Buncher Company Drops $50M Public Subsidy Request for Strip District Project
The Buncher Company has dropped its request for a large public subsidy to help it build a new development in Pittsburgh's Strip District. Buncher gave up on the $50 million financing deal after months of holdup in Pittsburgh City Council.
Councilman Patrick Dowd said he held up the legislation for 28 consecutive weeks because he wanted more details on how Buncher would spend the $50 million dollars in “Tax Increment Financing” (TIF) funding.
Dowd said after just a few weeks, though, it became clear that he wouldn’t get answers from the Buncher Company or the Urban Redevelopment Authority, which proposed the TIF subsidy package to Council.
"And so in some ways, by holding the legislation, I think we sort of called the bluff or demonstrated that it wasn't necessary, which is a fundamental requirement for an approval of a TIF," said Dowd.
A TIF package allows a property developer to start a project using a large bond issued through the local government. Since the property's real estate value would increase after the redevelopment, a portion of that higher property tax revenue is then dedicated to paying off the bond over the next several years. The TIF package can only be passed if the project would not move forward but for the special financing.
Dowd said he thinks Buncher will begin the project on land that was not included in the TIF legislation, in hopes that a second TIF proposal could be introduced later.
But first, both the Buncher Company and the city itself will have to contend with two lawsuits. One suit challenges the project’s sewage plan. The other raises a right-of-way issue over a railroad that runs right through the Strip District property.
The parcel in question spans from the Veterans Bridge to 21st Street between Smallman Street and the Allegheny River.