A State College home builder, known for new suburban housing developments, is entering the Lancaster market with a different type of project.

S&A Homes has stepped in to take over a stalled, 2-year-old project to rehabilitate a former factory in southwest Lancaster City into apartments.

The conversion of the former Schwalm watch dial factory, at 510 Second St., into 40 apartments is expected to cost $6.25 million.

The company plans to begin construction in June, said Mary Kay Eckenrode, S&A development director. The work should be completed in a year.

S&A, which is handling the project out of its York office, completed the purchase of the property on Monday for $520,000 from Ray Deamer, an Ephrata-based developer. Deamer had announced plans in 2004 to convert the building into 46 apartments. Those plans never materialized.

S&A is getting considerable help with project financing from state and local sources. The Pennsylvania Housing Finance Agency awarded $1.2 million in tax credits to the apartment project last year. Lancaster City officials are redirecting $300,000 in unused federal grant funds to S&A. The Lancaster Housing Opportunities Partnership is also contributing $300,000 to the "Dial Apartments."

Much of that funding stems from the 10 apartments that will be made fully handicapped accessible. Under provision of the grants, four apartments must be rented to people with handicaps. The remaining apartments can be converted to being handicapped accessible, Eckenrode said.

S&A representatives worked with the DisAbled for Change & Justice, an advocacy group for people with disabilities, and the United Disabilities Services agency to design accommodations in the apartments.

Those include grab bars, selection on appliances, lower cabinets and placement of light switches — "everything that someone would need to live there with disabilities," Eckenrode said.

One aspect of the project is an office which United Disabilities Services will keep staffed 24 hours daily with a personal-care aide.

The aides, funded through the state Department of Public Welfare, will respond to a call system and set appointments to provide services such as bathing, dressing and feeding, said Zoe Bracci, a service coordinator with United Disabilities Services.

Provision of those services will allow apartment residents to live outside of nursing homes, Bracci said.

She said there is a waiting list for such housing.

"It's been a wonderful project working with S&A. They have been very open to making that property meet the needs of people with disabilities," Bracci said.

The Dial project is being done by S&A's affordable housing arm, which is doing another rehabilitation project in Harrisburg and has previously done one in New Oxford, Adams County.

The apartments have the support of Lancaster City officials. The city Planning Commission last week granted S&A an extension to complete the project.

Paula Jackson, the city's chief planner, said the project is consistent with the goals and objectives of the city's comprehensive plan to adopt and reuse older, vacant and under-utilized buildings and develop market-rate housing.

As another provision for grant funding, monthly rents cannot exceed the fair market rate of $500 for a one-bedroom apartment and $624 for a two-bedroom apartment, Jackson noted.

To live there, residents cannot have an income that exceeds 60 percent of the median income for Lancaster County, or $25,860 for a one-person household and $29,580 for a two-person household, said Jackson.

Of particular interest to the city, Jackson noted, is that the property will remain on the tax rolls.

"It will be a great project and it will do a lot for the neighborhood," said Jackson, who lives in the area.

The 46,000-square-foot factory has stood empty since July 2002, when the Oklahoma-based custom watch dial maker S&S Time Corp. purchased the former Theo R. Schwalm Inc. S&S Time moved the business to Tulsa, Okla.

Schwalm had operated there for more than 50 years.

At its peak in the 1960s and 1970s, Schwalm employed about 250 people and produced up to 5 million watch dials a year, newspaper records show. Many of those dials went into Hamilton and Timex wristwatches.

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