Mayor Luke Ravenstahl said Tuesday that the city paid off the $5.25 million tax-increment financing plan for the Schenley Center project in Oakland five years earlier than scheduled.
TIFs use the promise of future increases in property taxes to pay for sewers, roads and utilities at sites where development is occurring.
Schenley Center includes a 176-room Residence Inn extended-stay hotel, the 156-room Schenley Gardens Assisted Living Center and a 273-space parking garage. The $42.2 million project was built in 1998.
In December 1997, the city approved the TIF to partially fund the parking garage and site preparation.
Before the TIF, the Schenley Center parcels generated $1,531 annually in taxes to the city, Allegheny County and Pittsburgh Public Schools, the mayor's office said. During the TIF, the taxing bodies collected $204,336 annually. Now that the TIF debt has been paid, the taxing bodies will collect $612,232 annually in taxes.
TIFs have come under fire because money backed by public subsidies can be lost if the developer pulls out. They also can fail to generate enough tax revenue to cover loans, as in the case of two TIF deals that built The Mall at Robinson.
The financing tool's most high-profile failure in Pittsburgh came when the city used it to entice Lazarus to open a department store Downtown in 1998. Lazarus closed in 2004 because of poor sales.
TribLive commenting policy
You are solely responsible for your comments and by using TribLive.com you agree to our Terms of Service.
We moderate comments. Our goal is to provide substantive commentary for a general readership. By screening submissions, we provide a space where readers can share intelligent and informed commentary that enhances the quality of our news and information.
While most comments will be posted if they are on-topic and not abusive, moderating decisions are subjective. We will make them as carefully and consistently as we can. Because of the volume of reader comments, we cannot review individual moderation decisions with readers.
We value thoughtful comments representing a range of views that make their point quickly and politely. We make an effort to protect discussions from repeated comments either by the same reader or different readers.
We follow the same standards for taste as the daily newspaper. A few things we won't tolerate: personal attacks, obscenity, vulgarity, profanity (including expletives and letters followed by dashes), commercial promotion, impersonations, incoherence, proselytizing and SHOUTING. Don't include URLs to Web sites.
We do not edit comments. They are either approved or deleted. We reserve the right to edit a comment that is quoted or excerpted in an article. In this case, we may fix spelling and punctuation.
We welcome strong opinions and criticism of our work, but we don't want comments to become bogged down with discussions of our policies and we will moderate accordingly.
We appreciate it when readers and people quoted in articles or blog posts point out errors of fact or emphasis and will investigate all assertions. But these suggestions should be sent via e-mail. To avoid distracting other readers, we won't publish comments that suggest a correction. Instead, corrections will be made in a blog post or in an article.