Former Harrisburg hospital for sale, eyed for apartments

A view of Penn Center Harrisburg, with the three-building campus marked by orange lines. (photo/submitted)

A piece of Harrisburg history is on the market — and potentially headed for a makeover.

  • Penn Center Harrisburg, the former Polyclinic Hospital campus, is being listed at an asking price of $22 million — and with a sketch plan showing the office property as an apartment complex.
  • “I think that the office need in Harrisburg is low,” said Michael Daley, a partner with property owner Penn Center Harrisburg LP. “It would seem that something else should be done with it to maximize the project.”
  • Daley said he and his partner, Burton Morris, are in their 70s and ready to retire.

What’s the campus: A series of three buildings totaling more than 270,000 square feet in the 2600 block of North Third Street and listed on the National Register of Historic Places.

  • The original hospital building was erected in 1925-26 and expanded over the years, according to Pennsylvania Heritage.
  • In 1996, the hospital joined with Capital Regional Health System to form PinnacleHealth, which was bought by UPMC in 2017.
  • Penn Center Harrisburg paid $4 million for the property in 2004 and spent another $15 million to $20 million converting it from a hospital to offices, said Daley, a Vietnam veteran and former assistant attorney general for Pennsylvania. He also worked in private practice for 20 years.
  • Morris worked for the attorney general’s office, the governor’s office and law firm Eckert Seamans.

Are there any tenants: Yes. The Pennsylvania Department of State, the Pennsylvania Department of Drug and Alcohol Programs and the U.S. Small Business Administration.

  • Daley said they occupy portions of the main hospital building, the largest of the three at roughly 170,000 square feet.
  • The Department of State is the largest tenant, with about 83,000 square feet, Daley said. Its lease expires at the end of March 2023, he said.
  • The other two buildings, totaling around 100,000 square feet, are empty.
  • UPMC has offices and practices in the area that are not part of the sale listing.

What could take their place: An apartment complex with 239 units and about 700 parking spaces. That is according to a sketch plan developed by Benedict Dubbs of Murray Associates Architects in Harrisburg and Craig Dunkle, a first vice president at real estate firm Marcus & Millichap , which is listing the property.

  • A buyer could tweak the plan, said Dunkle. But, he added: “We think we have a pretty good and efficient design plan.”
  • Dunkle said a buyer has signed a letter of intent to purchase the property. 
  • He declined to disclose additional details but said he has been working with city officials on zoning issues to pave the way for converting the property to residential use, including a 20% portion set aside for affordable housing.
  • Marcus & Millichap also is listing the former Federal Building in Harrisburg, which a developer hopes to convert into luxury apartments.

The trend: Developers have been flocking to the multifamily construction, with new apartments sprouting all over.

Editor’s note: This story has been updated to note that UPMC offices and practices in the area are not part of the sale listing.

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