Pittsburgh council OKs tax incentive for Esplanade development

Pittsburgh City Council on Tuesday unanimously approved a critical tax diversion for Esplanade, a sprawling $740 million development planned along the Ohio River.

The developer, Cecil-based Piatt Companies, will now turn its attention to seeking similar approvals from Allegheny County and Pittsburgh Public Schools.

If the measure is approved by all three taxing bodies, it will help fund public infrastructure and affordable housing for the project.

Lucas Piatt, the developer’s CEO, told TribLive that Esplanade cannot move forward without the incentive.

The development, which would repurpose a 15-acre brownfield in Pittsburgh’s Chateau neighborhood on the North Side, aspires to be a first-day attraction for the city.

Plans call for restaurants, retailers, green space, a marina, an incubator for local entrepreneurs, entertainment areas, a grocery store, a hotel, condos, a mixed-income apartment tower and a nearly 200-foot Ferris wheel that will offer views of the river and cityscape.

The parcels set to be developed now generate nearly $84,000 in property taxes annually. A portion of the site owned by the Urban Redevelopment Authority has been off the tax rolls since 2003.

Officials estimate the site will likely produce about $8 million in tax revenue each year once the massive project is complete.

Under the incentive, which would form a Transit Revitalization Investment District, 75% of the taxes generated by the property’s added value after development will be plowed back into Esplanade and the surrounding community instead of going to the taxing bodies.

The tax district would last for 40 years, but individual parcels are eligible for only a 20-year tax diversion.

Under the incentive, money that would otherwise be paid in taxes would instead be used to offset various development costs.

Council President R. Daniel Lavelle, D-Hill District, broke out some of the anticipated expenses that would be covered by tax diversions: $13 million for public infrastructure; $1 million for riverbank restoration; and $25 million to offset the cost of new affordable housing both within the development and throughout neighboring Manchester.

“This is, in my estimate, a great investment, a great use of tax dollars,” Lavelle said ahead of a preliminary vote on the measure last week.

He noted that the diverted taxes would benefit not just the Esplanade site, but the broader North Side community.

The Urban Redevelopment Authority will oversee the tax district.

It was not immediately clear when resolutions for the tax district would be introduced before County Council or the Pittsburgh Public Schools board.

Abigail Gardner, a spokesperson for the county executive, said the county would likely vote last.