Another short reprieve
Both sides drop the gloves in Penguins’ overtime bid on arena development
The Pittsburgh Penguins’ bid for more time to start redeveloping the former Civic Arena site is starting to resemble a tightly checked hockey game, with frustration mounting on both sides.
Team officials won another short reprieve Thursday in buying the first piece of land needed to start the long-awaited redevelopment but not without enduring some jawing from some of the public officials involved.
The Pittsburgh-Allegheny County Sports & Exhibition Authority and Pittsburgh Urban Redevelopment board members separately voted 4-1 to give the team until Nov. 9 to buy the first parcel on the 28-acre publicly owned lower Hill District site.
URA board member Jim Ferlo and SEA board member James Ellenbogen voted against the latest extension, saying they are fed up with the team’s inability to get construction going.
Mr. Ferlo suggested the URA should look into the possibility of taking away the Penguins’ development rights — won in the 2007 agreement to build PPG Paints Arena — by eminent domain.
He estimated taxpayers have put close to $50 million into the site to develop roads and other infrastructure, and have yet to see any fruit.
“It’s been at least six years now with, in my opinion, no evidence that the Penguins are actually sincere about moving forward with development,” he said.
“I hate to be so blunt but as far as I’m concerned the Penguins organization is disingenuous. I don’t think they’re negotiating in good faith. I consider them not only slick but needy and greedy when it comes to the manner in which they have conducted themselves with the taxpayers.”
The Penguins responded with a body check of their own, with CEO David Morehouse saying that Mr. Ferlo is the one who’s being disingenuous.
“As a member of the URA board, he is well aware of the commitment we have made to this project. The Penguins have invested millions of dollars in pre-development work; partnered with the URA and SEA to attract infrastructure funding; entered into agreements with nationally recognized developers McCormack Baron Salazar and Clayco for residential and office developments; and engaged the internationally acclaimed Bjarke Ingles Group to create an open space plan for the site,” he said.
“We also are in discussion with a retail/entertainment developer for a unique destination entertainment concept and have entered into an agreement with a minority-owned developer for a portion of the residential development.”
Mr. Morehouse also noted that the Pittsburgh Penguins Foundation invested more than $7 million last year in local charitable and community projects and that the Mario Lemieux Foundation has contributed more than $23 million to cancer research and patient care initiatives.
Beyond that, the team’s back-to-back Stanley Cup championships have helped to boost business to Downtown hotels, restaurants and shops.
“The Penguins have always fulfilled our commitments and intend to do so again with this important development project,” Mr. Morehouse said.
Mr. Ferlo was not the only board member to express frustration. Mr. Ellenbogen said the Penguins have had enough time to try to get development started.
“I think this has dragged on long enough. I think they need to get off the dime,” he said.
URA board member R. Daniel Lavelle, a city councilman who represents the Hill, voted to give the Penguins more time, but he vowed that he won’t do so again.
Mr. Lavelle said he voted for the extension Thursday because he is confident in the ability of the URA and Kevin Acklin, its board chairman and chief of staff to Mayor Bill Peduto, to negotiate a deal that would better serve the public.
The councilman had asked the city law department if there was any way to take back the development rights. While he never got a formal ruling, the upshot was “I don’t see how we get out of a legally binding agreement,” he said.
Without the extension, the Penguins would have had to forfeit a 2.1-acre parcel of their choosing on the 28-acre site to the SEA or URA, both of which own portions of the real estate.
The team has exhausted the two years’ worth of extensions it can take before buying the first parcel it needs for development. Given that, the SEA and URA are using the deadline as an opportunity to try to negotiate a broader deal.
One item on the table is $15 million in development credits the team can use to buy extensions or purchase parcels needed for development.
So far the team has used about $725,000 in credits — $500,000 to buy the land needed for the hotel built next to the new arena and the rest on extensions, meaning no money came out of its own pocket. Each of the extensions costs $75,000.
In arguing for the latest reprieve, Mr. Acklin and SEA executive director Mary Conturo said they believed they could get a new deal with the team that would be better for taxpayers if they had a little more time.
“What I can say is that there are a number of issues that we are negotiating in good faith that I think would produce the kind of development we want to see here,” Mr. Acklin said.
If there is to be a new agreement, it must be reached by Nov. 2 so the two boards as well as the public will have time to digest it before a vote.
The Penguins themselves had hoped to have development started by this time. The team had reached a deal with U.S. Steel to build a new headquarters there only to see it crumble because of the Pittsburgh steelmaker’s financial woes.
Team officials have been working with McCormack Baron to start the first phase of a 1,000-unit residential development by early next year.
But Mr. Lavelle said Thursday he does not anticipate that starting until sometime next spring or summer.
Both the SEA and URA boards earlier had voted to extend the deadline for the Penguins to start development from Oct. 22-27. The new extension replaces that.