The Pittsburgh Penguins’ development team for the former Civic Arena site has “pulled themselves out” of a neighborhood review process and is chasing state dollars in a way that could “cannibalize” funds needed by other potential projects, Hill District leaders said at a virtual community meeting held late last week.
That account is at odds with the perspective of Mayor Bill Peduto’s top aide. Dan Gilman, the mayor’s chief of staff, said he sees no sign that the Penguins are “backtracking on any commitments whatsoever.”
The concerns voiced at the Hill Community Development Corporation [Hill CDC] quarterly meeting on Thursday evening, though, could spell trouble for the proposed redevelopment of the arena site. That 28-acre development was on thin ice in early May. Later that month, though, the Urban Redevelopment Authority board gave its preliminary approval — with conditions — to the Penguins’ choice of developer and plans to build a 26-story tower to be anchored by a new headquarters for First National Bank [FNB] of Pennsylvania.
Now, ahead of as-yet-unscheduled URA board votes on the tower design and other aspects of the development, Hill CDC leaders are raising some of the same objections that nearly upended the project five months ago.
According to emails obtained by PublicSource from the City of Pittsburgh through a Right-to-Know request, the development team and the URA failed in the spring to reach any clear agreement on the team’s obligations to win the approval of a neighborhood scoring committee called the Development Review Panel [DRP]. The Hill CDC’s leaders are now accusing the development team of flunking the DRP and then withdrawing from it, and are threatening to make their concerns heard before authority boards, to elected officials and maybe in the courts.
“Should a developer decide that they are going to disengage or ignore the process completely, any citizen obviously has a legal right to object to any plan through the regulatory process,” Marimba Milliones, president and CEO of the Hill CDC, told around 50 attendees at the virtual meeting. “Obviously, the public always has a range of options, the most powerful being legal, through the regulatory process.”
Milliones could not be reached Friday for more information on those legal options. The Hill CDC is, however, a signatory, along with the city, Allegheny County and the Penguins-created Pittsburgh Arena Real Estate Redevelopment L.P. [known as PAR] to a six-year-old plan to collaborate on the neighborhood’s rebirth. And the CDC carries some weight with a URA board that includes the Hill’s city council representative R. Daniel Lavelle, and is led by a prominent labor movement progressive, Sam Williamson.
The Penguins’ chosen developer, Boris Kaplan of the Maryland-based Buccini/Pollin Group [BPG], wasn’t available for an interview Friday but wrote in an email to PublicSource that his team “remains committed to launching projects that will spark much-needed job growth, opportunity and reinvestment in the adjacent communities and across the region.” He added that “a robust planning and community review process are very much ongoing.”
Is a key panel ‘fair’ or ‘irregular’?
The Penguins’ proposed redevelopment of the Lower Hill depends on the transfer of publicly owned land to PAR, city approvals of construction plans and public subsidies that the URA last year put at $80.65 million — and that may top $100 million if involved parties get state funds for which they have applied.
The Hill CDC is a prominent voice in the process for a number or reasons. It’s a signatory to the 2014 Community Collaboration Implementation Plan [CCIP], also signed by PAR, the city and the county. It’s also the Hill District’s Registered Community Organization, giving it added weight in city permitting and planning matters. And its leaders frequently note the historic importance of Hill District participation in the benefits of redevelopment of the former arena site because it was carved from the neighborhood, causing much displacement, in the 1950s.
There has been disagreement all year, though, on the degree of the Hill CDC’s influence. Much of that debate has focused on the Development Review Panel process, run by the CDC, in which 11 residents from six community organizations vet proposals, compare them to the neighborhood’s master plan and other neighborhood goals, and give them scores of up to 100. A score of 80 or more earns the DRP’s recommendation. Anything less, and the DRP asks for improvements.
“In the Hill District, C’s do not get degrees,” said Felicity Williams, the Hill CDC’s programs and policy manager, at the quarterly meeting. “You have to have a B in order to pass in the Hill District because we want to see high-quality development and we want to see sufficient alignment with the community’s vision on each development project.”
A failing grade from the DRP doesn’t bind city decision makers, but the panel “gives you, residents, a powerful voice in the redevelopment of your community,” she added.
From March through May, as the development team, the URA and the mayor’s office worked toward approval of plans for the FNB site, known as Block G1, public officials engaged in a flurry of emails with Kaplan and Penguins Chief Operating Officer and General Counsel Kevin Acklin. The highlights:
- March 20: A URA Neighborhood Development Department manager emailed Acklin and Kaplan, telling them that the URA board had made a “commitment to vet any Lower Hill actions with the Hill CDC and the full community prior to approval. We at staff level believe that this means that Block G1 should complete the DRP process prior to URA board approval."
- April 6: URA Deputy Executive Director Diamonte Walker wrote that the URA wanted the Penguins development team to finish “at least the first phase of DRP with early indicators of positive feedback.”
- April 27: Kaplan wrote to Gilman that the development team “still willingly participated in the additional DRP process voluntarily,” but added that his side had “never accepted the premise that we're bound to the timing or outcome of the DRP.” He called the DRP process “irregular and delayed” with “proposed additional meetings and reviews.”
- April 30: URA staff asked Kaplan and Acklin to give them, among other things, an “update about continued conversations in regards to DRP scoring and feedback," within days.
On May 14, the URA board voted to delay its consideration of the plan and proposed developer for the $230 million FNB tower, in part because board members had just received requested documents. That prompted the Penguins to call a halt to all of their Lower Hill development efforts. A week later, the URA board voted to approve the Penguins’ plans, with several conditions, including that the development team make its “best efforts” to reach agreement with the neighborhood’s leaders.
Lavelle said in a Friday interview that he has told the development team from the beginning to “go before the recognized community review process, which is the DRP. … I think it’s been a fair process. I think if anyone’s moving slow, it would be BPG. They started the process, and they have since gone months without going back to the review process.”
At the Hill CDC’s quarterly meeting, held via Zoom, Milliones and Williams said the DRP was measuring the Penguins’ plans against both the neighborhood’s master plan, and against the CCIP’s priorities. Those priorities are the involvement of minority and women’s business enterprises, jobs and “wealth building” for Hill residents, home ownership, cultural preservation, coordination with the community and tracking of the development’s effects.
Plans to build a concert venue on part of the site won a passing grade, but the FNB tower and a residential phase fell short, the CDC leaders said.
Williams said that, “as of now, the developer has disengaged from the community process.”
URA board Chair Williamson wrote, in response to PublicSource’s request for an interview, that the Penguins’ development team needs “to provide a statement of community input in order to advance the project. If this statement is not coming from the DRP, I am curious to hear about how they intend to meet this requirement. Meaningful collaboration with neighborhood stakeholders is an integral part of the development process.”
Kaplan wrote in an email to PublicSource that the development team “never left the process” and intends to continue with it.
Cannibalizing public subsidies?
The development team’s bids for more public funds have also upset some in the Hill.
“From the very beginning of this development process, it’s always been concerning how much public money has had to go into this deal to make it happen, that there’s not more private dollars in the deal,” Lavelle told PublicSource.
In addition to the $80.65 million in public subsidies already slated for the arena site, PAR, FNB and the URA this year put in applications for a total of $22 million in state Redevelopment Assistance Capital Program [RACP] grants. The applications — $15 million sought by FNB, $4 million by PAR and $3 million by the URA — are among nearly 600 submitted, statewide, asking for nearly $2 billion total.
The applications are to be judged by the state Department of Community and Economic Development based on the potential of the competing projects to support employment, tax revenues and economic activity. State officials have not yet decided how much money they’ll distribute to the RACP applicants.
“Any organization has the right to apply” for RACP funds, said Gilman, so FNB and PAR did not need city approval for their applications. “That doesn’t mean it will or will not be funded or will or will not be supported by any elected official or community group.”
The URA, he said, applied for $3 million to help finance a parking garage on the arena site because that money could free up other funds needed “to invest in critical infrastructure.”
Milliones called the $22 million in requests “a violation” of the arrangements the Hill CDC has with the development team and the public sector, saying “they are supposed to [submit applications] in partnership” with neighborhood organizations.
She noted that the RACP grants are “extremely competitive,” and that four other entities are seeking grants for other neighborhood projects: the Hill Dance Academy Theatre, the City’s Edge housing and commercial proposal, planned apartments at Fifth Avenue and Dinwiddie Street, and improvements to the Energy Innovation Center.
“So our concern is that the Lower Hill District requests will essentially cannibalize the requests that are being made from the Middle Hill District,” Milliones said.
Ahead, or behind, on rec center?
In late August, the Penguins and FNB announced their commitment of $100,000 to build a “Rec2Tech computer lab and maker space” in the city’s Ammon Recreation Center in the Hill District. The pledge came some 10 months after the team said it would fund a rehabilitation of Ammon as part of its investment in the neighborhood. That rehab was valued, in a URA staff presentation to that agency’s board in October, at $1 million.
The $100,000 is “desperately needed,” Milliones said at the Hill CDC’s quarterly meeting. But, she added, there was a commitment to $1 million, so $900,000 is still due.
Lavelle said the $1 million was an estimate of Ammon’s needs, and not a firm dollar commitment by the development team. And Gilman added that the money is not due until property ownership changes hands, which hasn’t happened yet. Plans for Ammon must also be coordinated with the neighboring Macedonia Church of Pittsburgh, which wants to expand in the direction of the rec center, Gilman said.
Lavelle said he’s “very happy that [the Penguins] have started with the Rec2Tech.”
Milliones, though, said community opportunities to exert leverage could be slipping away. If the development team gets “too far down the road,” she said, it will be harder to get them “to fulfill all of the components of the community benefits agreement.”
So far? “When you look at the community benefits that are received,” she said, “we are lagging behind.”
Update (9/28/2020): This story was updated to include comment from URA board Chair Sam Williamson.
Rich Lord is PublicSource’s economic development reporter. He can be reached at firstname.lastname@example.org or on Twitter @richelord.
Develop PGH has been made possible with funding from The Heinz Endowments.