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Bank seeks OK to foreclose on August Wilson Center if deal not done soon

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Thursday, May 29, 2014, 2:57 p.m.
 

Dollar Bank has asked an Allegheny County court to allow it to foreclose on the August Wilson Center for African American Culture if a deal to sell the building to a New York developer is not reached by June 30.

“This is consistent with the position that we've taken over the last several months — that we offered the center time and money and an opportunity to restructure,” said Eric Schaffer, an attorney for Dollar Bank. “If that isn't going to work, there are limited alternatives.”

The motion filed Thursday in Common Pleas Court comes two days after Judge Lawrence J. O'Toole approved the proposed $9.5 million sale of the debt-ridden center to 980 Liberty Partners, a New York-based company that wants to build a hotel atop the Downtown building.

O'Toole gave 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.

Matthew Shollar, a 980 partner, said the bank's request won't interfere with the engineering study. He hopes it will be completed within a month.

“As long as the feasibility of the project remains intact, our interest remains intact,” said Shollar of Squirrel Hill.

Pittsburgh's Urban Redevelopment Authority and the state attorney general have objected to the sale, and argue that deed covenants limit the structure to use as a nonprofit black cultural center.

Dollar Bank argues that's not the case. The bank's motion states that the building's owner has the ability to build out 500,000 square feet of air rights atop the two-story structure.

“The covenant does need to be honored,” said Allegheny County Executive Rich Fitzgerald, who along with Pittsburgh Mayor Bill Peduto has questioned whether the 200-room hotel will keep the cultural center's mission at the forefront.

Financial problems plagued the $40 million center, named for the Pulitzer Prize-winning playwright from the Hill District, from its opening in 2009. The center did not raise enough money to cover its construction costs and cost overruns.

The court appointed Judith Fitzgerald, a retired bankruptcy judge, as conservator in a last-ditch effort to save the center and later as a receiver to sell off its assets to pay its debts.

She said the motion won't halt her commitment to achieving a “global resolution” that preserves the center.

The August Wilson Center is $10 million in debt. It owes Dollar Bank at least $7 million, and the center hasn't made a payment since February 2013. Meanwhile, Dollar Bank has been under court order to cover the center's insurance premiums, utilities, security and other costs until June 30.

“With the URA hamstringing any alternative to a foreclosure sale, there is no reason for the court to extend the stay and no reason for Dollar Bank to underwrite expenses of the commonwealth's receivership,” the bank's motion says.

A $5 million offer was put forth by three local foundations. 980 Liberty Partners would allow the center to use the gallery, offices and storage space.

The attorney general's office and URA declined to comment. O'Toole could not be reached.

Natasha Lindstrom is a Trib Total media staff writer.

 

 

 
 


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