Pennsylvania TimesLeader - December 10, 2007

 

Vonderheid: Condo developer hire near

By Jerry Lynott

ilkes-Barre – Build mixed-use development in downtown. Done. Hire a developer for the loft condominiums in the complex. Nearly done.

The selection of a developer is in the final stages, said Todd Vonderheid, president and chief executive officer of the Greater Wilkes-Barre Chamber of Business and Industry.

What seems like a long time getting to this point really isn’t for Vonderheid, given the scope of the more than $30 million project spearheaded by the chamber.

“We’re ensuring it’s done correctly,” he said.

The chamber and the yet-to-be-disclosed developer are likely to be the first within the city to put condos on the market, ahead of the estimated $100 million project that includes converting the Hotel Sterling into residential and commercial space and much further along than the major makeover planned for the former Murray complex on East Ross Street.

After conducting a national search for the developer, chamber representatives visited communities to see the firm’s work and the chamber is structuring the terms of the contract for the developer it will partner with on filling the living space. The developer also is doing its own due diligence before investing millions in the project, Vonderheid said.

In the meantime, the upper floors that can accommodate up to 28 condos sit empty more than a year after the main tenant, R/C Theatre Wilkes-Barre Movies 14, began screening films. Most of the street-level retail space is vacant too, except for a Quiznos franchise and Jannuzzi’s restaurant.

The chamber is in talks with another company to take over the management of the theater and retail space in a separate deal from the loft developer. The slow pace of attracting retail tenants prompted the theater owner to put Carlsberg Management Co. of Los Angeles, Calif., a company it has worked with in the past, in touch with the chamber.

Vonderheid said he is pleased with the progress on the residential component of the project. Perhaps the expectations on the front end of the project were not articulated well, he added.

When construction began, he was a Luzerne County commissioner. He left in June before completing his four-year term to return to the chamber, this time to take the top job.

“I think we’re way ahead of schedule,” Vonderheid said.

In comparison, he pointed out, real estate next to the Cinemark theaters in Moosic sat vacant for three years before it was leased and that land was a short drive from nearby exit 182 on heavily traveled Interstate 81.

The chamber and the other developers see their projects as critical to the downtown revitalization. Vonderheid and Alex Rogers, executive director of CityVest, the not-for-profit development corporation renovating the Hotel Sterling, said they took on projects that private investors avoided and are acting as developers of last resort.

Daniel Siniawa, developer of the Murray complex, said he had just returned to work after being out of the office for medical reasons and was unable to clear his schedule to comment on his project.

Rather than working against one another, the three projects “will leverage each other” to spur additional investment in the downtown, Vonderheid said.

Rogers agreed, saying the projects feed on each other. Add in the development of the land adjacent to the Susquehanna River across the street from the Hotel Sterling and the city’s efforts to revitalize the downtown grows.

“It only makes living downtown more attractive and more appealing,” Rogers said.

Author of  “The City: A Global History,” and authority on economic and social trends Joel Kotkin cast a skeptical eye toward such projects.

Last year he was in town to speak at the Conference of the Small City hosted by the Joint Urban Studies Center.

“I remember taking a walk around,” Kotkin said and when he came across the Northampton & Main project, wondered, “Why are they doing this when all the stores around it are empty?”

The focus on big developments that take up a lot of space and money is often at the expense of the basics, argued Kotkin, a presidential fellow at Chapman University in Orange, Calif.

“It always seems they try to throw the Hail Mary pass,” he said. Investments in infrastructure, education and the economy provide a greater return and create wealth and jobs.

Pennsylvania, in general, has lots of nice attractive, affordable towns and “they ought to build around that,” he said.

Such small steps have already been taken and have given organizations like CityVest confidence to take the bigger strides.

A CityVest project involving four residential properties near Wilkes University has encouraged Rogers that people want to live downtown. At a cost of “just south of a million dollars,” CityVest renovated a double block and two single-family houses in the area of South Franklin and Ross streets. The once-blighted properties are back on the tax rolls.

The cityscape further north looked equally ugly before the Hotel Sterling project began. “That building cast a dark shadow over downtown,” Rogers said.

It’s since been gutted and cleaned out. Two adjacent buildings were demolished and a parking lot in the rear of the hotel was reacquired.

The architectural drawings for the project are being refined and that will lead to construction at a still-to-be-determined date, Rogers said. “It’s hard to give specific dates on when one phase ends and another begins.”

The concept remains the same, however; commercial space on the lower floors and between 40 and 45 high quality residential units above, he said. The residences can be either two bedroom units with a study or three bedroom units.

The condos at Hotel Sterling and Northampton & Main would be attractive to empty nesters, couples who want to scale down from a large home, and young professionals.

“Now we’re trying to attract people downtown who have choices in their housing options,” Rogers said.

The projects offer choices as the nation’s population changes, especially with the aging of baby boomers.

There are more than enough single-family housing units to meet the demand for the next several decades, said Robert Puentes, a fellow in the Metro Policy Program at the Brookings Institution.

In its “Back to Prosperity, a Competitive Agenda for Renewing Pennsylvania,” study released in 2003, the Washington, D.C.-based think tank advocated including small mixed-use projects in the state’s economic development programs aimed at older communities.

Smaller housing units, like those in the mixed-use projects downtown, are in demand, Puentes noted. Whether the local projects offer rental units or condos is not an issue. “The important thing is that there is housing being built downtown,” he said.

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