The board of trustees is expected to approve an extension of the current lease with Burle Industries on New Holland Avenue at its April 1 meeting.

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1 Paper: Intelligencer Journal (Lancaster, PA) Title: STATE DENIES FINDS FOR HACC Date: March 27, 1997 The state Department of Education has turned down a funding application by Harrisburg Area Community College to renovate the vacant Bon-Ton store on Lancaster's Penn Square In the wake of the rejection, the college announced Wednesday it will extend its lease with Burle Industries through July 31, The college also plans to reconvene the task force that chose the Bon- Ton over a dozen other possible sites.the college had wanted to move into the Bon-Ton building, which was chosen as HACC's permanent Lancaster campus after a lengthy search, in time for the fall 1998 semester. "Our task force will get together again. We'll talk about it and see what other options we want to pursue," Thomas C. Herweg, HACC board of trustees chairman, said. Herweg did not rule out looking for another site. The board of trustees is expected to approve an extension of the current lease with Burle Industries on New Holland Avenue at its April 1 meeting. Lancaster Mayor Janice Stork declined to comment on the news because she was not notified by HACC officials. The state told HACCofficials of its decision not to fund the project on Tuesday. "After the amount of money the city, county, and EDC (Economic Development Corp.) have spent on HACC's proposal, then for this to be released by a press release is really amazing to me," she said. "We were not notified." David Nikoloff, head of the Economic Development Corp., which is facilitating the HACC move, was not available for comment Wednesday night. Bon-Ton vice president Steve Evans remained confident the college will occupy the vacant store. "It seems to me HACC may be treating this with a degree of finality that I wouldn't treat it with," he said when told the task force will reconvene. "We'll take steps to adjust it, as we have many, many times in the past. I find it hard to believe HACC won't continue to work with the Bon-Ton so that we can come up with a new structure. I don't get the impression HACC is reconvening the task force to start the project all over again."

2 The college had sought up to $6 million from the state, according to Dan Langan, a spokesman for the Department of Education. Langan said the decision to deny the funding was based on the building's worth. "The problem is that it's a $6 million application for a building worth $1.5 million," Langan said. "The responsibility of the commonwealth would be to work with the $1.5 million figure. The market value is $1.5 million." The college had planned to occupy 75,000 square feet of the building in September 1998, and eventually double that space. The Bon-Ton building, which has been vacant for two years, currently has 220,000 square feet of space, but plans to demolish the rear portions of the building would leave 162,000 square feet, 12,000 of it for retail use. The total project cost was estimated at $17 million. Herweg said the state's rejection leaves the college with several options. "It does not necessarily kill the deal for the Bon-Ton," he said. "It leaves us several options: find another source of funding, through private enterprise, including the Bon-Ton; or reapply." Herweg said the state "didn't like the way the numbers worked." Langan said the college can modify its proposal and resubmit a funding application. "The college understands the denial. The department stands ready to assist the college and explain other options," Langan said. "This is certainly not a denial of their overall proposal to provide services. This is simply a denial of the request." Bogue Wallin, a partner in RESMA Realty Advisors, which is acting as a consultant to the Bon-Ton in the project, emphasized that the state rejected the financial aspects of the proposal, not the concept. He also remained confident the Bon-Ton project can be saved. "Every deal has its ebb and flow, and while you hate setbacks like this, it doesn't mean it's the end of the deal," he said. "It's going to take some more work. They're reconvening the task force because it was responsible for structuring the original deal."

3 The funding rejection came as welcome news to Lancaster merchant Steve Murray, who hours earlier found out that a judge had called his legal attempt to stop the HACC project "frivolous." Murray has appealed a 1996 decision by the Lancaster Zoning Hearing Board allowing HACC to move into the Bon-Ton building. Lancaster County Court Judge Michael A. Georgelis issued an opinion Wednesday morning that Murray failed to establish that the move will adversely affect him. Georgelis decided that Murray must post a bond to cover financial losses by Bon-Ton because of delays, and scheduled a hearing for April 22 to determine the amount. "I'm not going to stop just because we've got one setback from a judge's decision," Murray said Wednesday evening. "These people, when they went before the zoning board to convert that department store into the college, they have to abide by the law." Murray contends that the zoning application violated the law in many ways, including the lack of a land development plan and inadequate drawings to depict whatthe building would look like after renovations. Meanwhile, Murray said that if the HACC move falls through, there are plenty of people interested in developing the Bon-Ton store commercially. "There's certainly enough people with enough ideas and enough money in this town to turn that building into a first-class, four-star tourist attraction, highlighting the rich history of this area," Murray said. Murray said tourism is second only to farming in generating revenue in Lancaster County. He and other opponents of the HACC move have advocated turning the building into a tourist attraction that would keep it on the tax rolls. "Most out-of-towners who come into my stores say, "This place is great. It's clean, it's interesting,"' he said. "There are so many towns that would give their eye teeth to be in the position Lancaster's in, to have a beautiful property right on the town square, and all those tourists out there." Daniel C. Witmer, president of the Lancaster Chamber of Commerce and Industry, called the funding rejection "a setback to the plan and to the community." He said the chamber's board supports a city location.

4 "Any inner-city location would be supported by the chamber," he said. Terry Kauffman, chairman of the county commissioners, said he was not surprised the state had questions about such a complicated deal. He also said there could be a bright side. He said the state has indicated its willingness for HACC to lease space in the Bon-Ton building rather than own it. "That gives the group the chance to pursue a lease arrangement," he said. "I view that as potentially a positive. We knew the structure of the sales agreement was a real difficult issue." Kauffman said it's possible EDC, or a private developer, could own the building, and lease space to HACC. The Bon-Ton Building through time March The original Watt & Shand department store, a 30' x 60' room, founded at E. King St. by Peter Watt, James Shand and Gilbert Thompson C. Emlen Urban designs a 4-story building on Penn Square Feb Watt & Shand purchased by Bon-ton Stores Inc. of York. Jan Bon-Ton announces store closing. Feb The Lancaster Campus of Harrisburg Area Community College is encouraged by Bon-Ton to locate the school there. March Bon-Ton closes. April Bon-ton building makes final cut from original list of 16 sites. June Lancaster City seeks $250,000 state grant for developing $8 million "Discovery Center." Nov The Lancaster Chamber of Commerce and Industry, Lancaster Alliance, Economic Development Co. and Downtown Investment District announces support of HACC/Bon-Ton plan.

5 June HACC task force endorses Bon-Ton site. Nov Lancaster Zoning Hearing Board OKs plan, but forbids demolition of Heinitsch building next door. Nov organizations involved in deal sisgn letter of intent outlining their roles in $17 million project. Dec Businessman Steve Murray, a project foe, appeals to Court of Common Pleas to stop project. Jan HACC joins The Bon-Ton and Lancaster City in asking court to dismiss Murray's appeal. March State rejects HACC's request for funds.