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Allegheny

Pittsburgh's legal battle with Penn Plaza developer takes an ugly turn

Bob Bauder
| Friday, March 17, 2017, 1:33 p.m.
Large bands of concrete that emphasize the floors of the Penn Plaza apartments in East Liberty on Tuesday, Jan. 12, 2016.
Guy Wathen | Tribune-Review
Large bands of concrete that emphasize the floors of the Penn Plaza apartments in East Liberty on Tuesday, Jan. 12, 2016.
Tree stumps remain in the area surrounding Penn Plaza in East Liberty, shown, Wednesday, Feb. 22, 2017. Cutting the trees down without the city's permission cost developer, Pennley Park South Inc. $42,000 in fines.
Andrew Russell | Tribune-Review
Tree stumps remain in the area surrounding Penn Plaza in East Liberty, shown, Wednesday, Feb. 22, 2017. Cutting the trees down without the city's permission cost developer, Pennley Park South Inc. $42,000 in fines.

A temporary truce in the battle over redeveloping a low-rent East Liberty apartment complex ended Friday in a Downtown courtroom.

An attorney representing the private developer that owns the Penn Plaza apartments accused Mayor Bill Peduto's administration of attempting to kill the $150 million project, which includes tearing down the complex and replacing it with a Whole Foods grocery store.

Pittsburgh Solicitor Lourdes Sanchez Ridge denied the allegation, saying the city wants Pennley Park South, the business name of the owner, to obey the law.

“The city's not attempting to kill,” she said. “We just want to make sure that it is done according to law and according to our zoning codes. That's all were trying to do, and protect those (Penn Plaza residents).”

Attorneys from both sides, who had attempted to negotiate an out-of-court settlement, agreed that talks have reached an impasse. They plan to take their arguments before Allegheny County Court of Common Pleas Judge Joseph James. James gave attorneys 30 days to file briefs.

“They're throwing up every roadblock possible,” said attorney Jonathan Kamin, who represents Pennley Park South. “Based on the city's response, it seems clear to us that they're interested in just killing this project.”

Pennley Park, a subsidiary of Downtown-based LG Realty Advisors founded by Lawrence Gumberg, plans to replace Penn Plaza with a mixed development that includes the Whole Foods, a parking garage, offices and about 400 apartments.

Kamin said the company offered to rent 20 percent of the residential units in one of two buildings slated for the new development at discounted rates. Pennley Park initially had intended to offer only market-rate housing.

The city turned down the offer made as a concession during negotiations, Kamin said.

Sanchez Ridge declined to comment on details of the talks.

Neighbors and affordable housing activists have opposed the project, saying it displaces poor residents who have limited options to relocate, diminishes a public parklet neighboring the property and further gentrifies East Liberty, the site of much high-end development in recent years. Rents in the neighborhood reach as high as $3,000 per month.

Penn Plaza rented to market-rate and low-income residents.

The Pittsburgh Planning Commission last month rejected Pennley Park's plans. The company is suing to overturn the unanimous decision.

The city sought an injunction to stop the company from performing work inside the remaining Penn Plaza building; its counterpart already has been torn down. Sanchez Ridge said she has talked with residents who told her they've been sickened by dust and fumes from the work site.

Pennley Park agreed to stop all work in the building during negotiations, but Kamin said the “gentleman's agreement” has ended. He denied allegations that the company was demolishing vacant apartments, saying the work consisted of such things as removing cabinets and toilets.

“We're not going to sit by and let the city have a de facto injunction on us,” he said. “We're tired of that. We're going to continue to do whatever it is that is within our rights to do.”

James agreed to hold a hearing on the injunction if necessary but urged the sides to agree on what can be done inside the building.

“I'll meet with (Kamin) and see what we can come up with,” Sanchez Ridge said. “If there are only a few residents in an area, perhaps they can do something in another area.”

Before Pennley Park began demolition, it provided 200 residents with relocation assistance amounting to “hundreds of thousands of dollars,” according to Kamin. He said 18 residents remain, and all but two have agreed to find alternative housing.

Remaining residents have until March 31 to move, according to an agreement between the city and Pennley Park.

Bob Bauder is a Tribune-Review staff writer. Reach him at 412-765-2312 or bbauder@tribweb.com.

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