Penguins' withdrawal from Lower Hill development surprises leaders

When the Pittsburgh Penguins said they were pulling out of a planned development in the city’s Lower Hill District, it caught some community leaders off guard.

The Thursday announcement by Penguins President and CEO David Morehouse came after the Urban Redevelopment Authority delayed a vote on a proposed First National Bank office tower, a 26-story centerpiece of the Penguins’ $750 million plan for development of the former Civic Arena property.

“I was shocked and surprised by the announcement that David Morehouse made,” said Pittsburgh City Councilman R. Daniel Lavelle, who serves on the URA board and whose council district includes the Hill. “It came out of left field for me.”

Lavelle asked for the delay because it was felt that members needed more time to ensure the Penguins’ proposal matched community expectations. Hill District groups and residents have consistently complained that the team has reneged on an agreement that promised benefits including affordable housing and jobs and business opportunities for residents.

“As we said at the URA, we’re simply holding the vote for two weeks so that we can better understand information and documents that had just been given to us.” Lavelle said. “We normally require documents to be in about five days before a meeting but we were still receiving documents that day.”

But Morehouse said delays were making completion of the project increasingly impossible.

“At this point, given the current economic conditions and the apparent lack of support from the URA, we are ceasing our development operations on the Lower Hill,” Morehouse said in the statement released Thursday. The Penguins declined to comment further on Friday.

Carl Redwood, co-director of the Hill Consensus Group, said as far as he is concerned, Hill District residents don’t need anything from the Penguins.

“This whole concept of giving billionaires public subsidies and then they turn around and don’t want to do any public benefit, they’ve done this many times in this process,” said Redwood, a longtime community activist. “My personal view is we should tell the Penguins good-bye and take the land. They’re collecting $14,000 a day parking cars on publicly owned land. Take the public land back and then the money will go to the public instead of the Penguins.”

Despite the residual bitterness and recent upheaval that began late Thursday, Lavelle said he thinks both sides are going to move forward on a deal.

“We’re in a good place. There are outstanding issues with community concerns that the community rightfully has, but I think those can also be worked out over time,” said Lavelle. “I think we should all be committed to delivering development on a tremendous site but a development that will also be beneficial and help rejuvenate and rebuild and reenergize the Lower Hill and the Upper Hill District as well. I think cooler heads will prevail.”

On Friday, Pittsburgh Mayor Bill Peduto said the city is fully committed to the development of the Lower Hill in partnership with the Penguins and master developer Buccini/Pollin Group.

“Over the past several months, we have successfully worked together on numerous positive votes without delay to take down parcels, advance affordable housing, and move forward with a new corporate HQ skyscraper” said Peduto. “This development will also bring over $10 million in funding to the greater Hill District Community. The city and URA are working closely to advance a vote in the coming days that will build off that partnership and take the next step forward in seeing this vision come to reality.”