Blighted Historic Block Set for Mixed-Use Makeover

Published by Teresa Garcia on Sunday, November 1, 2015
Journal thumb November 2015

Royal Square Development is taking an all-or-nothing approach to accomplish what other developers in York, Pa., have been unable to do for years: rebuild one of downtown’s most neglected city blocks into a vibrant live-work-play district. The locally-based developer is leveraging a combination of new markets tax credits (NMTCs) and historic tax credits (HTCs) to convert a cluster of historic buildings on West Market Street into apartments over ground-floor retail space.

The key is to rehabilitate all four buildings at once to better attract business tenants and residents, said Josh Hankey, Royal Square Development’s president and CEO. “There’s no way you can just take one building on the block that’s vacant and blighted–no one wants to be the only retailer on a vacant block,” said Hankey. “The only way to get it done is to take all of them.”

Others agreed with Hankey’s comprehensive approach to West Market Street. “In a micro-economy like downtown, you have to address all the needs, all at the same time,” said Sonia Huntzinger, executive director of Downtown Inc., an organization dedicated to encouraging investment in York. “[West Market Street] is on the major east-west artery for downtown, so the people who normally shoot straight through that street will begin to see activities, open stores, lights on in the evenings and people spilling out onto the streets … That’s going to have a huge economic impact; it will be catalytic.”

Finding a New Purpose

West Market Street was once York’s commercial retail hub, but downtown businesses relocated to suburban shopping centers that began sprouting up in the 1960s. “This just became a block of large, vacant, ‘white elephant’ buildings that nobody really knew what to do with,” said Hankey.

Part of the problem was that the Weinbrom Jewelers, F.M. Woolworth and Zakies night club buildings had different owners who were mostly absent, out-of-town investors. Downtown Inc. helped convince the owners to sell by pointing out the high costs of bringing the buildings up to code.

Once Royal Square Development acquired the buildings, its next challenge was planning the best use of the structures. Downtown Inc. funded a market study to assess housing needs in York’s central business district. It found that there were luxury apartments and dilapidated apartments, but nothing in between. Similarly, there were few middle-of-the-road retail and dining options nearby. Developers decided that the West Market Street project is the answer to filling this housing and retail gap.

The former Police Heritage Museum will become a large retail space, while the Woolworth building will be redeveloped into three ground-floor retail spaces with a 30-car parking lot in the rear. Two stories will be added to the building to provide 21 market-rate rental apartments. The Royal Square Development will turn the former Zakies night club into a restaurant with an adjacent courtyard. The second through fourth floors will house six market-rate apartments and a suite on the top floor. The Weinbrom building will be transformed into six retail spaces on the ground floor, with eight market-rate apartments above.

Fortunately for developers, the buildings are in a historic district and the Weinbrom, Police Heritage Museum and Zakies buildings were approved for HTCs. The façade of the buildings will be restored and historic hallways, doors, trims and stairwells will be preserved. Other than those historic considerations, Hankey said that the buildings will basically have to be gutted to the studs. The plan is to start construction before the end of 2015 and to open by spring 2017.


Project partners agreed that tax credits played a vital role in making the West Market Street project possible. “The project couldn’t happen without new markets tax credit equity,” said Daniel Betancourt, president and CEO of Community First Fund, which provided $8.25 million of NMTC allocation. “This is a project that many developers had looked over for years because the numbers didn’t work.” Betancourt said the high cost of bringing historic buildings up to code was the reason why many downtown York buildings remained vacant.

At press time, Hankey said he was finalizing the NMTC and HTC investor and lender. Another $3.6 million in state Redevelopment Assistance Capital program funds has been applied for and is expected to come from York County Industrial Development Authority. Additional support for the project will come from equity provided by York County Community Foundation. “Frankly, it’s going to transform downtown,” said Jane Conover, York County Community Foundation’s president. “This is helping us ensure that we’ll have a dynamic downtown and city, and it’s crucial to the economic strength of the entire county.”