Plans for a mixed-use development that would include a new movie theater on Fraser Street and Beaver Avenue remain at a standstill until the State College Borough Council ends a dispute over land ownership.

The dispute continued Friday when the council met to discuss possible organizations to undertake the site's re-development.

"The Downtown Improvement District has theater operations in hand but can't do anything until the borough relinquishes the land," Downtown Improvement District (DID) director Teresa Sparacino said.

Planning Director Carl Hess showed the council presentations of two possible organizations for ownership, one being the DID.

"The first option would be a Re-Development Authority, which would be the best control mechanism for Borough Council," Hess said.

Council member Cathy Dauler added that a recent state law change spurred the idea of a Re-Development Authority (RDA) in efforts to revitalize downtown areas -- not just in larger cities, but in small communities.

"The members would be comprised of residents of the borough appointed by the mayor, whereas the DID doesn't require board members to be residents," she said.

Hess said the RDA would benefit the council because it can reject and modify any development ideas and allow more flexibility for future re-developments, whereas the DID is restricted to the confines of the areas with which DID members are associated.

The second option would be to transfer the property to the DID, which would select and negotiate with a developer for the theater, adding that the borough has a representative on the DID.

"I think [Borough Council has] a level of comfort working with the DID rather than a public bid," Sparacino said. "Our hope is that they choose to work with us."

Hess said the DID is independent and the State College Planning Commission could influence but not control their board, which would be a disadvantage for the borough.

Each option would require that a developer eventually submit a plan to the Borough Council and Planning Commission. An expected 18 months lie ahead before construction can even begin.

"Regardless of how we go with this, it isn't going to happen overnight," Hess said.

After choosing an owner, the next step will be to send out proposal requests for a developer.

"Council has the veto authority at the end," Borough Manager Tom Fountaine said. "If the Re-Development Authority is chosen and has a plan, a 'take it or leave it' relationship won't be successful -- there needs to be corroboration."

Council member Janet Knauer said that if the RDA were chosen, finding staff members could be a problem.

"The RDA will need staff to operate on its own behalf and the borough needs its own staff to do its job, plus more once this project begins," she said. "Who is going to be appointed to them for research and other tasks?"

DID member Dolores Taricani said she would prefer the council choose to work with them instead of the proposed RDA.

"Those of us serving on the DID for five or 10 years have a true commitment and a third of the board owns property downtown," she said. "Trust should be placed with the DID."

Further meetings on this issue have not been decided but the council is trying to rearrange agendas due to the urgency associated with the decision.

"I want to see, in black and white, the two disadvantages of the two options and what will offer [Borough Council] the most protection," Council President Tom Daubert said.