A new Harrisburg University building now will be exclusively educational, as the university has eliminated the proposed hotel portion of the project.
In an interview on Friday, HU President Eric Darr said that the university had to remove the planned 197-room hotel from the project because their hospitality partner, Harrisburg-based HHM, also known as Hersha, had difficulty obtaining financing for the construction.
“Everyone agreed that the demand study demonstrated the need for a hotel,” Darr said. “But (HHM’s) finance partner believed that they couldn’t get the return on investment that they required.”
As a result, the downtown building now will be used exclusively by HU for its health sciences programs, simulation labs and other academic needs, serving about 1,000 students.
The building size also has been reduced by about one-third. It now will be around 11 floors and contain some 260,000 square feet of space. Because the building is smaller, the primary construction material will change from concrete to steel, Darr said.
The final design is still being tweaked and will be unveiled publicly on Tuesday at an emergency meeting of the Harrisburg Planning Commission, which must approve the revised building plan. City Council then also must pass it.
Last year, both the planning commission and council approved the original plan for the HU/hotel tower.
When first proposed, HU had hoped its building would be the tallest in Harrisburg, clocking in at over 30 stories. However, largely due to escalating construction costs, the university began scaling down the project, eventually settling on a 17-story building with an adjoining 10-story hotel.
Darr said that, ideally, he would have preferred giving Hersha more time to find financing for the proposed 120,000-square-foot hotel. However, by late 2019, HU decided it couldn’t wait any longer, needing to move forward on its portion of the project to meet its schedule for bond financing and construction, he said.
“Last fall, we decided we were done,” Darr said. “We started into a redesign phase just focused on educational space.”
With the demise of the hotel plan, the third proposed piece of the project, a restaurant, also is being scrapped, he said.
HU has already cleared the site at S. 3rd and Chestnut streets, but hasn’t yet started to build the structure, estimated now to cost about $100 million. Assuming the revised development plan passes muster with the city, HU expects the building to begin to take shape this summer and be completed in late 2021.
“From our perspective, we still believe that there’s a great need for a new hotel in the city and hope that someone can pull it off,” Darr said.