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Commission rezones Polyclinic campus parcels to Commercial Neighborhood, approves subdivision to enable redevelopment
Summary
The Planning Commission denied the applicant’s request for Downtown Center zoning and instead approved rezoning the 6.36‑acre Polyclinic hospital campus to Commercial Neighborhood; commissioners also approved a subdivision splitting the property into four lots to facilitate redevelopment, while requiring coordination with staff on conditions.
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The Planning Commission denied a requested change to the Downtown Center (DC) zoning for the former Polyclinic hospital campus at 2601 North Third Street and instead voted to rezone the site to Commercial Neighborhood (CN). Commissioners also approved a subdivision that divides the 6.36‑acre campus into four parcels to effectuate phased redevelopment.
Planning staff recommended against a Downtown Center designation because of the site’s distance from the defined downtown center and the significant differences in allowed development and uses between DC and surrounding neighborhoods. Staff instead recommended rezoning to CN, saying the CN district would still permit most uses the applicant described — including multifamily, retail and office — while preserving community oversight through special‑exception review for certain uses (for example, hotels and some entertainment that are allowed by right in DC). Staff noted the property contains multiple institutional buildings — a 1926 structure of about 216,444 square feet and a 1957 building of about 83,876 square feet — and that the campus has large surface parking and garage capacity (the applicant cited roughly 446 spaces on site and in a nearby garage).
Applicant representatives from Penmark Harrisburg Holdings argued for the Downtown Center designation to provide additional flexibility for redevelopment plans the team described as large and potentially phased (several hundred residential units across buildings, boutique‑hotel options, self‑storage contingency plans and retail). Penmark representatives emphasized the time and cost of redeveloping the historic institutional campus, noted their intent to pursue historic‑tax credits on portions of the property, and said they preferred the regulatory breadth of DC to reduce the need for future discrete zoning relief requests.
Public comment included both supporters and residents expressing caution. Several nearby residents and neighborhood organization representatives said they support redevelopment and the prospect of new retail and housing but asked for more notice and fuller explanation of what a DC designation would allow; some urged caution about opening the site to development types that could alter the immediate neighborhood’s character. Planning commissioners discussed the difference between DC and CN largely in terms of permitted uses and scale; some commissioners suggested a text‑amendment approach or case‑by‑case special‑exception approvals would address the applicant’s flexibility needs without granting a full Downtown Center district across a noncontiguous Uptown parcel.
After discussion, the commission approved a rezoning to Commercial Neighborhood with the planning bureau’s recommended conditions and approved the proposed four‑lot subdivision to enable redevelopment. Staff said developers would still be able to seek special exceptions or other relief for specific uses (for example a hotel or self‑storage) if needed; the bureau noted CN and DC have identical off‑street parking requirements and that the property’s existing parking supply would reduce immediate parking conflicts. The approvals were recorded with the conditions in the planning bureau report and the subdivision will allow phased redevelopment and separate permitting by parcel.

