Plans announced for a new Harrisburg office building to house 900 state government employees

New state office building coming to Harrisburg

A new Harrisburg office building to be occupied by offices of two state government agencies will be built on the site now occupied by D&H Distributing Company, the state Department of General Services announced on Thursday. D&H is moving to Lower Paxton Township.

Nearly 900 commonwealth employees who work for two state agencies will be relocating to a new office building in Harrisburg in early 2021 as state government continues to alter its footprint in Pennsylvania’s capital city.

The state Department of General Services on Thursday announced it is entering into a build-to-suit lease with Hudson Asset Advisors LP of Hermitage, Mercer County. Hudson will construct a 120,000 square-feet, three-story structure that will provide more than 1,000 employee and visitor parking spaces at 2525 N. Seventh St.

That property has been occupied since 1952 by D&H Distributing Co., which announced in January it is moving to a building in Lower Paxton Township. D&H’s building will be demolished early next year to make way for the new structure.

Employees from the governor’s Office of Administration Office of Information Technology and the state Department of Human Services will occupy the new building once it is completed. Currently, those employees work in facilities located elsewhere in the city or outside it on the General Services Annex property, the former Harrisburg State Hospital grounds, along Herr Street, and across the Susquehanna River, in Camp Hill.

“We are glad to be able to announce the award of this lease that will put nearly 900 employees into a physically and technologically advanced workspace,” said General Services Secretary Curt Topper in a news release about this announcement. “In addition to being the lowest-cost option, this new building will bring those employees into the downtown area where they can contribute to, and enhance, the local economy.”

General Services spokesman Troy Thompson said the details of the lease, including the cost and terms, will not be available until the contract is executed which is expected to take place later this year. As a result, he said the cost savings to be derived from making this move to vacate the present quarters and move to the new building are not yet known. A rendering of the proposed office building was not immediately available.

Harrisburg Mayor Eric Papenfuse was happy to hear of this announcement because of what it means to the city.

“Harrisburg’s long-term financial recovery benefits greatly when state agencies relocate within the city limits," Papenfuse said in an emailed statement. "I am very pleased about this announcement, as I believe the site provides the perfect relocation opportunity for the 800+ state employees. The commonwealth’s relocation to this corridor also helps to ensure continuing vibrancy in the uptown Harrisburg neighborhood for generations to come.”

Among the Department of Human Services offices to be relocated to the new facility include the offices of medical assistance programs, income maintenance, administration, and children, youth and families including the ChildLine operation. Currently those offices are spread across multiple buildings.

"Moving to a centralized, technologically advanced space creates opportunities to improve processes and create efficiencies that can strengthen our work,” said Human Services Secretary Teresa Miller. “I am excited to see this site come to fruition and look forward to seeing how the new location and its technological benefits can help DHS continue to improve services for people around the commonwealth.”

According to General Services, the new building will be constructed with energy conservation in mind with such features as LED lighting, water conservation measures, minimizing the glare and heat gain, and using recycled materials where practical.

Hudson Asset Advisors, an asset management firm, wasn’t the only one interested in being the state government’s landlord for this project.

Last spring, a group of investors identified as William Penn Holdings purchased the former Bishop McDevitt High School at 2200 Market Street in Harrisburg with the hope of winning this contract. Jeremy Hunter, the principal project organizer, told PennLive if the state didn’t choose their bid, they would look to develop the landmark eight-acre property into retail space including a community gathering area.

In 2016, the state announced plans to build a $24 million facility to house the Pennsylvania State Archives on three acres it acquired between 6th and 7th streets in the city. That building is not yet under construction.

*This post was updated to include the comment from Harrisburg Mayor Eric Papenfuse.

Jan Murphy may be reached at jmurphy@pennlive.com. Follow her on Twitter at @JanMurphy.

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