Judge OKs sale of August Wilson Center; hotel feasibility study to begin

| Tuesday, May 27, 2014, 12:35 p.m.

The highest bidder for the debt-riddled August Wilson Center for African American Culture has about two months to determine whether it can build a hotel atop the Downtown landmark and produce the money to buy it, an Allegheny County judge decided on Tuesday.

Even if 980 Liberty Partners delivers on both, the center's fate will remain cloudy, officials say.

Supporters of the center had mixed reactions when Common Pleas Judge Lawrence J. O'Toole approved its sale to the New York-based company.

O'Toole agreed to allow 980 Liberty Partners 60 days to do an engineering study to determine whether building the hotel is possible and 10 days more to show proof that it has the money to close on the sale.

“I guess I'm not surprised. We were all hoping that wouldn't be the case,” said Janera Solomon, a member of the August Wilson Center Recovery Committee and executive director of the Kelly Strayhorn Theater in East Liberty. “From a community point of view, it's important that we remain optimistic and continue to participate in the process. I don't want to see a hotel, but I would like to see a cultural center.”

The company said the study should take about a month.

“We're pleased with the judge's ruling. We have a lot of work to do,” said Matthew Shollar of Squirrel Hill, one of the 980 partners. “Everything in the deal hinges on the ability to construct a hotel.”

The center, named for the Pulitzer Prize-winning playwright from the Hill District, is $10 million in debt. Dollar Bank, which is owed at least $7 million, sought to foreclose on the center last year when it failed to pay its insurance and mortgage. An attorney for the bank did not return a call. The state attorney general's office intervened on behalf of taxpayers, who paid $17.4 million to build the $40 million facility, which opened in 2009.

Critics of 980's proposed 200-room hotel say it doesn't keep the cultural center's mission at the forefront. The company has proposed giving the center space in the building and access to meeting rooms.

The $9.5 million offer from 980 is higher than a $5 million offer put forth by three local foundations.

“We're committed to coming up with a resolution to resolve everyone's objections,” said the center's conservator, Judith K. Fitzgerald, who asked O'Toole last week to sign off on the agreement. O'Toole appointed the former bankruptcy judge as conservator to sell off the center's assets to pay its debts.

If the study finds that a hotel can't be built, Fitzgerald said a different buyer likely would have to be found.

Fitzgerald said the timeline is flexible on the engineering study. The 60 days could be extended or shortened. Because of that, Shollar said he couldn't speculate on a closing date.

O'Toole scheduled a status conference for June 9 and did not rule on pending objections from the city's Urban Redevelopment Authority, the attorney general's office and the bank. The URA objected to the 980 proposal in part because it says the company has not proved it can finance the deal. A URA spokeswoman declined to comment.

“We will continue to work with all parties, including the court, to find a resolution that best protects the public's investment in the center's mission,” said J.J. Abbott, a spokesman for the attorney general.

County Executive Rich Fitzgerald and Pittsburgh Mayor Bill Peduto are among those who have been critical of the hotel proposal. Fitzgerald downplayed the judge's approval, saying that finding out whether a hotel can be built is helpful.

“I don't know that it's a finality that the August Wilson Center goes away, no. It's my understanding it's a step along the way. There's still a lot of approvals that need to happen with respect to the city and zoning,” Rich Fitzgerald said. “The mission of the August Wilson Center needs to be adhered to. Whether it can be done with a hotel or a restaurant remains to be seen.”

Kevin Acklin, Peduto's chief of staff and URA board chairman, said in a statement that, “The August Wilson Center is a public asset, and what is most important is that the nonprofit mission be the primary focus.”

A consortium of nonprofits led by The Pittsburgh Foundation initially submitted a $4 million bid but withdrew it when 980 outbid it. Those nonprofits submitted a revised bid last week, upping their offer to $5 million.

Pittsburgh Foundation spokesman John Ellis said their offer remains on the table.

“We've said all along we want to preserve and safeguard the August Wilson Center as a community asset. We remain willing to explore opportunities to achieve that,” Ellis said.

The August Wilson Center includes galleries, classrooms, a cafe and a 500-seat theater.

Bobby Kerlik is a staff writer for Trib Total Media.

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