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Black leaders back developer's offer, say it could save August Wilson Center

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Comparing the bids

A look at plans for the August Wilson Center for African American Culture under competing bids:

980 Liberty Partners

Who: Three partners, including Matthew Shollar of Squirrel Hill, who formed the New-York based development entity specifically to develop a 10-story hotel atop the August Wilson Center.

Bid: $9.5M

Vision for center: The August Wilson Center would get gallery, office and storage space rent-free; prominent signage at a separate entrance into the gallery; and a minimum of 120 days of free use of the 500-seat theater in exchange for $1 or $2 per ticket sold. Those terms and any others of interest are up for negotiation, including specific space allocations and options for generating revenue through ways such as hosting events. The court would approve the process for deciding who would run the August Wilson Center, an independent nonprofit entity that would no longer own the property.

The foundations

Who: A coalition of three of the region's largest foundations, led by the Pittsburgh Foundation.

Bid: $7.2M

Vision for center: The Pittsburgh Foundation would place the August Wilson Center in a newly formed nonprofit, and the center would occupy the entire Downtown building. Future plans could include allowing a developer to build out a tower, but the center would own the property. The Pittsburgh Foundation would have the ability to appoint and remove members on the center's new Board of Directors, and the Pittsburgh Cultural Trust would manage operations for the first three years.

— Natasha Lindstrom

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Tuesday, July 22, 2014, 10:42 p.m.

As pressure intensifies to thwart foreclosure on the August Wilson Center for African American Culture, some black leaders are urging public officials to consider striking a compromise with a hotel developer to share the Downtown building and its air rights.

“We should not overreact to the possibility of having less space if less space provides for the August Wilson Center to stay on the planet for decades to come,” said Tim Stevens, chief executive officer of the Black Political Empowerment Project and former president of the NAACP's Pittsburgh branch. “Anybody who's African-American, city and regional leaders, and the general public would be remiss if we didn't look at that hotel offer seriously.”

Stevens is among early supporters of the August Wilson Center who, until recently, sided with civic leaders opposed to selling the debt-ridden property for $9.5 million to developer 980 Liberty Partners. The developer wants to build a 10-story hotel atop the two stories while providing space for the independent nonprofit center.

“It seems like a novel and financially sound approach,” said Allegheny County Councilman Bill Robinson, who tried unsuccessfully to put more county money into the center last year.

Top public officials — including Pittsburgh Mayor Bill Peduto, Allegheny County Executive Rich Fitzgerald and state Attorney General Kathleen Kane — joined three local foundations in taking a hard line against selling the building to a private developer. They champion a $7.2 million bid from the Pittsburgh Foundation, an offer enhanced this month with $2.2 million from city- and county-related coffers.

The Urban Redevelopment Authority will argue in a Sept. 29 trial that the developer's plans for a 200-room hotel would usurp a “public asset” protected by covenants that restrict the property to a black cultural facility.

The court appointed Judith K. 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.

Fitzgerald, her lawyers and her consultants have racked up $691,000 in legal fees for work completed between November and June. The receiver and her associates will be the first paid out of a claim on the sale of the property, which was built with at least $17.4 million in taxpayer money.

“This is not about us arguing against any particular development; it's more about the URA defining the basis for which we make investments on behalf of the public,” said Kevin Acklin, URA chairman and Peduto's chief of staff. “On top of that, we have yet to see any real evidence that this hotel development is actually for real.”

Allegheny County Common Pleas Judge Lawrence O'Toole called on all parties involved to come up with a “global resolution” — a consensual deal that could be reached outside of court.

“If both Mr. Peduto and Mr. Fitzgerald turn the rhetoric down and spend a little bit more time behind closed doors, we can come up with a solution,” Robinson said.

Matthew Shollar, a 980 partner, says the developer would provide the center gallery and office space rent-free, plus use of the performing arts center for at least 120 days in exchange for a $1 or $2 fee per ticket sold. That's about 40 more days than the center had been using the performance space, Shollar said, and it's up for negotiation, along with everything else the developer has promised thus far in a “placeholder” agreement.

“We want to see as much operational cash go to the center as possible to try and create a workable model for the center to be as autonomous as possible,” Shollar said.

Critics are leery of promises from a private developer. They question how much of the center would exist after the sale and whether escape clauses and various details folded into a legal agreement would go far enough to protect the center.

“The whole deal smells like lip service,” said Downtown real estate attorney E.J. Strassburger, who applied unsuccessfully to be the receiver. “It's burying an iconic theater and center that is the hope of the African-American and arts community in a commercial hotel development.”

Politicians weighing in on the case have a two-folded challenge: preserving the first local black cultural center of its kind while coming off as fiscally responsible, said Jerry Shuster, professor of political communication at the University of Pittsburgh. URA board member and state Sen. Jim Ferlo, D-Highland Park, has voted against putting more public money into the fight over the center, calling it a “bottomless pit.”

Neither Peduto nor Rich Fitzgerald can afford to appear as though they're isolating black constituents from having a say in the center's future, Shuster said.

“It's not like a warehouse, some place in the Strip District that the most you're going to have is some environmentalists taking a shot at you,” Shuster said. “You're talking about a substantial segment of the community that doesn't want to be misrepresented or not represented at all.”

After considering the case for months, Stevens said the developer's offer is appealing for two reasons: It pays off nearly all the center's $10 million in debts, and it lowers the cost to operate the center.

“I am pleased that someone that wants to open a hotel would still be very interested in paying the operating expenses and maintaining the facility that means so much to the community,” said Esther Bush, president of the Urban League of Greater Pittsburgh and a member of the 1999 steering committee created to form the August Wilson Center. “At the same time, of course, the center as a stand-alone — that is what we were so hungry for and worked so hard to make happen.”

Billy Jackson, an independent filmmaker who knew Pulitzer Prize-winning playwright August Wilson personally, said he worries the hotel deal “confuses and complicates things,” and would not provide as much community value as the center controlling the full building. Jackson favors the foundation-driven deal — even if it means he won't be repaid the $5,000 he loaned to the center because the offer isn't high enough to settle debts with smaller creditors.

“I would rather see the dream fulfilled,” Jackson said.

The foundations and city's URA are preparing a more detailed plan under their bid on how the center would operate to submit to Judge O'Toole.

Natasha Lindstrom is a staff writer for Trib Total Media.

She can be reached at 412-380-8514 or

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