Keystone Health first buyer in Southgate redevelopment project

The project to break up and redevelop Southgate Shopping Center in Chambersburg has its first buyer.

Keystone Health will buy the building that once housed Gold's Gym in Southgate Shopping Center, with plans to turn it into a community health center. Keystone is the first third party to purchase a parcel of the property since the start of a project to redevelop it into a mixed-use neighborhood, according to Guy Shaul, the Borough of Chambersburg's community and economic development specialist.

The Keystone Health community health center was the only site explicitly named in a design concept of what local leaders and stakeholders hope a redeveloped Southgate will look like.

The health center will likely offer urgent care, family/internal medicine, pediatrics, obstetrics, community outreach, dental, behavioral health, and insurance enrollment services, Keystone Health CEO Joanne Cochran said, via a spokesperson. She expects the facility to be ready to open in summer 2024.

A land development plan has not yet been submitted to the borough.

Once opened, Keystone will operate Chambersburg's only urgent care west of U.S. 11.

Keystone Health is Franklin County's only federally qualified community health center, and as such must follow certain rules that ensure services are accessible, including by cost, to underserved communities.

Cochran co-founded Keystone in 1986 to provide medical care to migrant farm workers and has overseen its expansion to a full-fledged health care system serving 59,000 patients each year. Keystone had a facility at Southgate more than 20 years ago, and she has wanted to open one there again for years because there are many patients in the area, she said in a borough news release.

"Keystone’s focus has always been on primary and preventive care," she said in a later email. "We are much more concerned with the outcome of the care we deliver than the number of procedures we perform. We want all of our community residents to have access to their own doctor, or other provider. We want our patients to have access to affordable medications and have a place to go for loving, non-judgmental care that will never be denied because of lack of funds. We want our patients to have a 'medical home' to go to when they are sick."

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Redevelopment of Southgate

Transforming the property into a mixed-use neighborhood was a key component of the Elm Street Neighborhood Plan when the borough first began participating in the state grant program in 2007. 

More than 14 years later, community meetings over many months resulted in a design concept for a mixed-use neighborhood that includes affordable apartments and townhouses, retail spaces, commercial buildings and outdoor areas.

Chambersburg Borough Council in April executed a sales agreement that allowed Chambersburg Area Municipal Authority, a volunteer board that works with the borough on economic development projects, to buy part of the 14-acre property identified as the first phase for redevelopment. Through a leaseback agreement, the borough will manage the property until it is sold in parts to developers. The municipal authority took over the leases of tenants and collects rent, which it remits to the borough.

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 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 former Gold's Gym building.

The borough has until October to authorize a sales agreement for phase two, which encompasses the area in the northeast corner of West Washington and Cedar streets.

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

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Chambersburg seeks to attract buyers to Southgate

The borough will soon release what's called a "prospectus" document, which will describe the investment and redevelopment opportunity at Southgate with the goal of attracting more buyers and investors, according to Shaul.

"The prospectus will outline opportunities available for those who wish to invest in the project, including specific opportunities to buy and redevelop lots within the shopping center. The prospectus will have minimum requirements for investors, to include obligations and rules that are standard in the real estate business. Investors would then have an opportunity to submit proposals to buy and redevelop the lots inside the shopping center," he said.

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