US Steel to Build New Headquarters on Former Civic Arena Site

Nov 24, 2014

A piece of the roof on the old Civic Arena in downtown Pittsburgh comes down in 2012. United States Steel Corp. announced Monday it will build its new world headquarters in Pittsburgh as part of the NHL's Penguins' redevelopment of the former Civic Arena site.
Credit AP Photo/Gene J. Puskar

United States Steel Corp. CEO Mario Longhi said he took Monday’s sunshine as a good omen for his company’s new headquarters on the site of the old Civic Arena.

Longhi joined Penguins CEO David Morehouse, Pennsylvania Gov. Tom Corbett, Allegheny County Executive Rich Fitzgerald and Pittsburgh Mayor Bill Peduto to make the announcement at Consol Energy Center on Monday.

Longhi said the five-story, 268,000 square foot building will serve as the cornerstone of revitalization of both US Steel and the surrounding Hill District community.

“This will spur innovation and enhance efficiencies while fostering increased collaboration far beyond the walls of our new headquarters,” Longhi said.

He said that the company’s lease at US Steel Tower ends in 2017, and that several other metropolitan areas were trying to woo the company to move its headquarters.

Penguins CEO David Morehouse said he first heard that US Steel was considering moving their operations out of Pittsburgh in 2012.

“I remember meeting (Mario Longhi) for the first time and saying, ‘We hear there are other opportunities for you, but I just want you to know that US Steel, for Pittsburgh, is more than just a company. It’s the foundation from which this city was built,’” Morehouse said. “I looked in his eyes, and I could see that he understood that, and I knew we were going to get to this point.”

258,000 square feet of the building will be occupied by US Steel, while the remainder will house retail outlets. Longhi said they are also planning a steel museum for the building. Morehouse said the building will be owned by consortium made up of a development company affiliated with the Pittsburgh Penguins and the development firm Clayco, and that US Steel will enter into an initial 18-year lease agreement.

“I’ve got to tell you, as a Pittsburgh boy, this feels really good,” Peduto said. “I told Mario (Longhi) … ‘I will not be the mayor that lost US Steel.’ All apologies to the governor, but (that) didn’t mean Allegheny County or Pennsylvania. US Steel belongs in Pittsburgh, and it feels really, really good to say that that’s going to be the future.”

Both the federal New Markets Tax Credit program (NMTC) and Local Economic Revitalization Tax Assistance Act (LERTA) will be tapped to offset project costs. The NMTC program offers a 39 percent tax credit over seven years for development in low-income communities. Under LERTA, a portion of future tax revenue generated by the building will be put back into the financing of the structure, and into further revitalization of surrounding neighborhoods.

“A portion of that tax increment under the LERTA will be directly deposited into the Greater Hill Fund, north of $3 million we anticipate, which can be utilized for all the great projects we’re looking to do in the Middle and Upper Hill,” said Kevin Acklin, chief of staff to Mayor Bill Peduto.

Ensuring that residents of the Hill District share in the wealth that is sure to follow the 28-acre mixed-use development has been a major concern of City Councilman Daniel Lavelle, who represents the area. He said at least 25 percent of residential units on the site will be designated as affordable housing.

“This also gives us an opportunity to begin looking at other programs, particularly to keep seniors in their homes as property taxes rise, because that is absolutely going to occur,” Lavelle said. “(That is) a good thing, but we have to also protect those who are already living there.”

Morehouse said they expect ground to be broken on the facility in August or September 2015, with a completion date of September 2017. He would not reveal a total price tag for the project.