Downtown Development Penn Traffic building, other large spaces slow to see development

Nov. 27—Amid momentum of development downtown, there's also a lot of square footage for which there is no answer yet.

The six-story Penn Traffic building constructed in 1908 is one of those buildings.

It may be best known for its history as a department store during Johnstown's storied heyday, when the steel mills provided thousands of jobs, or more recently, as the location for the National Drug Intelligence Center, brought to town by the late U.S. Rep John Murtha, an influential Johnstown Democrat.

NDIC occupied 90,000 square feet of the building and employed 300 people at one point before it closed in 2012, a couple of years after Murtha's death.

Today the building is 30% occupied, mostly by courtrooms for federal trials, bankruptcy hearings and appeals for unemployment.

There's about 160,000 square feet available for lease, said Darrel Holsopple, manager of operations for Newfield Properties LLC, a property investment business that has owned the building since the Penn Traffic Co. went bankrupt in 2004, he said.

"We need jobs," he said. "I'm all for bike trails, and this stuff people talk about, but we need jobs in Johnstown."

Two hundred jobs were added to the area's employment rolls in 2017 with opening of Convergys — now Concentrix.

Holsopple said that's the type of company he's hoped would move downtown.

The Ohio-based call center moved into Lower Yoder Township, where it handles communications for financial software company Intuit Inc.'s QuickBooks online accounting program.

Holsopple has been in Johnstown for 37 years.

"I don't know where we are going from here," he said. "Trying to lease space in Johnstown is hard."

The City of Johnstown has been in the state's program for distressed municipalities since the 90s.

"We tried to bring tech companies — 10 years ago there was talk of Washington, D.C., companies hunting for space outside of the 'blast' zone," Holsopple said.

Technology has changed.

"The infrastructure left behind by NDIC is antiquated, no good anymore," he said.

And the cost of renovations is steep.

'Justify ... renovations'

There's also been no major new tenant for several years at the more modern-looking glassy building at 551 Main St., owned by property developer Rick McQuaide.

"It's currently vacant," he said. "We are searching for a tenant that would take enough space for us to justify making renovations."

McQuaide said he bought the three-story, 45-square-foot building from a sheriff's sale for $5,500 in 2018.

"Nobody has really gotten serious and wanted a lease," he said, noting that he recently showed it to a medical business that ended up choosing to locate in Richland.

A unique feature of the 1980s insurance building is that it is connected to the CamTran bus depot and public parking garage.

"There are distinct advantages to the building," he said. "People who looked at it were interested that the bus depot was there. Anyone in the county can be dropped off right at the building."

McQuaide said he plans to get the building occupied, and he hopes recently announced federal funding for the city will help.

Of the $24,448,164 in discretionary federal funding that was awarded to the city on Nov. 16, $3.6 million is for the CamTran Downtown Intermodal Transportation Center.

"I think the more development along Main Street, the more it will attract people downtown," McQuaide said.

At the corner of Franklin and Main streets, an 11,000-square-foot building was re-listed for another year. The property at 500 Main St. was purchased in 2019 for $10,000 by Hazak LLC. That company also bought three other Main Street buildings and has since found a tenant for one and plans to open a brewery at another.

But the building at 507, at one time a Rite Aid drug store, hasn't received any potential tenants interested in paying the $7,000 per month rent.

Howard Hanna Real estate agent Barry Gallagher is handling the listing.

"They (Hazak) would like it to be a food or entertainment venue, but are open to other ideas," he said.

Part of the problem it is that its size and shape make it suitable for big box stores — now rare in central business regions.

"Big boxes are leaving downtown areas in general," Gallagher said, "but people want things closer, so that's hope for downtowns coming back strong."

Many buildings with large footprints remain empty, Gallagher said.

But he's spent his 25-year career listing Johnstown properties, and he's never been as busy as he has in the past two years, he said.

The COVID-19 pandemic in 2020 accelerated the growth of small markets with lower costs of living and room to breath easier than in dense cities.

"There are other major buildings in the city that are in the works, in terms of pulling possible deals together and consortiums together," he said.

If smaller businesses increase foot traffic downtown, bigger buildings will become more attractive, he said.

"Big-boxes will go to where the business is," he said.