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$15M mixed-use project secures zoning approvals

A roughly $15 million mixed-use project in southern Lancaster city cleared key zoning hurdles this week.

  • The city’s zoning board on Monday night unanimously approved a raft of variances for the project, shown above, which is designed to create affordable housing.
  • “It’s critically in short supply,” said the developer, Lancaster businessman Jeremy P. Feakins, who said he has owned the site — at 800 S. Queen St. — since 2006.
  • Feakins has long sought to redevelop the tract, formerly home of a store called Rebmans.
  • But his plans gained momentum when the site was included in a tax-incentive area known as an Opportunity Zone, a program established by the Trump administration’s signature tax law, the Tax Cuts and Jobs Act of 2017.
  • “It encourages developers to invest in distressed neighborhoods and turn buildings which are like ours into something nice for the benefit of the community,” said Feakins, a serial entrepreneur who was born and raised in England. He first came to Lancaster in the 1980s.

What’s the project: A new four-story building at the southwest corner of South Queen and Furnace streets, at the southern edge of Lancaster. The project manager is Professional Design & Construction Inc. based in Landisville.

  • The building is slated to include 72 affordable apartments with rents that would be within reach of people earning less than 80% of the area’s median income. Affordable housing is typically defined as costing no more than 30% of income.
  • The project could also bring a cafe, a small grocery and a medical/health care tenant to a section of the city where commerce is sparse, said Feakins, who works out of an office in a corner of the site.
  • His office would be converted into a day care, while an existing small warehouse would be demolished.
  • The zoning variances granted this week cover building height, setbacks, tenant mix, tree spacing and parking spaces. Officials agreed to allow fewer than the required number of spaces.
  • The extra height — about 10 feet — is needed to accommodate stairs leading to a planned roof garden that tenants can use to grow vegetables, flowers and other plants.

What’s next: More development work is needed before construction begins, which may not be until 2022, Feakins said. But the zoning approvals could help spur interest from investors.

  • Feakins said he is hoping to raise about $4 million from private investors, including himself, and borrow the remainder. 
  • Some investors may wait for other milestones, like the issuance of building permit, he said. “But zoning is the big one, in my experience anyway,” he added.
  • Feakins is chairman of Lancaster-based Ocean Thermal Energy Corp., which is developing technology to produce renewable energy and clean water. His development company is called OZ Fund Inc.

The bottom line: The South Queen Street project is one of only a handful of Central Pennsylvania projects taking advantage of the Opportunity Zone program. People with capital gains can lower their taxes by plowing their gains into Opportunity Zone projects.

  • Feakins said he is hoping to undertake other projects in Lancaster, as well as in York.
  • “There’s another city that needs affordable housing. Harrisburg does, too,” he said.

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