debate over the lease extension grew heated at times, as Councilman Brad Koplinski argued that terms of the loan -- an interest rate as high as 10.7 percent -- were onerous. In addition, the loan cannot be paid back during its first four years, as it mandates interest-only payments during that time. Therefore, the city is on the line for several million dollars in interest, even if it raises enough money to settle the loan sooner through asset sales that may occur as part of its eventual financial recovery solution.
Councilwoman Susan Brown-Wilson agreed with that critical assessment, adding that she resented needing to vote before she could study the agreement in more detail. Eventually, though, she voted for the deal because she could not chance a default on general obligation bonds and missed payroll.
"I realize the importance of this," she said. "Other than that, my vote would be no."


Harrisburg Should Prepare for State Takeover, Warns Piccola

Sept. 1 -- State Sen. Jeff Piccola today reiterated his call for a state takeover of Harrisburg's finances, one day after the City Council rejected a second financial recovery package.
Calling the "no" vote "irresponsible and reckless," Piccola urged Gov. Tom Corbett to suspend all state aid to the city until the legislature passes a bill that would force a solution on the city.
"This latest activity or ‘lack-there-of' proves that we cannot wait any longer for a positive outcome and cannot continue down this path of irresponsible decision making and complete lack of leadership by those elected to manage the capital city's fiscal affairs," he said.
Piccola's bill, which would appoint a three-person management board to oversee city finances, is in a state House of Representatives committee. The House, currently on break, will return to session at the end of the month, when action is expected.
The council has twice rebuffed Act 47 financial recovery plans by identical 4-3 votes. Both plans were similar, though Mayor Linda Thompson's revision included additional state funds and the possibility of more concessions from Dauphin County and bond insurer AGM.
The plans sought to eliminate a $310 million deficit tied to repeated upgrades, some botched, to the city incinerator over many years. The plans also outlined ways to reform and streamline municipal operations to bring the city's deficit-ridden annual budget into balance. 
"I will be working with my colleagues in the House as well as Gov. Corbett to ensure my legislation is adopted for it is the only hope for a responsible plan that can put Harrisburg's affairs in order without bankruptcy and without a tax or any new burden on the city's commuters. Such a hike would be a major increase for city wage earners," Piccola said.