Capitol View suitor walks away, mayor disappointed

After months of negotiations, New York City developer Jacob A. Frydman said he will not bail out the bungled Capitol View Commerce Center project at Cameron and Herr streets in Harrisburg.

Rumors have buzzed around Harrisburg for months about whether a private developer would rescue the approximately $28 million project that broke down in the spring of 2008.

But Frydman, who also wants to lease the city's parking system for 75 years, said there were too many headaches surrounding the long-stalled and half-built abandoned structure. The cost to finish construction also was too high in a bad economy, he said.

He said he was not able to determine what the cost would have been to complete construction of the 215,000-square-foot building.

Frydman was interested in leasing it for office space and retail, and also planned to lease space to Advanced Communications. David Dodd, who owns Advanced Communications, also owns the Capitol View property and ran the project into the ground, contractors that worked on the project, said.

"There have been a lot of liens filed. There are a lot of issues," Frydman said. "There were roof problems because of the storm (from several weeks ago). There isn't one deal breaker. It was costs and building methodologies. We have conducted a due diligence, looked at it and concluded that based on market conditions and based on cost that we are not going to proceed with that building."

Reed’s office expressed regret that a deal could not be reached with Frydman. But there is still hope for the center since other investors previously expressed interest in the project, wrote Matthew S. Coulter, the mayor’s spokesman, in an e-mail.

Commerce Bank will conduct a new analysis of the building throughout the next few weeks. After that, efforts to work on a deal with other private investors will continue, Coulter said.

“Frydman’s decision to pull out of the project may now open the door for others to take a look at the site,” Coulter wrote. “Several prospective investors had expressed interest in the purchase of the facility.”

Capitol View was supposed to be a shining example of how private and public investment could team to turn a brownfield site into economic growth and job creation when ground was broken on the building in 2006.

Dodd, who was developing the project under the moniker Cameron Real Estate, was going to relocate his printing business into 115,000 square feet of the building and lease the remaining space.

With about $7 million invested, Commerce Bank/Harrisburg is the largest private backer of the project. There was about $17 million in public money promised for the project, from which Dodd has spent at least $8 million, according to financial records provided by Harrisburg Mayor Stephen R. Reed's Office of Economic Development.

Almost all the contractors working on Capitol View walked off the job last spring when Dodd stopped paying them. Various regional contractors have said Cameron Real Estate owes them millions of dollars.

Most contractors have filed liens against Dodd. Some are suing him, Commerce Bank and the city, which acted as a clearinghouse for the money. Contractors have filed suits against the city and Commerce Bank for not keeping them up to date on where the project stands, they said.

This item was modified from its original version to add comment from Mayor Stephen R. Reed's spokesman.