LTV Steel redevelopment project may be funded without tax money
As much as $90 million to install roads, sewers and utility lines on Pittsburgh's last major abandoned industrial site could be in the form of loans from foundations repaid over 20 years with property tax revenue, officials said Thursday.
Organizers of the plan offered more details of how they would finance some of the nearly $1 billion redevelopment of the former LTV Steel Co. coke works in Hazelwood in a way that would avoid sticking taxpayers if the development would fail or not generate as much new tax revenue as planned.
Don Smith Jr., president of the Regional Industrial Development Corp., which owns the land, said he hopes to borrow money needed for the infrastructure from members of an RIDC-managed partnership known as Almono LP, began a decade ago with the hope of shepherding the redevelopment of the urban brownfield.
Loaning the $90 million up front, incrementally, would allow RIDC to avoid the costs of the bond market, Smith said.
Smith made the comments in an interview minutes after the Urban Redevelopment Authority gave the first of what its board of directors said would be many approvals needed to turn the 178-acre site along the Monongahela River in Hazelwood into a residential, high-tech research and high-end office development beside Oakland and close to Downtown.
The URA authorized spending up to $75,000 to hire consultants to study the legal, economic and site condition aspects.
The foundations would be repaid over 20 years through a tax-increment financing package that must win approval from Pittsburgh City Council, Allegheny County Council and the Pittsburgh Public Schools board.
Sixty-five percent of new tax revenue generated would go to pay off the foundations' loan; the remainder would go to the taxing bodies.
In the event of a default, Almono would be responsible for the loan.
If approved, it would be the city's largest TIF monetarily and in land size, Smith said.
RIDC's financial partners in the deal are the Heinz Endowments, Benedum Foundation and Strategic Regional Development. The groups have contributed $20 million in the past decade to acquire the site for nearly $10 million, generate a master plan and begin some site preparation as early as spring, Smith said. Most of the work won't occur until and if the tax-increment financing is approved.
Public contributions include $5 million in loans and grants from the Commonwealth Financing Authority and a $500,000 grant from Allegheny County through an economic development fund that casino gambling tax revenue supports, he said.
Much of the site is environmentally safe for housing development, Smith said, despite its history as a coke plant. Coke is a fuel in blast furnaces used in steel production.
In recent years, construction crews deposited than 800,000 cubic yards of earth on the site from major construction projects such as the North Shore tunnel connector and Rivers Casino garage. That raised the site's elevation above the 100-year flood plain and buried much of the environmentally blighted land.
Jeremy Boren is a staff writer for Trib Total Media. He can be reached at 412-320-7935 or email@example.com.