A new student apartment building could replace the Days Inn Penn State hotel in State College if plans recently submitted to the borough move forward.

Developer Core Spaces submitted a preliminary land development plan on August 20 for a six-story residential building at 240 S. Pugh Street.

The Chicago-based company has been expanding its State College presence since 2019. That year it acquired five downtown apartment buildings for $102 million and in early 2021 it purchased Park Hill apartments for $23 million, with plans to renovate each. In September, Core Spaces will begin demolition work for a new 12-story residential and commercial building at the corner of East College Avenue and Hetzel Street.

“Well, Core loves the State College area generally,” Joe Gatto, managing director of acquisitions for Core Spaces, wrote in an email. “[The Pugh Street development] will be our fourth project that we’re working on here. We’re grateful to be part of the community and feel lucky to have the chance to expand our relationships in it. We’re excited for the chance to work on this project in particular due to its incredible location. We think the site’s proximity to the heart of downtown and topography will allow us to create something truly special that the whole borough can be proud of.”

The Days Inn building, which also includes tenants Mad Mex restaurant and Brewsky’s Bottle Shop, is owned by Centre Hotel Associates and the hotel is operated by State College-based Hospitality Asset Management Company (HAMCO).

HAMCO Chief Operating Officer Edward Tubbs said the sale of the property has not been finalized and noted that the owners had not been actively looking to sell it. The hotel, which is 2016 and 2017, was named Wyndham Hotel Group’s Days Inn Brand Hotel of the Year, “has always performed very well,” Tubbs said, and had weathered the economic impacts of the COVID-19 pandemic.

“The hotel was not for sale,” Tubbs said. “Core Spaces approached us and asked us if we would entertain a purchase, which we said we would entertain a conversation for them to purchase the property…

“Any type of real estate transaction like this takes time and there’s procedures and processes that have to take place. Core will do their due diligence. That’s kind of the path that they’re on at the moment, their due diligence process. So we don’t have a timeline at this point. The hotel will continue to operate normally for the foreseeable future.”

Gatto said that “it’s still very early in the process,” but the hotel “will certainly be open through football season.”

The other two tenants of the building are expected to continue operating as long as the hotel remains open, but Tubbs said he could not speak to what their future plans might be if the redevelopment plans move forward.

Mad Mex’s parent company, Pittsburgh-based Big Burrito Restaurant Group, has not yet responded to a request for comment. Gatto also said he couldn’t comment on the other businesses’ futures.

“It’s too early in the process to provide comment as there are ongoing discussions with tenants,” he said.

The preliminary land development plans submitted to the borough show a 65-foot-tall building on the property bounded by South Pugh Street, East Foster Avenue, A Alley, and Highland Alley.

It would have 172 units of varying sizes, mostly geared toward Penn State students. Parking would include 264 spaces, with 208 enclosed underground and 56 at surface level.

The sixth-floor plan includes a pool, hot tub, and terrace. Public and private terrace space is included throughout the first-floor plan, which also has a lobby, leasing office, and mechanical spaces.

State College Planning Commission is expected to review the preliminary land development plans during its meeting at 7 p.m. on September 23, State College Senior Planner Greg Garthe said.

The Pugh Street hotel has been affiliated with Days Inn since 1989 after decades of operating as a Sheraton.

Tubbs said it’s possible HAMCO, which operates four other hotels in the Centre Region, could use the Days Inn brand elsewhere in State College if the sale moves forward, but had no specific plans.

“We would always look for opportunities in State College,” Tubbs said. “It’s our home base. If we could find another opportunity, I’m sure we would entertain it.”