The Southgate Rehabilitation project could have a whole lot more issues than anyone realized

November 11 – A public meeting with the Chambersburg Area Municipal Authority was held yesterday to discuss a possible rehabilitation of the Southgate Shopping Center.

Chambersburg Borough Council would like to take $4 million in COVID relief money the borough received to take on the project. They’d also like the Franklin County Commissioners to add another $2 million to it. 

The property has a number of issues and private developers haven’t touched it.

One person got up in the meeting and said that there are some people who don’t want to see this property redeveloped. 

Jansen said, “I’m tired of these vague smears of our community. I’m really tired of it. There was no evidence offered. We know of no such resistance in the way that it was implied. I’m tired of that being thrown out there as a red herring for people to get all hot and bothered about.”

Ryan said, “We just don’t want to take money set aside for COVID and overpay for something. I go back to borough leadership. If you’re so hell-bent on buying this piece of property, resign your positions, find some investors, find the gal that said we don’t want to have that property developed, buy it yourself and put the skin in the game. These are my tax dollars. Now we’re also hearing of folks getting the storm water runoff bills. People going from $10 a month to $100 a month. Property owners going up to $1,000 a month. Why don’t we take that money that is the people’s money in the first place and help them with some of these pressures of the storm water bills that are showing up on people’s doors now. To a great deal of shock.”

About 25 people showed up at the meeting.

Jansen said, “It’s the first time this many people came. In fact the next meeting will be also in Council Chambers so it can accommodate. The bottom line was they admitted that the whole sewer system under the thing is shot. That has to all be replaced. They talked about how the borough would be the owner and they don’t know how long that would last. They said this is going to be a years process of course for the whole thing. It seemed like there’s just so many unknowns and the 90-day period, there’s no pressure, I don’t believe for that to only be 90 days. Questions as to whether for something like this, that should be, especially over the holidays when we know a lot of stuff doesn’t get done. Could they easily extend this? I don’t think that’s something that has to be done in 90 days.”

Barkdoll said, “Based on the scope of all of these things that you’re describing, like the storm water under the property, I had not heard that previously, 90 days doesn’t seem sufficient because if they now need to have some more in depth engineering studies done about the storm water system, maybe the water system in general or the infrastructure in general underneath of that property, 90 days is not going to be enough time. We know that these things can take months. I haven’t heard anyone bring up might a developer need some kind of a phase 1 or a phase 2 environmental study done on that property. If that’s needed, you’re looking at months. Ninety days does seem awfully fast. To Pat’s point about the storm water, my understanding is these COVID funds, they could be allocated towards those sort of projects, so whatever would need to be done to address storm water upgrades, storm water management issues, that could be done and it would effectively reduce those bills that everyone is now receiving in Chambersburg. We know this is coming. This is going to be in all municipalities. This is part of that Chesapeake Bay remediation issue so this is going to be a real hit in people’s pocketbooks as they start getting their updated water and sewer bills.”

Jansen said, “They are going to do an environmental study. That was mentioned. Would that include then a full evaluation of that sewer or not?”

Barkdoll said, “Probably not and it would also depend if it’s a phase 1 or phase 2. They would take core samples from around that property, test the soil. It could also involve water testing. I don’t know enough about the history of the tenants on that property to know were there people there over the years that were disposing of oil or gas or other hazardous substances? Are there any tanks buried under the ground? If any of those things are true and I don’t know that they are. I want to emphasize that. I’m not saying any of those things are present there, but if there is any evidence found in an environmental study that those kind of things are there, well this thing suddenly turns into a much more expensive, much more time consuming project.”

Jansen said, “They went into executive session. Now the lease agreements, which they wouldn’t let them know about, with the tenants there, until they made this agreement to buy, which again they still have the 90 days to get out of it if they find out it’s not a good deal. The members of CAMA were going to find out about that in executive session. I don’t believe that will be release to the public at all, but that has to do with what are we getting from these tenants? What do we owe to these tenants? What kind of maintenance? Why wasn’t Paran management and Joe Shafran ever fined? Are we going to take out fines and things that they should have been taking care of out of this $4 million they want to give them or not?

Ryan added, “And how about all those lawyer fees? I lay this out at borough leadership and the borough council for years. I heard it oh, we’re going to strike a hard letter. We mean it this time. We’re very, very angry and we’re going to write a strongly worded letter after letter after letter.”

Jansen asked, “Couldn’t they have taken legal action?”

“Yeah,” Ryan said, “How about we get the refunds back on that after our legal eagles and the borough council, I blame them for where this is now.”

Barkdoll wondered, “Why hasn’t there been an enforcement action brought over the years because you’re right. You could go back through archives over the years and see all kinds of complaints, threatened citations. I’m not aware of anything that has ever been done and it is an interesting question. Why isn’t the borough pursuing that? And one other point about these leases. I would like to hear more about these leases. The law in Pennsylvania is whether it’s the borough or a private developer, if they acquire the property, you acquire it subject to the existing leases. It is not uncommon in the commercial world to see leases of 20, 30, even 50 years. Well I would want to know how many of those leases are set up that way and if they’re these really long-term commercial leases how many years are left on them because if the borough acquires this what if one of the tenants still has another 20 or 30 years left on a lease? Are they then getting into potential legal issues if the building’s going to be torn down and redeveloped? I haven’t heard anyone bring that up.”

Jansen said, “There was a vague reference to taking care of them or until we can settle.”

Ryan asked, “So the borough would have to buy out the lease?”

Barkdoll said, “They would either have to buy it out or honor the terms. If they’re going to tear the building down, they’re obviously not going to be able to honor the terms and I don’t think any of this is being calculated into the redevelopment costs. What if one of those tenants has 30 more years left on a long-term lease? The costs could be hundreds of thousands of dollars alone just on the unused lease portion.”

Ryan said, “It is amateur hour what is happening with this. You know who was noticeably absent from this? The Downtown Chambersburg Incorporated folks, which would have a direct impact. I’m a store front here in downtown Chambersburg. I’ve got a restaurant. I’ve got a candy store. I’ve got folks that are on the other side of the fountain here that also have businesses. So you’re dumping 4 million. You’re going to spit 20, 30, 40, 50 thousand dollars maybe to some of the downtown businesses that have suffered through COVID. Then you’re going to take 4 million of my tax dollars go buy this turkey of a property. And where was Downtown Chambersburg, Incorporated on this? You didn’t hear anything and it would have a direct impact on the rest of the businesses on South Main Street.”

“Absolutely,” Barkdoll said. “All of those stakeholders I think should be at these meetings and at the table offering their input. It absolutely would have an impact on the downtown business community.”

Jansen said, “I don’t think any of them were invited, but I’m also a little bit disturbed. Why aren’t you more proactive in wanting to be a part of it? I get this from oh well we weren’t invited. They didn’t say they were coming. How about we all stop that nonsense and we realize we do need these stakeholders at these meetings? Please issue the invitation and stakeholders please inquire as to why I’m not there and be willing to give some input.”