A three-hour-plus community meeting involving the Penguins’ development team and the Hill District’s leading development group, held Monday, did not yield a breakthrough.
A day after the first public discussion of a new term sheet offered by the Penguins’ chosen developer, Hill Community Development Corp. President and CEO Marimba Milliones questioned whether the offer amounts to much more than “business as usual.”
On the other side, developer Buccini/Pollin Group [BPG] co-principal Chris Buccini, whose firm is leading the billion-dollar rebuild of the former Civic Arena site in the Lower Hill, called Milliones’ public characterizations of its plans “incredibly disingenuous.”
Both sides agreed that they’d keep talking in advance of City Planning Commission consideration of BPG’s plans for a 26-story First National Bank [FNB] tower near the Hill’s border with Downtown. A commission vote could come next month. While the Hill CDC’s sign-off on the $230 million tower isn’t required, the commission typically weighs community group input heavily in its decisions
Milliones pledged to meet with the developer soon “to nail down what’s real and what’s theoretical” in the term sheet.
Buccini said he’s “of course open to conversation with the Hill CDC.”
But the term sheet – at least in the short term – only emphasized the divide.
“The development team has delayed deep engagement with the appropriate parties in the Hill District for many months,” said Milliones, “and now that they are in the final hours, they are scrambling to put together a term sheet that looks like it’s above and beyond the usual, when it is really business as usual.”
Here are key points the two sides addressed in separate interviews with PublicSource.
Term: $17 million in recent, ongoing and future loans, grants and tax credit investments by FNB to Hill institutions
Banks are required to invest in underserved communities under the Community Reinvestment Act [CRA], noted Milliones and Hill CDC Programs and Policy Manager Felicity Williams. Investments in the Hill, much of which was bulldozed in the 1950s to make way for the arena, should go “above and beyond normal business practices,” said Williams.
“To say that FNB bank would be doing all of these investments in the Hill as a matter of course for CRA is just not truthful,” said Buccini. “Yes, banks make CRA investments, but they can make them anywhere.”
Terms: $7.5 million in neighborhood aid financed using a tax abatement, and $3 million in housing investments financed via a parking tax diversion
Williams said that tax-diversion-backed funding shouldn’t be misconstrued as “giving those millions of dollars” to the neighborhood. “There is so much public money going into this project,” she said, and more of it will flow to the arena site than to the surrounding neighborhood. The Urban Redevelopment Authority last year put the total public subsidy at nearly $81 million.
Normally, the developer gets all of the benefit from tax breaks, countered Amachie Ackah, founder of Clay Cove Capital, one of the investors in the development. In this case, a significant portion is flowing instead to the surrounding community, he said. And because FNB is lending the $7.5 million up front, to be paid back using the tax break, the money will flow promptly, he said.
“Banks are in business to give loans,” noted Milliones. “Why is that being counted as reinvestment?
Term: $500,000 in spending on kiosks for small minority- and women-owned business enterprises [M/WBEs], to be located in the open space near the FNB tower
Milliones said that “from the very beginning” the Hill CDC has pushed for M/WBE space within the tower, at affordable rents. Relegation of neighborhood entrepreneurs to kiosks and maybe retail space on the tower’s ground floor isn’t enough, she said. “Not only is that not equity. That’s not even inclusion.”
“There’s only so much that this one project can support,” said Buccini, calling the tower “the anchor which lets us build everything else.” The tower has to be financially viable, he said, so the entire site can create “a lot of jobs on what has been a surface parking lot, for people in the community to walk to work.”
Where does this leave matters?
In a separate interview, state Rep. Jake Wheatley, D-Hill District, said the discussions reflect the “normal back-and-forths in any negotiation” between entities with strong beliefs.
He said that the Hill CDC is fulfilling its role by pressing for commitments from the developers and government. But he added that the CDC also has to be ready “to be true partners at the table to get things done and finished” when neighborhood buy-in is achieved.
Buccini said that his firm and FNB are ready to move forward, at a time when there aren’t many other big construction projects slated for the city, despite the pandemic-driven changes in the office market.
“We have to break ground this summer” to meet FNB’s needs, he said. “There is a very small window of opportunity.”
Milliones, though, said that the developer has failed to pass muster with the Hill’s Development Review Panel, which weighs proposals against the neighborhood’s master plan and, in the case of the arena site, against a seven-year-old Community Collaboration Implementation Plan [CCIP].
“Our expectation is that they will not proceed [toward city approvals] unless or until they can receive successful scores from the community,” Milliones said. “And we’re willing to help with that!”
Asked whether his side has room to negotiate, Ackah said the development team is “not playing a game here. … For us, it’s not a game of poker. We genuinely want to invest in the community.”
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.