Plans for a $90 million project to transform the one-time St. Joseph Hospital property into a mix of office, retail, and both market-rate and affordable housing took a baby step forward Monday night.

By a 3-0 vote, Lancaster City Council Community Planning Committee members Faith Craig, Jaime Arroyo and Xavier Garcia-Molina agreed to advance a request to rezone the property to facilitate the project. The measure, which would change the main hospital grounds at 250 College Ave. from “hospital complex” to “mixed use” zoning, will get a first reading at the full council meeting on Aug. 11.

The decision came following a presentation of the project, which will be a joint venture between Baltimore-based Washington Place Equities and affordable housing developer HDC MidAtlantic in Lancaster. Washington Place Equities plans to convert the old part of the hospital into 150 to 175 market-rate apartments while turning the new wing into 40,000 to 50,000 square feet of office space. Washington Place also plans to build around 30 townhomes in the area that is currently a parking lot behind the old hospital.

HDC’s end of the deal involves building around 120 units of affordable housing, two 30-unit buildings near the hospital in phase one, with 60 townhomes on the hospital property in phase two. Tenants in the townhomes could have an opportunity to purchase their homes well below market value after 15 years under one plan being considered by HDC.

The inclusion of affordable housing as part of the project was a key concern expressed by city officials in talks with UPMC Pinnacle, which shuttered the hospital in February 2019, and with potential developers of the site.

Addressing criticism of the number of affordable housing units, which comprise 30% of the project, council president Ismail Smith Wade-El praised the amount of affordable housing included, saying it was a big step in the right direction.

“It has not happened in this community at that volume in years,” said Smith Wade-El, who emphasized that council is trying to have affordable housing included in all development projects. “We have a way to go, but 30% is far and away the best we have seen in Lancaster in a long time.”

The decision to advance the measure to full council came after council heard comments from about a dozen individuals who were pretty much split. Most of the opposition came from people identifying themselves as members of Put People First Pa., who argued the project would lead to more gentrification. Opponents expressed concern that the building should stay ready to be used a hospital.

Supporters, most of whom lived near the hospital, argued that the building is not about to get used again as a hospital and that they welcomed the mixed-use concept, which will include 10,000 square feet of ground-floor retail. The change also has the backing of the county and city planning commissions.

Because a rezoning proposal for the old Lancaster Family YMCA property, which is now owned by Penn Medicine Lancaster General Health, is already on the agenda for council’s Aug. 25 meeting, a special meeting will be held on Aug. 27 for a public hearing and possible vote on the former St. Joseph rezoning.

Penn Medicine Lancaster General Health wants to rezone eight parcels adjacent to Lancaster General Hospital to “mixed use.” It is requesting the rezoning to allow it to partner with Exton-based developer the Hankin Group, which would build medical and administrative offices for LG Health and develop the residential and retail aspects of the project.

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