Evolution begins with demolition at Southgate Shopping Center in Chambersburg

Physical work is officially underway on a project that aims to turn Chambersburg's Southgate Shopping Center into a mixed-use neighborhood.

Demolition of the former Gold's Gym building at the south end of the shopping center is largely complete, save for some cleanup work that was happening at the site Friday. The first part of the shopping center to be sold off, the site will eventually host a Keystone Health rural health center.

Scott's Hauling and Excavating will next move across Cedar Street and tear down the building at the south end of the main strip mall, according to a news release from the Borough of Chambersburg. The resulting open area will be graveled over for use as additional, temporary, parking for the shopping center.

That work will put China Wok at the end of the strip mall. The wall it shared with the demolished building will be reinforced.

What's in store for Southgate?

Leaders with the borough and in the community want to see Southgate turned into a neighborhood containing affordable housing, retail spaces, business offices and outdoor spaces. The section of the Chambersburg Rail Trail that runs through the area in the borough's 3rd Ward may also be upgraded as part of a conceptual plan that was designed based on input from various facets of the community.

What Southgate ultimately looks like, however, will largely be up to the investors whose plans are approved by the borough and the Chambersburg Area Municipal Authority. CAMA owns Southgate.

The borough is accepting proposals through July 14.

Borough council and CAMA will choose one or more developers based on how well their plans fit the goal for Southgate. Because the borough does not own Southgate, there is no obligation to choose a developer that offers the best sale price.

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The document published to solicit proposals describes the borough's vision:

"In undertaking the Southgate Redevelopment Initiative, the Borough aspires to promote a mixeduse community development that meets identified needs of the Southgate neighborhood. The Initiative seeks to incorporate much-needed employment opportunities, create a variety of housing options, facilitate top-notch neighborhood healthcare services, retain businesses that provide services to the community, and provide improved and expanded access to recreational amenities."

What will the Keystone Health facility look like?

The Keystone Health wellness center was the only project specifically named on the concept design Keystone closed on the former Gold's Gym property in March.

The health center will likely offer urgent care, family/internal medicine, pediatrics, obstetrics, community outreach, dental, behavioral health, and insurance enrollment services, Keystone has said. The facility should be ready to open in summer 2024.

What's the history of the Southgate redevelopment project?

Chambersburg Borough Council in April 2022 executed a sales agreement that allowed CAMA, a volunteer board that works with the borough on economic development projects, to buy the 14-acre Southgate property in two phases. Through a leaseback agreement, the borough will manage the property until it is sold to developers. The municipal authority took over the leases of tenants and collects rent, which it remits to the borough.

The borough allotted $4.1 million in funding received via the American Rescue Plan Act to purchase Southgate. No local tax dollars were used.

The cost of the first phase comes to $3.25 million. It encompasses the area south of West Washington Street which includes the strip mall that houses Big Lots, Family Dollar, Mercado Latino, Spot Laundromat and other businesses, the large parking lot, and the now-demolished former Gold's Gym building.

The borough in October authorized a sales agreement for phase two, which encompasses the area in the northeast corner of West Washington and Cedar streets and the parking lot across the street.

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The borough will keep about 1.5 acres from the phase-two portion to develop what it calls the Meeting Place Greenway Project. It will be located at the northwest corner of West Washington and Cedar Streets and will extend back to the Conococheage Creek.

The borough recently transferred $365,893 in Community Development Block Grant Funds to pay for the project. To meet the requirements for the funding, it will be an "outdoor facility at the shopping center site to mitigate the effects of future coronavirus occurrences."

The Southgate revitalization project has been a long time coming.

Borough officials and elected leaders spent decades debating what to do to revitalize Southgate, which was a popular shopping destination in the 1970s and '80s but went downhill as shopping habits changed, stores moved out and mismanagement crept in.

The idea to turn it into mixed-use neighborhood came about in 2007. The release of federal funds amid the coronavirus pandemic allowed the borough, through CAMA's ownership, to take on the property.

Before the sale, Southgate was owned by Franklin Southgate LLC and managed by Ohio-based Paran Management.

Amber South can be reached at asouth@publicopinionews.com.

This article originally appeared on Chambersburg Public Opinion: Demolition underway at Southgate Shopping Center in Chambersburg