The Pittsburgh Urban Redevelopment Authority gave preliminary approval Friday for the Penguins to begin a first phase of construction estimated at $210 million at the former Civic Arena property in the city’s Hill District.
The approval marks the first step in what all sides say will be a long process to convert the Lower Hill District into a mixed residential and retail complex.
The Pittsburgh Penguins own development rights to the 28-acre site.
“It’s the first time that the Penguins development team has actually advanced development on the site,” said Kevin Acklin, the hockey team’s general counsel. “This is going to be hard. This is going to be a multi-year process. This is the first time that you’ve ever seen this level of development in the Lower Hill District.”
The Penguins are proposing to build a parking garage with 288 spaces and a live entertainment venue along Logan Street between Bedford and Wylie avenues.
Construction of the building hinges on Pittsburgh City Council approval to defer 75 % of parking taxes — totaling an estimated $24.3 million over 19 years — to help pay for construction.
The building would include space for relocation of a Pittsburgh EMS rescue unit now on the Boulevard of the Allies at no cost to the city and a small business incubator for locally-owned minority businesses. The Penguins would lease the incubator space to the redevelopment authority for $1 annually, with a purchase option after 29 years.
Plans include two residential buildings at the southeast corner of Wylie Avenue and Fullerton Street — one six stories and the other 12 stories — with 288 apartments and an 221-space underground parking garage.
The buildings would house 61 two-bedroom, 132 one-bedroom, 77 studio and 19 “micro apartments.” It would include amenities such as fitness centers, community rooms, sundecks and rooftop patios, according to the redevelopment authority.
Fifty-eight of the apartments would be affordable for low-income residents.
The development also calls for a restructured tax abatement plan subject to approval by the city, Pittsburgh Public School District and Allegheny County. The tax abatement is expected to generate $80 million in tax revenue over 10 years based on increased value of the property.
Under the agreement, $40 million would go toward a fund for improvements in the Hill District and $40 million for infrastructure improvements around the development.
The Penguins have agreed to borrow $40 million if final approval is granted and immediately make a lump sum into the fund, according to Acklin.
The preliminary development plans must be approved by the Pittsburgh-Allegheny County Sports and Exhibition Authority, which owns most of the property. SEA directors are expected to review the development in November.
Hill District residents have criticized the process, saying the redevelopment authority has not given them time to review plans in detail and once again requested a delay in the vote. They submitted a letter outlining amenities they would like to see included in the Penguins’ plans.
URA members agreed to form a committee to review the letter and issue a report within 30 days.
“I’m glad we’re here,” said Pittsburgh City Councilman R. Daniel Lavelle, a Hill District resident and URA board member. “This is a first time we’ve actually taken a real step to move this Lower Hill development forward.”