City says it tried to buy Penn Plaza

Pittsburgh Mayor Bill Peduto’s administration tried several times to buy the former Penn Plaza apartment complex in East Liberty, angling to maintain affordable housing in the trendy neighborhood, a top aide said Tuesday.

Developer LG Realty Advisors turned down each of the city’s overtures since 2015 and declined “a serious conversation” about a purchase, said Kevin Acklin, chief of staff under Mr. Peduto. The Penn Avenue property has since become a flashpoint for housing activists while the developer pursues a contested redevelopment plan at the site.

“We thought perhaps there might be an avenue to acquire the property and rehab it for affordable housing. They said no,” Mr. Acklin said of an advance made this spring. “We said, ‘ Obviously, it’s private property.’ And that’s their right.”

More than 200 Penn Plaza residents relocated to accommodate the intended redevelopment, which would include 12,000 square feet of offices and 200 new apartments in an initial phase. Attorney Jonathan Kamin said the developer made “a strong commitment” of

roughly $10 million toward the city’s affordable housing trust fund, plus an offer of 20 percent affordable housing in the project’s second phase.

But none of that will materialize while the city stymies the project, said Mr. Kamin, who represents Pennley Park South, an affiliate of LG Realty. He confirmed that the group would not sell to the city. Activists lobbying to preserve Penn Plaza unveiled the sale prospect in a Tuesday news release, revealing the city’s attempts to buy.

Mr. Acklin said the city never floated a specific price.

“Instead of talking to President Trump, it looks like the mayor has been talking to Kim Jong Un and is looking to go ahead and take our private property — or nationalize our private property — for his own political purposes,” Mr. Kamin said, referencing the communist dictator in North Korea.

He said the developer believes it’s “done more than our fair share.” It appears city officials rejected the Penn Plaza redevelopment plan to devalue the property and “use it for political purposes,” Mr. Kamin said. He argued the city could foster affordable housing on nearby sites that it already owns.

Mr. Acklin dismissed “assertions about Kim Jong Un” as nonsensical, saying that “there was never any contemplation of any taking” of the Penn Plaza property. He said the city planning commission refused an amended preliminary land development plan in January because it didn’t meet agreed-to conditions.

“The mayor is committed to development that enhances the fabric of neighborhoods, not that frays or detracts from it,” Mr. Acklin said. “We’ve tried to be fair, open and transparent in how we deal with this development.”

Any purchase of the former Penn Plaza, much of which was demolished last year, likely would have involved the city law department, Urban Redevelopment Authority and Housing Authority, according to the administration. Remaining tenants vacated last month.

Meanwhile, the developer has turned to Allegheny County Common Pleas Court to fight the rejection of the amended development plan. A key tenant, Whole Foods Market, announced in March that it was withdrawing from the project, at least for now.

The Austin, Texas-based grocery chain cited concerns raised by the community and Mr. Peduto. In a court filing this month, Pennley Park said it suffered more than $10 million in damages associated with the potential loss of the grocer’s lease. It alleged the city filed an earlier complaint “with actual malice and with the intent to disparage” the developer and to block the project or extract more concessions.

That city complaint claimed Pennley Park engaged in demolition activity and failed to provide proper heat for tenants, all in violation of an earlier agreement. The developer denied those allegations.

Activists remain focused on preventing demolition at the last Penn Plaza building, said Helen Gerhardt, a member of the Homes for All advocacy group. Supporters are planning a noon rally and news conference Wednesday outside the LG Realty offices in the Oliver Building, Downtown.

“The affordable housing should be restored to the community,” Ms. Gerhardt said, “in one form or another.”

“The affordable housing should be restored to the community, in one form or another.” — Helen Gerhardt, member of the Homes for All advocacy group