Oakland social club files for bankruptcy protection
With its doors shuttered and a growing throng of creditors circling, the iconic Pittsburgh Athletic Association in Oakland filed for Chapter 11 bankruptcy protection Tuesday — 109 years after it was formed as a gathering spot for Pittsburgh’s business and cultural elite.
In a filing in U.S. Bankruptcy Court for the Western District of Pennsylvania, the organization listed assets and liabilities estimated between $1 million and $10 million.
The once prestigious social club, founded in 1908, has sunk deep into debt in recent years amid changing lifestyles, declining membership and dwindling revenue. Operations at the stately Fifth Avenue building have been shut down since midApril when the water was cut off because of $168,000 in bills owed to the Pittsburgh Water & Sewer Authority.
Association president James Sheehan said Tuesday that despite the club’s mounting financial troubles, it hoped to form a
plan of reorganization and reopen.
“The plan is to go to local and national real estate developers to come up with proposals for us to stay in the building, probably in a smaller footprint,” said Mr. Sheehan, a principal at Renaissance 3 Architects on the South Side. “And redevelop the building somehow. There are so many potential uses.”
The association has obtained $750,000 in financing from a subsidiary of JDI Realty in suburban Cleveland to fund operations during the reorganization, according to the club’s bankruptcy attorney, Jordan Blask of Tucker Arensberg, Downtown.
He said there was no official target date for reopening, but the club hoped to be back in business “before year-end, if not sooner.”
In the meantime, wedding receptions and other events that had been scheduled months in advance were being canceled. “We’ve taken steps to contact the parties so they can inform guests and make alternate plans,” he said.
Employees of the club who are owed back pay “will be treated according to the bankruptcy code,” Mr. Blask said. “Hopefully, the [$750,000 in] funding will pay some of those claims and pay employees going forward” when the PAAreopens, he said.
The club’s debts include hundreds of thousands of dollars in overdue state and federal payroll taxes, and bills from utility companies, vendors and contractors.
Among the largest unsecured debts are unpaid pension and other obligations for the club’s unionized workers, according to the bankruptcy filing.
The organization also has defaulted on a $2.6 million mortgage obtained in 2008 from Allegheny Valley Bank, which has begun foreclosure proceedings, court records show.
“Our full intention is to work out a deal to keep the building and bring on a partner, or acquire additional resources to revitalize” the building, said Mr. Blask, adding that the club has hired the commercial real estate firm HFF, Downtown, as an adviser.
The clubhouse, which is listed on the National Register of Historic Places, sits on a prime site across from the University of Pittsburgh’s Cathedral of Learning. The building, land and land lease from an upscale hotel being built on adjacent PAA property is estimated to be worth around $10 million, Mr. Blask said.
As the club’s money troubles have grown, membership has shrunk dramatically. Mr. Blask estimated current membership at 200 to 300, down from around 750 two years ago.
He said the club was planning a membership meeting for Wednesday evening at TheTwentieth Century Club in Oakland to provide details about the bankruptcy filing and the strategy for moving forward.
“The membership and board are fully committed to having the PAA be sustained for another century,” he said.