Millersville students, staff and residents may have heard about a covert plan by Student Services, Inc. (SSI) to tear down several homes on George Street next to the Sugar Bowl and replace them with a strip mall. Many Borough residents were and may still be concerned about this; a letter to the editor in the Lancaster New Era/Intelligencer Journal helped to spread the story.
“When the article came out, that was the first we heard about it,” Robert Sempsey, Chief Business Officer at SSI and Student Lodging, Inc., said on Monday.
Millersville Borough Councilman Phil Lastowski, who called Sempsey when he read about the George Street rumor, said that the borough has a good relationship with SSI, and that the company makes an effort to communicate and be considerate of the Millersville community. He said on Sunday, “They [SSI] have a zoned area on which they can build, and as long as they stay within that area, it’s fine.”
Sempsey said he has no idea how the rumor might have started. Perhaps it is rooted in residents’ mistrust of a company that, over the years, has bought dozens of properties in the area and turned them into student facilities. It is actually SSI’s younger sister corporation, Student Lodging, Inc., that has bought so much property in the borough.
SSI, incorporated in 1956, is a 501©(3) nonprofit corporation: this is a tax category, said Sempsey, that means the company is a “purely public charity.” To keep its tax-exempt status, SSI must donate a certain percentage of its profits to Millersville University. The company gives the school almost half a million dollars each year, and it also donates money to the Borough and the police and fire departments, Sempsey said.
Many SSI employees are alumni of Millersville, noted Michelle Perez, associate vice president for student affairs. The atrium in the SMC is named after alum Robert Slabinski, who is the CEO of the company. Sempsey has worked for SSI since he was a student at MU.
To save money, the university has outsourced many services to SSI and Student Lodging, Inc. SSI manages the Student Memorial Center, although MU owns the building and the land it is on. SSI owns the Chryst Writing Center and several houses on campus. In some cases, the company leases these buildings to the university; in the case of Chryst, the university is able to use the building at no cost in exchange for SSI’s use of office space in the SMC.
Student Lodging, Inc., which was incorporated in the early ’80s, is a very large operation; it manages 1100 off-campus beds and has partnered with the university on the massive new dorm complex that will replace older dorms whose renovations would have been too costly.
Student Lodging, Inc., secured $180 million in bonds for the new dorms. Even after room-and-board costs for students go up, this will take 30 years for the company to repay. But when it is finally paid off, said Michelle Perez, the company will donate the buildings to the university.
MU is the last school in the state system of higher education to build new dorms through a public-private “P3″ agreement, Sempsey said. According to dot.state.pa.us, a P3 agreement “transfers the responsibility of a facility’s engineering, construction, operation and/or maintenance to the private sector for a defined period of time; allows the private sector to perform by contract a service previously provided by the public sector; and ensures the private firm receives payments either from existing revenue sources or through the collection of new tolls or user fees.”
Student Lodging, Inc., is intent on keeping its customer base – that is, students who need housing. Last winter, the company bought a 25-acre estate that consists mostly of woods and runs along East Cottage Avenue and Bordner Run, which is a stream that flows down to the Conestoga River.
“We had heard that there was a national developer sniffing around, looking to purchase that land,” Sempsey said.
According to Lastowski, the couple that sold the property to Student Lodging had originally planned to work with a company to develop the land themselves. But then the housing market went bust and developers lost interest.
Still, said Sempsey, “National developers – sometimes the market doesn’t matter to them.” And if the land had been developed, a shortage of demand for housing might have been created.
Sempsey said that he and his colleagues also worry about absentee landlords; when non-locals rent out properties, he said, they aren’t around to address tenants’ problems.
Even more upsetting to Student Lodging, the money leaves the area. “Profits are taken elsewhere,” said Sempsey, “not given back to the community.”
So, will Student Lodging build more housing on their recently acquired 25-acre site?
“As far as SSI was concerned,” said Sempsey, “it wasn’t really a piece of land that needed to be developed at this point in time. We have an agreement with the university and the biology department for them to use the wooded part of the area for scientific study.” The corporation rents the two agricultural fields on the property to a local farmer; the house is being rented to a couple.
But what if the university grows and demand for housing grows along with it?
“There are no plans for it,” Sempsey said of the land. “It’s a tough piece of property to develop. It’s very rocky and sloped.”
“Student Services is here to stay, and the Borough isn’t going away anytime soon,” said Borough Councilman Phil Lastowski. “So it’s good. It’s good that we can live together well.”