2017 Was A Big Year (Comparatively) For The Lower Hill Site

Jan 1, 2018

Over the course of 2017, the long-discussed development of a 28-acre parcel in the Lower Hill District moved one step closer to realization.

After months of negotiation, the Penguins organization—which holds exclusive development rights to the land—the city, Urban Redevelopment Authority and the Pittsburgh-Allegheny County Sports and Exhibition Authority agreed to new development terms in December.

Just how long the site has been on its way to shovels in the ground is measured best in decades rather than years.

Up until the 1950s, the land was covered with homes and businesses, predominately owned by black Pittsburghers. But more than 80 blocks were razed to make way for a cultural district that never really materialized, with the exception of the Civic Arena.

The arena hosted concerts and rallies and became the first home of the Pittsburgh Penguins. When the team threatened to leave the city in 2007, the city, county, and state struck a deal to keep them, which included a new arena and development rights to the land surrounding the old arena. The deal gave public interest short shrift, said Kevin Acklin, Chief Development Officer and Mayor Bill Peduto’s chief of staff.

While the last few months have been busy, Acklin said renegotiating the deal has really been underway since Peduto first took office.

“We had a very thin options agreement in place that we inherited. It had a lot of ambiguity in it as to how the Penguins are going to be paying for public land, the timeline that they were going to be accountable toward,” he said. “Out of the box we started with a renegotiation of a robust option agreement.”

The Penguins finalized an amendment to that contract, the Comprehensive Option Agreement, Dec. 15. It sets a deadline of 2023 to develop 10.75 acres of land. Should the Penguins fail to do so, they would forfeit 40 percent of the revenue they earn from charging cars to park on the site. Negotiations heated up in October when the Penguins were obligated to purchase the first parcel of land under the original agreement but failed to meet their deadline.

The new development terms are intended to ensure the community benefits, that the public is paid full value for public land, and that the Penguins are held to a timeline, said Acklin.

“The penalty for not developing, according to the timeline under the prior agreement, was that they would lose a development opportunity. But that ... (meant) they could pick the parcels they would give up, they could delay it, there were a lot of exceptions,” he said. “It wasn’t really a meaningful accountability measure.”

Councilman Daniel Lavelle represents the Hill District and is a member of the URA’s Board of Directors. He didn’t vote for the amended plan because the accountability measures didn’t go far enough, he said.

“But I do think it's much better than the previous agreement that we had,” he said. “I do think there are checks and balances in place and I do think the Penguins will be held more accountable than they had previously. And I do believe at the end of the day they actually do intend to do development on the site.”

Lavelle said he is eager to see development of the Lower Hill begin because it will seed development in the Middle and Upper Hill; legislation passed in 2015 sends tax dollars generated by the project into a special reinvestment fund. Without the Lower Hill deal, none of that takes place.

While the project has reached a new milestone, Lavelle said it’s really just the beginning.

“We have 10 years of development in front of us,” he said. “I believe we have an opportunity to do the right thing and that we will do the right thing and that this development will help grow the community as opposed to destroy it and or gentrify it, which is a lot of residents’ fear.”

As negotiations progressed this fall, Acklin said the Penguins were nailing down different pieces of their development plan: McCormack Baron Salazar has been named to manage construction of housing, while plans for an entertainment district are in the works with an undisclosed partner. Acklin said the organization’s preliminary land development plan has moved through the City Planning Department.

The Penguins did not return a request for comment.