Penn State’s Board of Trustees unanimously approved Wednesday morning for the university to enter into a ground lease and purchasing agreement for two campus hotels.

Penn State plans to sell the Penn Stater Hotel and Conference Center and the Nittany Lion Inn to a third-party company, Scholar Hotel Group, while retaining ownership of the land. The deal is expected to be finalized this fall after the terms of the contract are negotiated this summer. Both hotels are expected to maintain their services once the contract is signed as part of the ground lease agreement.

“While specific plans between Penn State and Scholar Hotel Group are being defined, the University’s goal is to support students, faculty, staff, visitors and community members,” Sara Thorndike, senior vice president for Finance and Business and treasurer, said in a release. “Though still in the preliminary stages of this process, the University is focused on supporting employees who work at the Penn Stater. There will be a variety of employment opportunities for current hotel employees with the new operator or in other areas at Penn State.” 

During the fall 2021 semester, the university started studying its options for the future of the two hotels, which included potentially selling or leasing the properties. According to the university, an “extensive analysis” showed there is value in divesting from hotel operations at University Park.

“While both hotels have served the University community well for decades and hold a special place in Penn State history, after the in-depth evaluation to examine hotel operations, Penn State has made the determination that divesting from the hotel businesses will enable us to focus on our core missions that remain teaching, research and service,” Thorndike said.   

While the Penn Stater Hotel will remain open moving forward, the Nittany Lion Inn, which has been closed since March 2020, is expected to remain closed until 2024.