Pittsburgh Penguins pull out of Lower Hill development plans

The Penguins on Thursday announced they are stopping development in Pittsburgh’s Lower Hill District after the Urban Redevelopment Authority delayed a vote on a proposed First National Bank office tower.

URA board members were scheduled to vote on preliminary development plans and approval of Buccini/Pollin Group as master developer on a $200 million office tower. The 26-story building was proposed to house FNB’s corporate headquarters and anchor the Penguins’ $750 million plan for development of the 28-acre former Civic Arena property.

The Sports and Exhibition Authority, which owns the land, earlier in the day approved the proposals contingent upon URA approval. However, URA members postponed their vote for two weeks to review benefit agreements with Hill District community groups.

Penguins President and CEO David Morehouse responded by announcing the team was pulling out.

“In a week where the Penguins had to furlough a majority of our employees and we are all suffering the worst health and economic crisis in our nation’s history, we are disappointed that the URA delayed a $200 million development project that alone would create 1,500 construction jobs, 2,000 permanent jobs, deliver the highest commitments to minority- and women-owned businesses in the city’s history and generate $11 million in direct and immediate investment into the Middle and Upper Hill District,” he said in a statement.

“With constantly changing demands and delays, it makes delivery increasingly impossible. At this point, given the current economic conditions and the apparent lack of support from the URA, we are ceasing our development operations on the Lower Hill,” Morehouse said.

Dan Gilman, Mayor Bill Peduto’s chief of staff, pledged that the city would work to heal the rift between the Penguins and URA.

“The city remains fully committed to delivering this project, which we believe is a win for the neighborhood, the city and the Penguins,” he said. “Over the last year, working with the Buccini/Pollin Group and the Penguins under the leadership of Kevin Acklin and David Morehouse, we have delivered on a parcel take down with a term sheet that provided incredible investment to the greater Hill District community, a parking tax diversion at the URA and City Council and Housing Authority funding for an affordable housing development with deeper affordability than previously called for. We believe we can get this deal done as well, and we are going to work with the Penguins and the developers to do just that.”

The Penguins have owned development rights to the property for more than 10 years, but the project has been fraught with delays. Hill District groups and residents have repeatedly complained the team has reneged on a community benefits agreement that promised affordable housing and jobs and business opportunities for residents.

Thursday’s virtual meetings were no different as residents and groups sent in pleas for the two authorities to delay voting until the agreements are resolved.

Pittsburgh City Councilman R. Daniel Lavelle, who serves on the URA board, asked for the delay, saying members needed more time “to ensure that this is, indeed, in line with what the community’s expectations are.”

It was a theme that has recurred time and again.

Residents have bitterly complained over the years that they have been excluded from decision-making.

Development of the Lower Hill District has been a flash point for black Pittsburghers since the city demolished the neighborhood in the 1950s, displacing hundreds of families and businesses to clear the way for development of the Civic Arena.

Marimba Milliones, president & CEO of the Hill Community Development Corp., and others urged the SEA and URA to hold off on voting.

She said it was the moment “to make sure that the historic wrongs, the displacement of 8,000 businesses, churches demolished on that site are made right.”

The FNB Financial Center was planned for the corner of Washington Place and Bedford Avenue. It includes more than 387,000 square feet of office space, more than 20,000 square feet of ground-floor retail space and a two-story parking garage. It was expected to employ 2,000 people and generate 1,300 construction jobs.

The URA in October gave preliminary approval for the Penguins to begin a first phase of construction of its plans for a mixed retail and entertainment complex dubbed the Centre District.

Plans included a parking garage with 288 spaces, a live entertainment venue along Logan Street between Bedford and Wylie avenues and two residential buildings at the southeast corner of Wylie Avenue and Fullerton Street — one six stories and the other 12 stories — with 288 apartments and a 221-space underground parking garage.

PennDOT began construction last year on a $32 million cap across Interstate 579, designed to link the Lower Hill District and Downtown via a three-acre park.