Deal by Pens, city for arena site has its critics

URA, SEA boards to vote on Thursday

Pittsburgh Post-Gazette

It might not be all smooth ice for the tentative deal that gives the Penguins more time to redevelop the former Civic Arena site while freeing the city from potentially owing the team millions of dollars.

Jim Ferlo, a Pittsburgh Urban Redevelopment Authority board member, criticized the agreement Tuesday, saying it does nothing to get the Penguins moving on developing the land.

And Wayne Fontana, chairman of the Pittsburgh-Allegheny County Sports & Exhibition Authority board, is not prepared to support it just yet.

The comments suggest the Penguins and city leaders may have some selling to do before the tentative agreement, reached Monday, goes before the URA and SEA boards for a vote Thursday.

With the new deal, the Penguins will get one more year, until Oct. 22, 2025, to redevelop the 28-acre site. But with extensions and possible public sector delays on infrastructure and environmental issues, that could end up being 2028.

The agreement does require the team to develop 6.45 acres of land by 2020 or risk losing part of the revenue it receives from parking cars at the site.

Without a new agreement, the Penguins would have had to forfeit about 2.1 acres of land after exhausting the two years’ worth of extensions.

To get more time, the team agreed to exchange the $15 million in credits for the land it is to develop at the site, estimated to be 17 to 18 acres, excluding open space and a parcel needed for a new parking garage. The credits were won under the 2007 deal to build PPG Paints Arena.

The Penguins had the option of using those credits to buy parcels needed for development. But if credits remained at the end of the 10-year development period, the city would have been on the hook to pay the team.

That’s no longer the case, with Mayor Bill Peduto and Kevin Acklin, his chief of staff, touting that as a key victory for taxpayers.

Mr. Ferlo questioned whether the tentative agreement actually pushes the team to give its best. He said he might abstain or vote against the agreement. “It’s not a good deal primarily because I don’t think the Penguins have the capability or willingness to move forward,” he said.

The city and the SEA and URA, he said, may have been better off not negotiating a deal. “The best thing we could do is not even vote and start taking back parcels and put some pressure on the Penguins to go out and make a deal,” Mr. Ferlo said.

Were the URA in control of the property, it could issue requests for proposals for the development of individual parcels, Mr. Ferlo said, similar to the way it has done with the Pittsburgh Technology Center on Second Avenue, which has been built out over a period of decades.

Mr. Fontana said he had questions about the affordable housing component; whether there were any strings attached to the $15 million in credits the team was cashing in for land; and the requirement for a publicly funded parking garage of up to 1,000 spaces to support the development and arena, to be built when demand dictates it.

“The SEA doesn’t have the money to build a parking garage. If the SEA has to look for a subsidy to do it, how much time do they have? I’m looking for specifics,” he said.