URA to the Hill District: Don't worry about it!

Mark Belko on the URA vote today:

The city URA today approved a development agreement with the Penguins for about 9 acres of land known as the Melody Tent site near Mellon Arena, despite protests from a small group of Hill District residents.

The residents had urged the URA to delay the agreement until the team agreed to a community benefits program as part of its new development. The team and community leaders have had several meetings about the types of projects that should be part of the new development to benefit the neighborhood.

Authority members said there will be other opportunities for the city to hold the team to its promise of community benefits and the team wanted the development agreement signed before it would approve its 30-year lease for a new arena.

Just as expected. I started writing a post yesterday regarding this matter (see below). Who on city council sits on the URA board and will soon be up for re-election? Tonya Payne.
----------------------------------

We learn from Mark Belko a little more of the specifics in the public shafting agreement made between Penguins owners and Onorendellburklestahl, Inc. In a previous post, I listed some findings of the Allegheny Institute's analysis of the agreement and the $15 million in an SEA 'redevelopment' credit. Now, we learn about the vote on the URA-owned Melody Tent Site pictured here which was included as part of the agreement to give Penguins control of the development rights.

According to Belko's article, a few things are attention worthy.

Board members are expected to vote tomorrow on a 10-year option agreement with Pittsburgh Arena Real Estate Redevelopment, a Penguins affiliate, that would give the team control over the URA-owned Melody Tent site, now used as a parking lot.

The team gets control of the development rights but the property remains under ownership of the URA? Sounds good right? If I'm not mistaken, that means that the Penguins keeps all profits from events and use of the space but pay no property taxes since they won't own the property. What revenue does this bring the city? A portion of the sales tax from hot dogs and Penguins jerzees?

The team is required to develop 10 percent of the land each year, or face the risk of losing all or a portion of it. The Penguins must pay fair market value for the land, but will have access to $15 million in credits to offset the purchase price as a "further incentive to development," according to a URA report discussing the Melody Tent site.

Well, being forced to develop 10% of the land each year or face losing it is no incentive to consider and negotiate community input on redevelopment. Without a provision in this contract to ensure community input, the URA will effectively be negotiating a steamrolling of the public, in whose interest it claims to serve.

The Urban Redevelopment Authority of Pittsburgh is more than a redevelopment authority -- it is the City of Pittsburgh's economic development agency. As a developer of last resort, the URA develops properties which the private sector will not undertake. Our goals are to create jobs, increase the city's tax base, and improve the vitality of businesses, neighborhoods, and the City's culture as a whole.

Increase the city's tax base? Develop properties the private sector will not undertake? The Penguins are getting $15 million to put towards buying up prime real estate downtown! What authority will the URA retain regarding development of this property?

The development rights could provide the Penguins with another revenue stream once the new arena is up. The team also has the option of using some of the land for parking before it is developed.

What new revenue streams (for the city) will come from signing over development rights? Great for the Penguins but what benefit for the city? Remember, the Allegheny Institute remarked how the SEA retained ownership of the arena site; retaining the land, potentially good, but also forgoing the opportunity to collect property taxes from the arena. Furthermore, the Penguins get to keep all proceeds from sporting and non-sporting events (like Bon Jovi concerts) while infrastructural improvements (and maintainence, likely), such as plumbing and electric for the new arena, are paid for with public monies.

As part of the Isle of Capri Inc. bid for the Pittsburgh casino, the Penguins had teamed with Nationwide Realty Investors of Columbus, Ohio, to redevelop the 28-acre site with offices, housing, restaurants, retail and entertainment facilities, and to re-establish a street grid to reconnect the Hill with Downtown.
Nationwide dropped out of the picture after Mr. Barden won the casino license.
The Penguins have yet to select a new developer as part of the arena deal, but are expected to look at similar uses for the land.

It will be interesting (i.e. I will be surprised) if a redevelopment plan with a new realty company is concerned at all with reconnecting the Hill with Downtown.