Redevelopment authority to vote on tax assist for former LTV Steel site
A vision to transform a blighted 178-acre site that was home to the LTV Steel Co. coke works in Hazelwood could get a boost from Pittsburgh's Urban Redevelopment Authority, Mayor Luke Ravenstahl said Tuesday.
Ravenstahl said the authority's board of directors will vote to start work on a nearly $100 million tax-increment financing package, or TIF, that would pay to build roads and install utility lines. It would finance creation of public park space aimed to entice residential and commercial developers to turn the vacant riverfront into a hub of activity linking Downtown and Oakland.
“The development of this site will continue our efforts to connect our neighborhoods to Pittsburgh's most beautiful natural assets, our riverfronts,” Ravenstahl said.
Almono LP is seeking to finance up to 10 percent of the project's cost, which could approach $1 billion. Almono is a partnership between the Regional Industrial Development Corp. and the Benedum, Heinz, McCune and Richard King Mellon foundations. Its name comes from merging the names of Pittsburgh's three rivers: Allegheny, Monongahela and Ohio.
If granted, it would be the largest TIF in the city's history, said Joanna Doven, Ravenstahl's spokeswoman.
City Council, Allegheny County Council and Pittsburgh Public Schools would have to approve the financing once the URA develops the proposal, studies economic impact and designates a specific redevelopment site.
Each would have to agree to relinquish 65 percent of the property taxes generated through the increased value of the site for 20 years.
Under the plan, the increased property tax revenue would pay off bonds sold to cover the initial costs of building roads and installing utility lines on blighted land.
TIFs helped set up developments, including the SouthSide Works entertainment and shopping district and the Pittsburgh Technology Center, Doven said.
TIFs aren't always successful. A $9.3 million TIF used in 1995 to pay for a 600-space parking garage in the former Lazarus department store at Fifth and Wood streets failed to persuade the retailer to stay and help fulfill former Mayor Tom Murphy's hope of resurrecting Downtown as a retail destination. Lazarus closed in 2004, citing lack of sales. It opened in 1998.
Ravenstahl's announcement was made the same day executives with Buncher Co., a major Strip District-based developer, announced it withdrew a request for a $50 million TIF to redevelop a portion of 63 acres it owns along the Allegheny River in the Strip. Buncher said the public's negative perception of TIF programs was “too great to overcome.”
Buncher's decision ended nearly seven months of uncertainty over whether City Council would grant the controversial financing package that URA officials said would hasten construction of the necessary 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 establish the tax-increment financing district in the Strip.
But it means city officials will have less influence on how Buncher proceeds with construction plans on the land it owns along the river between 11th and 21st streets.
The situation could be different for the Almono project.
“This is really a tremendous opportunity for the region to take this parcel, which once was the economic hub of Hazelwood and the surrounding area, and restore it to that role,” said Don Smith Jr., president of RIDC.
Smith said the tax financing is a necessity.
“It's really very costly, and the cost of these improvements can't be borne by the market price that the land brings, so that's why you turn to vehicles like TIFs that will recapture revenues,” Smith said.
He said at least six housing developers expressed interest in building on the site. He said demand for flexible-use industrial building space is strong because options are scarce in the city. He said work to prepare the so-called “brownfield” site could begin later this year and construction on buildings could begin sometime in 2014.
Almono estimates the project could require 3,000 jobs and increase property tax revenues to $11 million a year, up from about $100,000 a year now.
The site is along the Monongahela River. The LTV Steel Co. plant was demolished in 1999. Almono bought the site in 2002 for $10 million.
Almono's vision is split into four districts that would contain office buildings catering to high-tech and biotechnology firms, environmental and alternative energy facilities, an Eco Tech Park for “clean industrial and research centers” and a 27-acre residential section dubbed Hazelwood Flats.
Jeremy Boren is a staff writer for Trib Total Media. He can be reached at 412-320-7935 or email@example.com.