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State delays decisions on redevelopment grants

| Sunday, Jan. 13, 2013, 11:26 p.m.

A glut of grant requests and the governor's vow to base awards on merit rather than politics are delaying $125 million in redevelopment aid to municipalities statewide.

State Budget Office officials are scrutinizing $765 million worth of requests in 175 applications from groups in 39 counties.

They include $115 million in requests originating in Allegheny County that could play a part in building a 33-story Downtown office tower, preparing the Lower Hill District for development on the former Civic Arena site and helping to restore a historic Mt. Lebanon movie theater.

“It's like there's one job opening and 8,000 people applied,” budget office spokesman Jay Pagni said. “Our goal is to fund those projects that make the most sense and meet the requirements under the new guidelines.”

The state planned to announce awards for the Redevelopment Assistance Capital Program by November. Pagni could not estimate how much longer the wait will be. He said a combination of the “overwhelming response” and greater scrutiny means it is taking longer than anticipated.

Gov. Tom Corbett's administration is evaluating applications with a point system based on the number of jobs each project could produce, how soon work could begin and whether the project would improve a blighted or economically depressed area, among other factors.

Corbett, a Republican, set a $125 million cap to reduce the state's borrowing for the program, a move Democrats said could hurt the program's performance.

Projects that receive money from the program must provide a match, Pagni said.

“This is taxpayer money, and we want to ensure that the projects that have the most economic impact, are the most shovel ready and will create jobs ... get funded,” Pagni said. “The governor recognizes that these projects are very important for local municipalities.”

Missing out on the redevelopment funding typically doesn't scuttle a project, organizers said, but it could cause delays.

“People don't structure their development projects with a cliff at the end of it; they know it takes time to acquire funding,” said Paul Svoboda, special projects manager at the Urban Redevelopment Authority. “You give yourself options and breathing room.”

Svoboda said Corbett's promise to scrutinize projects' merits raises the stakes.

“I think he knows that he has to make sure all the T's are crossed and the I's are dotted before this goes out. I don't blame him one bit,” Svoboda said.

Penny Richichi, co-executive director of the Denis Theatre Foundation in Mt. Lebanon, said a grant would be a crucial part of foundation efforts to raise money to turn the Denis into a three-screen, independent movie theater. The Denis opened in 1938. The foundation requested $2 million from the state.

In Pittsburgh, the URA seeks $30 million in redevelopment assistance for eight projects. The largest, a $15 million application, is earmarked for the 350 Fifth Ave. redevelopment project that Oxford Development Co. announced in May. Oxford seeks an anchor tenant to occupy part of a proposed $238 million, 33-story office tower on Smithfield Street, where it owns a six-story building between Fifth and Forbes avenues that would be razed.

If Oxford doesn't find an anchor tenant, it could undertake a $40 million renovation of its building.

The city-county Sports & Exhibition Authority seeks $15 million to pay for initial utility lines and storm sewers beneath 28 acres on the former Civic Arena site. A second phase would build a street grid to prepare for the office, residential and retail development the Pittsburgh Penguins plan.

Mary Conturo, the SEA's executive director, said she knows simply that redevelopment funding is delayed.

“They haven't told us ‘yes' or ‘no.' They just haven't told us anything,” she said.

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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