Penguins get more time for project in Hill District
The Pittsburgh Penguins narrowly won a bid to get more time to redevelop the former Civic Arena site Wednesday, but the battle may not be over.
In a 3-2 vote, the Pittsburgh Urban Redevelopment Authority board approved a deal to give the team another year, until Oct. 22, 2025, to complete the lower Hill District development — but not before attaching more conditions.
If the Penguins object, the deal is dead.
One condition would require the team to sacrifice up to 40 percent of the parking revenue it now
earns from the site — up from 30 percent — if it hasn’t developed 10.75 acres by 2023.
Another removes language in a “material adverse effects” clause that some believed could have allowed the team to sidestep new deadlines under the agreement if the community objected to some of its plans.
Board members strongly opposed that language, which related to the 2023 deadline, with state Rep. Ed Gainey calling it “undemocratic” and “unpatriotic” and saying it was an attempt to silence opposition.
The Penguins, who won the development rights to the 28-acre site in the 2007 deal to build PPG Paints Arena, and the URA now will have 30 days to formalize the new conditions.
If the team cannot do so, there will be no deal. The team then would have to forfeit 2.1 acres it has been unable to develop after exhausting the two years’ worth of extensions allowed under the existing agreement.
URA board chairman Kevin Acklin, chief of staff to Mayor Bill Peduto, said after the vote that the Penguins have agreed to the new conditions.
Travis Williams, the Penguins chief operating officer, concurred, saying the team already had agreed to the increase in the parking penalty to 40 percent before the vote.
Finding more palatable language to the “material adverse effects” clause should not be a problem. He said it was never the team’s intent to silence the public.
With the vote done, the Penguins are ready to move on the first phase of a 1,000unit residential development and a destination entertainment venue, he said.
“It’s time to turn the page and move past the discussion of the amendment to the option agreement and look forward to a development that will benefit the entire region,” he said.
The team plans to begin a design charrette on the housing, to be located near Crawford Square, Dec. 6.
“It’s time to get moving,” Mr. Williams said.
Mr. Acklin, Mr. Gainey, and board member Cheryl Hall-Russell voted in favor of the agreement. Board members Jim Ferlo and R. Daniel Lavelle, a city councilman who represents the Hill District, voted no.
Mr. Ferlo said he does not believe the Penguins are capable of developing the site and he thinks the team is content to collect millions in parking revenue each year.
He repeated his call for the city to investigate taking the development rights from the team through eminent domain. “To me, there’s just a lot of problems associated with this agreement,” he said. “I don’t think we’re ever going to see development.”
Mr. Lavelle said he did not believe the penalties for the Penguins missing a 2020 deadline for developing 6.45 acres (20 percent of parking revenue) or the 2023 deadline were strong enough.
The money that the team would be giving up, he argued, was only a fraction of the $10 million to $12 million a year he estimated it collected in parking revenue.
Marimba Milliones, president and CEO of the Hill Community Development Corporation, said the delays in developing the arena site also have hampered her group’s efforts to do work in other parts of the neighborhood. Developers, she said, want to know what’s going on at the arena site before committing.
“Our community is in a state of arrested development because the Penguins have not fulfilled their commitments,” she said.
While Mr. Acklin acknowledged that the agreement wasn’t perfect, he said it was “marginally better” than what the city ended up with in the 2007 deal.
The key, he said, is the Penguins have agreed to give up $15 million in development credits won as part of that deal. The team will exchange the credits for the 17 to 18 acres of land to be developed.
Those credits served as a disincentive to develop, he said, and required the city to pay the team in cash for any unused amounts at the end of the development period.
Now if the team doesn’t develop, it not only loses parking revenue but the $15 million in credits. And it could lose the land itself, which would revert back to the URA and the Pittsburgh-Allegheny County Sports & Exhibition Authority if it isn’t developed.
That, to Mr. Acklin, was a big change “in the dynamic of this.” Any parking revenue sacrificed by the team for missing deadlines would be put into a pot to fund improvements in the middle and upper Hill.
In another new wrinkle, the city has agreed to contribute into the same fund 10 percent of the revenue generated from a public parking garage to be built at the site at some point under the agreement.
“I believe [the new agreement] removes some obstacles to development. If [the Penguins] don’t deliver, we have accountability built in here,” Mr. Acklin said.
The SEA board already has approved the agreement and won’t have to vote on the changes proposed by the URA, he said.
Under the deal, the Penguins will be able to purchase two years worth of extensions that could take development to 2027 but they would have to pay $6,000 an acre for them. The agreement ends for good in 2028.