As State College continues planning to replace the aging Pugh Street Parking Garage, the borough intends to use eminent domain to acquire a downtown building that’s home to one of the Centre Region’s longest running bars, a long-standing music shop and a popular pizza spot.
Borough council on Monday night approved a resolution authorizing the solicitor to file a declaration of taking — a key step in the eminent domain process — for the building at at the corner of East Beaver Avenue and McAllister Alley that houses The Brewery, Music Mart, Canyon Pizza and Canyon Wings. Council approved a similar resolution to acquire the neighboring rental house at 142 McAllister Street.
Council members Gopal Balachandran and Divine Lipscomb voted no on the measures. The other five council members voted yes.
The borough plans to construct a new garage on the site of the buildings and the current McAllister Street Deck to replace the 50-year-old Pugh Street garage, which officials have said is near the end of its useful life and will be torn down once a new parking structure is completed.
Eminent domain allows a government entity “to take private property for public use in return for just compensation,” according to Pennsylvania law.
The borough’s plan to acquire the property was “shocking” to Jay Horgas, one of the owners of both The Brewery and the building. Horgas only learned of the resolution on Monday afternoon when contacted by a StateCollege.com reporter for comment, about seven hours prior to council’s meeting.
“That’s unbelievable,” Horgas said. “They never said anything to us. There has not been one lick of dialogue about this.” He also alleged that he attended a borough meeting in 2016 or 2017 and was told “no” when he asked if State College was planning to use eminent domain to acquire his building for a garage.
Speaking at Monday night’s council meeting with fellow owner Ray Rockey, Horgas called the lack of communication “a little bit distasteful or unacceptable.” Rockey noted that The Brewery dates back to the late 1960s, while their tenant Music Mart has been located in the building for 35 years. Another tenant, Canyon Pizza, started down the street in the 2000s and moved to the building in 2016.
“This is our livelihood,” Horgas said. “This is what Rockey and I do. …We’re not big entities. We’re just two local guys hashing it out.”
Solicitor Terry Williams acknowledged the borough did not contact the property owners in advance, but said that is typical in the process.
“When you’re condemning a property, the object is to adopt the resolution authorizing the condemnation, which fixes the timescale which damages are to be calculated,” Williams said. “There now will be a great deal of discussion with the property owners over trying to arrive at the value, trying find a way to accommodate the businesses, find a way to evaluate the damages for the businesses, both for the owners of the building as well as the other tenants.
“There’s an awful lot of work that gets done after that, but practice is you don’t do that in advance, because council may say ‘Well, we don’t want to condemn it.’ Then it’s a moot point.”
Local landlord Rodney Hendricks, who owns 142 McAllister Street, described the borough’s plan as “surprising.” He claimed his property contains the oldest remaining house in the borough. (StateCollege.com has not been able to verify the claim. The property is not among State College’s historic sites or listed in the National Register of Historic Places.)
“In a borough that says it’s about historic zones, I find it interesting that they want to tear down this piece of history,” Hendricks wrote in an email.
The property owners were not the only ones who were surprised they were not contacted by the borough prior to the council meeting.
“I am actually in shock as well,” Lipscomb said. “This is upsetting to me.”
Council member Peter Marshall urged staff to “get with those folks and bring them up to speed on their options and what’s going to happen next.” Council member Deanna Behring apologized to Horgas and Rockey for how they learned of the plan and said she hoped the compensation process provides “the kinds of things you need to keep your businesses going.”
“I don’t think anyone here wants to see your businesses leave State College,” Behring said.
According to Pennsylvania law, the parties can agree to damages at any time. Either can also petition the Court of Common Pleas to appoint a panel of “viewers” tasked with determining fair value.
For The Brewery, at least, losing the building would seem to be the end of the line. It’s difficult, after all, to imagine the bar anywhere but the alley basement where it’s served up drinks and an eclectic mix of local and touring live music acts over the decades.
“They’re putting The Brewery out of business,” Horgas told StateCollege.com. “We didn’t put it on the market. We’re not interested in selling. Now they’re going to take it from us through eminent domain.”
Rockey said after he originally purchased The Brewery in the 1990s, the ownership group bought the building specifically so that they couldn’t be forced out by a new owner.
“We’ve done everything the American way and now we’re being told because somebody wants to put up a parking deck that everything we’ve done gets thrown out the window, and I don’t think that’s fair,” he said.
State College zoning excludes much of the parking requirements for new commercial construction, and resident Jeff Leo said the borough should have taken steps to push for more parking to be included in the new high rises downtown.
“All these new buildings, instead of retail space maybe we should have looked for parking space,” Leo said. “I just find it a little bit shocking that you’re planning to take over a local institution. It may be a dive bar, but it’s a local institution.”
Horgas added during the council meeting that the ownership group also offered affordable rent for its tenants.
“We refer to the bar as the four-star dive behind the dumpsters. We are a dive bar. We don’t pretend to be anything else,” Horgas said. “But the other part of it is that we’re also landlords to tenants with reasonable rents. If you look at any of these new buildings coming in, what the students are paying for rent is very different than what we charge for the apartment upstairs and for Canyon Wings, Canyon Pizza and Music Mart. We’re reasonable.”
New Garage Plans
Discussions about replacing the Pugh Street garage date back a decade, and the borough has spent millions over the years to keep the facility usable until a replacement could be constructed.
“There is no book on a 50-year-old parking garage,” Ed Holmes, borough risk manager, said in 2021. “It’s a testament to the way we’ve maintained this structure for all that time. But we are forging new territory here and I think we just have to be prepared for the fact that it’s much closer to the end of its time than it is to the beginning.”
The garage is now “within five years of having to be closed because of the need to maintain it in a structurally sound manner,” Tom Fountaine, borough manager, said on Monday.
For at least a year, the McAllister Deck site has been the likely location for the replacement. Ed LeClear, borough planning director, said during a 2022 Redevelopment Authority meeting that a new garage on the McAllister site would have to be constructed before the Pugh Street garage could be torn down because the downtown could not have 500 spaces offline for an extended period.
The Nittany Performing Arts Centre proposed for the current Pugh Street garage site would include an additional parking garage with 335 spaces, but the venue is still in the planning and fundraising stages and not yet a certainty.
Other options for the Pugh garage replacement were explored before deciding on the McAllister site, Fountaine said.
“There are very limited options, obviously, in downtown State College and so those options have been explored and over the years this site has come to a forefront as a replacement for Pugh Street because of its proximity to Pugh Street,” Fountaine said. “The [Scholar] hotel that it serves also is proximate.”
Eight people spoke about the issue during a public hearing for the borough’s proposed 2024-28 Capital Improvement Plan at the start of the meeting and during discussion of the resolutions to acquire the two properties. Each expressed concerns about the money the borough planned to spend on parking facilities and contended those funds should be invested in bicycle and pedestrian infrastructure and alternative transportation.
The borough’s 2023 capital budget includes $5 million for a new parking structure. The proposed CIP recommends more than $60 million over the next five years for new parking structures, though Fountaine said the Pugh replacement is the only one being planned.
The funding for a new parking facility, however, is only available because of the existence of the borough’s public parking garages, Fountaine said.
“Historically, parking garages are only paid for by parking revenue,” he said. “So if the garage doesn’t exist, that revenue also doesn’t exist. That revenue is projected to support the debt service that comes from the parking structure. I can’t tell you and be able to guarantee we’re going to be able to cover 100 percent of that at this point given inflation in the cost of construction we’ve seen in recent years.”
Design contracts will be brought to council for authorization “in the next few months,” and will give a better sense of the actual cost of the new garage, Fountaine said.
Despite a 2020 study that identified a daily parking deficit of about 700 spaces in the downtown by 2024, the new garage won’t add much, if any, new parking. It will replace the 491 spaces lost from the Pugh garage and the 218 spaces in the current McAllister deck.
“This isn’t an addition of new parking,” Fountaine said. “It’s the replacement of existing parking in that Pugh Street garage that has to be taken out of service.”
Borough resident Matt Herndon, who is likely to win a council seat in the November election, said even if the borough does need to build a new garage it should be on the edge of downtown.
“This location just continues to push car traffic right to the center of our downtown and that leads to actual traffic jams. It also leads to accidents,” Herndon said. “… We should not be encouraging more car traffic into that center core of our city. We should be encouraging cars to park on the outskirts of our town — drive in, stop and then connect via walking, biking, transit, all these things that we could do, to their final destination. Places that don’t have similar private businesses on them that are being displaced.
“Things worked in the past but we need to think differently for our future to have a really functional city as we continue on.”
Several council members said they support investing in and encouraging alternative transportation, but that maintaining parking remains a necessity.
Balachandran said the borough could opt not to build a replacement garage and use the money saved for alternative transportation initiatives, but he warned of unintended consequences.
“One of the things that could happen as a result of reducing that parking is… that it could be that businesses go under, because right now it’s not that difficult to see that we have a lot of vacant space here and trying to get businesses to locate and stay in downtown State College is really, really challenging,” he said.
He added that garage parking could make street spaces available for other purposes.
“If you don’t have parking garages, is that going to put more stress and incentive to have on-street parking? Because maybe if you have more parking garage spaces you end up being able to free up on street parking which could then be used for protected bike lanes on Allen Street or other places in downtown,” Balachandran said.
Behring said it is a time of “transition” that requires the borough to balance priorities and complex issues.
“This borough council is very, very pro-multi-modal transportation…[but] there are a lot of community members who are very car-dependent to do what they need to do,” she said.
“I think this entire city management and council is working toward the transition from cars toward other things in the time of climate change. But we do have some unsafe infrastructure out there and so we’re looking to invest in the infrastructure to maintain what we have during a time of transition while investing in new things as well.”
Marshall noted the large number of people who commute to State College every day.
“Even if you put bike lanes everywhere, you’re not going to bike from Bellefonte to State College,” he said. “You need parking for the people who are working here.”
