Developer says it will build Strip District project without tax package
A Strip District-based developer Tuesday withdrew its request for taxpayer assistance on an ambitious plan to transform acres of parking lots along the Allegheny River into a mix of townhomes and shops called Riverfront Landing.
The Buncher Co.'s decision ends nearly seven months of uncertainty over whether Pittsburgh City Council would grant a controversial $50 million tax-financing package that city planners said would hasten construction of needed road and utility lines but some politicians decried as a blind giveaway.
“We didn't vote on a $50 million project that, it turns out, Buncher didn't want and didn't need. That's a positive,” said Councilman Patrick Dowd, who refused to introduce legislation to create the tax-increment financing district in the Strip. “That's revenue we're not going to give over now.”
But it also means city officials, primarily the Urban Redevelopment Authority, will have less influence on how Buncher proceeds with construction plans on the 63 acres it owns along the river between 11th and 21st streets, which the company said is one of the largest development-worthy tracts of its kind next to a major city's Downtown.
“We're relying on Buncher to make the investment now rather than being able to define and design and fund it in one tidy package with all of these public amenities,” said Paul Svoboda, the URA's special projects manager. “We were in the driver's seat ... and now we're in the passenger's seat. It's not ideal.”
Tom Balestrieri, president of Buncher Co., said in a statement that the company wanted to eliminate “any perceived public risk in the project” by self-financing potentially millions of dollars in street, storm water, utility line and other infrastructure improvements needed to support Buncher's initial development phase, which is bounded by 11th and 14th streets, Smallman Street and the riverbank in the Strip.
Tax-increment financing, known as TIFs, allow governments or companies to borrow money to jump-start development projects.
Ideally, the money borrowed is repaid over a 20-year term using part of the additional tax revenue — known as the increment — the new development generates. Buncher officials said they would have been willing to front the money to eliminate risk to taxpayers.
“While we applaud this arrangement as unique and creative, the negative perception of TIF programs by the community has proven too great to overcome,” Balestrieri said. “The Buncher Company has earned a highly respected reputation over the last 60 years and does not wish to participate in a financing program the community views negatively.”
Balestrieri told the Tribune-Review on Friday that he believed Dowd's opposition to the project was politically motivated. Dowd, a Highland Park Democrat, once ran against Mayor Luke Ravenstahl, a fellow Democrat, and was highly critical of Ravenstahl's efforts to team with Buncher to redevelopment the Allegheny riverfront. Dowd said his opposition isn't political, he just dislikes the plan to reshape the district.
Buncher's larger plan includes public amenities such as recreational access to the river via a large piazza at the end of 17th Street, which would extend to Smallman if Buncher is able to acquire the more than 80-year-old Produce Terminal and demolish the western end of it. Buncher has an exclusive option to buy the Produce Terminal from the URA for $1.8 million.
Before that occurs, Buncher wants the URA to resolve a lawsuit the Allegheny Valley Railroad filed against it regarding the URA allowing the building to be used for retail shops rather than produce wholesalers. A trial is set for Jan. 24.
Some neighbors, merchants and politicians worry that the redevelopment plan — specifically the potential overhaul of the Produce Terminal — would ruin the historic charm of the Strip. Buncher wants to modernize the 1,478-foot-long Produce Terminal, which has no heating or cooling systems, to attract retailers in place of produce wholesalers, some of whom have already relocated out the Strip District.
Critics raised concerns about plans that show Buncher could create private, gated drives in parts of its development. Officials said Tuesday, however, that they plan to dedicate the new streets to the city for public use.
Jeremy Boren is a staff writer for Trib Total Media. He can be reached at 412-320-7935 or email@example.com.