ALLENTOWN, PA-The commonwealth is poised to convey up to 40 acres of vacant surplus land at Allentown State Hospital to the Allentown Economic Development Corp. Under an anticipated agreement with the state legislature, the land is slated for age-restricted senior residential development.

The property appraises at approximately $35,000 an acre, according to the state Department of General Services, which would take the appraised aggregate value to above $1 million. Jerome Frank, interim director of the AEDC, tells GlobeSt.com, the firm "will sell it in an open bidding process. Preliminary discussions among people who know real estate suggest it will sell for multiples higher than the appraised value."

Under agreement with the state, proceeds from the sale to a private developer will be split 80% to the state and 20% to the city of Allentown. "Several steps have to take place," Frank says. "We have to enter into a formal agreement with the state," which he estimates will occur within 15 days, "and the state legislature has to vote to approve the conveyance," which he expects within 30 days.

The AEDC board has not yet provided full guidelines for proceeding with the sale, but Frank says, "I suspect it will go out for RFP. We work with developers all the time, and a lot of them will want a piece of this action." He expects the process of evaluating developers' RFPs to take a year, "and the selected developer will have to commence construction within a year of obtaining the award."

"The sale of this land will breathe new life into property that has been unused by the state," says Gov. Ed Rendell in a statement. "Selling it to the city not only will return it to the local community where it will support revitalization efforts, but it will give seniors a safe place to live that will improve their quality of life and beautify the neighborhood."

The 214-acre hospital campus on Hanover Avenue borders Allentown and Bethlehem. The state Department of Public Welfare operates the hospital, which once housed up to 2,000 mentally ill patients who farmed the surrounding acreage. The population has now dwindled to fewer than 200, and they no longer work the land.