The largest affordable housing development project proposed in Lancaster city in decades may lose funding if an ongoing lawsuit filed by neighbors is not resolved soon, according to the developer, HDC MidAtlantic. In a recent court filing, the company asked the Lancaster County Court of Common Pleas judge to dismiss the lawsuit, citing a May 31 deadline to secure financing from a key investor. HDC has a May 31 deadline to keep $1.25 million in Low-Income Housing Tax Credits from the Pennsylvania Housing Finance Agency, which is a major funding source for the $23.4 million project. The lawsuit, filed over zoning approval the project received last January, has caused HDC to delay closing on the purchase of the College Avenue property, and it cannot be delayed again.
Other funding sources for the project include $1.25 million in county American Rescue Plan Act funds, $1.5 million from the Steinman Foundation, $750,000 from the United Disabilities Services Foundation, and $172,000 from the Pennsylvania Neighborhood Assistance Fund. Plans call for demolishing a one-story office building on the site and building a 67,000-square-foot building in its place. Units would be aimed at households making $11,000 to $40,000 per year, and 12 would be reserved for people with physical disabilities.
Neighbors have raised a number of concerns with the project, including its size and height compared to neighboring homes. The city’s planning commission approved the project in September, but a group of neighbors appealed the decision to county court. HDC asked the judge to dismiss the lawsuit last April, and its request is still pending. The state agency is committing an additional $4 million in American Rescue Plan Act funds to the project, but HDC’s request for the additional funds has been neither approved nor denied. The hospital redevelopment has support from the administration of Lancaster Mayor Danene Sorace, which has set a goal of adding 2,000 housing units by 2026 in order to address a shortage of housing in the city.