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Amid criticism, $400M Strip District redevelopment plan still a go

| Saturday, Jan. 5, 2013, 11:55 p.m.
Tribune-Review
Shoppers walk about the Pittsburgh Public Market in the Terminal Building along Smallman Street in the Strip District on Saturday, December 5, 2012. Buncher Co. wants to tear down part of the building that houses the market to make way for a new development. Stephanie Strasburg | Tribune-Review
Tribune-Review
People come and go from the Pittsburgh Public Market in the Terminal Building along Smallman Street in the Strip District on Saturday, December 5, 2012. Buncher Co. wants to tear down part of the building that houses the market to make way for a new development.
Tribune-Review
Kathe and Paul Kmec of Mount Lebanon enter the Pittsburgh Public Market in the Terminal Building along Smallman Street in the Strip District on Saturday, December 5, 2012. Buncher Co. wants to tear down part of the building that houses the market to make way for a new development. Stephanie Strasburg | Tribune-Review
Tribune-Review
People come and go from the Pittsburgh Public Market in the Terminal Building along Smallman Street in the Strip District on Saturday, December 5, 2012. Buncher Co. wants to tear down part of the building that houses the market to make way for a new development. Stephanie Strasburg | Tribune-Review

One of Pittsburgh's most prominent real estate developers is prepared to reshape a considerable chunk of the city's premier tourist and shopping destination in the Strip District — with or without the city's blessing through a special tax financing package.

Buncher Co. executives told the Tribune-Review that complaints that mounted for months about its plan to spend $400 million building housing, office and retail space on 55 acres it owns between 11th and 21st streets are hollow, politically motivated attacks mired in Mayor Luke Ravenstahl's re-election bid.

“There are people who are just plain opposed to whatever this administration is doing,” said Tom Balestrieri, Buncher's president and CEO. “It's not so much directed at Buncher, but we happen to be a byproduct, and I don't like it.

“I did not enjoy one minute of what we've been through the last six months, for a company that has built a reputation over the last 60 years in Western Pennsylvania and six counties. We have a lot of good projects to point to.”

Balestrieri said Buncher owns more than 1 million square feet of property in the Strip District occupied by private and public office tenants employing more than 5,000 people.

Critics on city council and some merchants and neighbors contend that Buncher's plan to demolish part of the landmark Produce Terminal could ruin the appeal of a signature neighborhood. They worry that public green space between the river and proposed buildings would be too small.

“You tell me, why would I do anything in the Strip District that's going to hurt any of our existing investments?” Balestrieri said.

Buncher owns the fourth-largest amount of taxable property in Pittsburgh, valued at $192 million.

“My objective is to make them No. 3, but the project that they're proposing won't accomplish that. Their project isn't good enough,” said Councilman Patrick Dowd, a Highland Park Democrat who represents part of the Strip and has been the chief opponent to Buncher's proposal. He is a frequent critic of Ravenstahl.

Dowd refuses to introduce legislation that would let the city authorize a 20-year, $50 million tax-increment financing package to equip portions of the acreage along the Allegheny River with utilities, streets, sidewalks and other infrastructure needed to support office buildings, shops and homes.

Balestrieri said no public money would be at risk if council approved the package known as a TIF.

That's because Buncher would front money needed to make utility and street improvements, instead of allowing the Urban Redevelopment Authority to borrow it with taxpayer dollars, he said. Money generated by higher assessed values for the land, known as the increment, would pay off the money Buncher loaned rather than pay off bonds.

That eliminates the risk that taxpayers could inherit a bill if the project falls apart, Balestrieri said.

Paul Svoboda, URA special projects manager, said the Ravenstahl administration worked with Buncher to ensure the development would become a destination for Strip District visitors.

“They're going to be very consistent with what we saw on the mayor's Allegheny riverfront vision plan,” Svoboda said.

That plan, released in February 2011, lays out development guidelines for 6 12 miles of urban riverfront from the Strip District to Highland Park.

Dowd, who once ran for mayor against Ravenstahl, said his opposition is not political.

He said it's rooted in Buncher's plan to turn the more than 80-year-old Pittsburgh Produce Terminal on Smallman Street — long a gritty wholesalers market — into a retail shopping center that could be found in any suburban strip mall.

Buncher plans to demolish the western third of the building to make way for an extension of 17th Street that would link to a piazza the size of Market Square along the Allegheny River. The URA is relocating produce wholesalers as leases expire. The Pittsburgh Public Market would move to the eastern end.

Balestrieri acknowledged that he supports Ravenstahl's administration and the mayor's riverfront master plan. He said Ravenstahl is the first mayor to strongly endorse Buncher's plan for the riverfront.

Previous mayors, including Tom Murphy, whom Dowd invited last month to City Council to speak against the plan, were unwilling to help.

Ravenstahl's re-election campaign is banking on successful redevelopment efforts, including Buncher's.

In a statement about his hope for 2013, Ravenstahl said: “Pittsburgh's Third Renaissance will reach more neighborhoods, creating more jobs in places like the Hill District, Homewood, Brookline and along the Allegheny Riverfront.”

Buncher executives have helped Ravenstahl.

Balestrieri and others made $3,800 in campaign donations to Ravenstahl in 2008 and 2009, records show.

Balestrieri donated smaller amounts, typically $100 to $250, to Allegheny County Executive Rich Fitzgerald and council members who include Dowd and Bill Peduto, who is running against Ravenstahl in the May primary.

The Jack Buncher Foundation gave $1.3 million in 2011 to the Pittsburgh Foundation, which supports Riverlife, an advocacy group that raised concerns about the development.

Council President Darlene Harris said Ravenstahl did not try to sway her opinion about the Buncher project. She said the $150 Balestrieri put toward her 2011 City Council campaign did not lead to her decisive vote in a 5-4 compromise last month to create a special zoning district for the development. The zoning permits a 70-foot setback from the river, instead of a 95-foot setback that Riverlife sought.

“I don't like to owe people. I'm more of a ‘try to get it done' type of person,” Harris said.

Riverlife worries the space will be too small to support a park and walking trail along the river's eroding edge, but its spokesman Stephan Bontrager said the nonprofit organization will work with Buncher “to maximize this opportunity and to create a riverfront project that exceeds the minimum requirements.”

As long as Buncher acquires the Produce Terminal for $1.8 million from the URA, it will proceed with its project, Balestrieri said.

He said a lawsuit against the URA by the Allegheny Valley Railroad could cause delays.

The railroad company sued the authority in September to stop the redevelopment. It contends the URA violated requirements in its 1981 purchase agreement to offer rental space to produce wholesalers and use “best efforts” to continue its rail-oriented use.

A non-jury trial to settle the dispute is set for Jan. 24 before Common Pleas Judge Robert Colville.

Jeremy Boren is a staff writer for Trib Total Media. He can be reached at 412-320-7935 or jboren@tribweb.com.

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