The developer of a proposed 26-story office tower at the former Civic Arena site pitched the project Monday as a catalytic one that will benefit the entire Hill District.
But members of the Hill Community Development Corp. aren’t so sure, saying the project has received failing grades so far in meeting the goals of a neighborhood master plan and a benefits agreement related to the 28-acre site.
Monday’s development activities meeting in the Hill, conducted via Zoom, was required before the Pittsburgh Penguins and their developer, the Buccini/Pollin Group, could take the proposed $230 million office building to the city planning commission for approval.
The 471,890-square-foot tower would become the headquarters for First National Bank, which is taking 160,000 square feet spread over nine floors, with options to expand.
During Monday’s meeting, Chris Buccini, co-president of the Buccini/Pollin Group, said the firm is moving aggressively to get construction started this summer and have it finished in 2024.
The bank, he said, has six or seven leases it cannot extend.
“So there is pressure to start construction to get them in in time. Otherwise, it puts the project in jeopardy,” he said.
While Buccini/Pollin has been trying to get other tenants to fill the structure, FNB is the only one it has signed so far. The bank also will be one of the project lenders.
Lease rates for the office space will be in the upper $30 range, far higher than the going rates for existing Class A office space in Downtown Pittsburgh.
Bomani Howze, Buccini/Pollin vice president of development for the Greater Pittsburgh area, described the project as one that can provide “a very positive uplift” for the Hill as a whole.
“This is not a perfect plan, but it is a plan we believe will be powerful,” he said.
Mr. Buccini said his firm, the Penguins, who hold the development rights to the lower Hill site, and FNB have made nearly $34 million in commitments to the Hill as part of the office project alone.
That includes $7.5 million to be diverted to other parts of the neighborhood from the tax revenue generated by the office tower. FNB has agreed to advance that funding at the closing on the building so it can be used expeditiously for other projects.
It also has pledged to front an estimated $3 million in parking tax revenues that are to be redirected into a greater Hill housing stabilization fund, according to a proposed term sheet.
The tax revenue would come from an 850-space parking garage to be constructed in the next phase of development and some spaces at the office building.
But despite the pledges, Marimba Milliones, president and CEO of the Hill CDC, said the FNB project had fallen short in many respects.
She said, for example, that while the Penguins and their partners committed $1 million to improvements at the Ammon Recreation Center in the Hill, they had provided only $100,000 so far.
Nor have they provided funding for the Curtain Call art project that was supposed to be part of the PPG Paints Arena development when it opened in 2010. There’s now talk of moving it elsewhere, Ms. Milliones said. The proposed term sheet commits $1 million toward the work.
Overall, despite the push to get the FNB tower started, the Hill CDC’s development review panel gave the project “E” and “F” grades in terms of compliance with the neighborhood master plan and a community benefits agreement related to the arena site negotiated in 2014.
“Our process is really not to blow up the plan. We want to see development, too. But it’s got to be right. If it’s not right, it needs to come back,” Ms. Milliones said.
Buccini/Pollin representatives insisted that is their goal as well.
In addition to the financial pledges, they said they are committed to 30% minority business and 15% women’s business participation in the overall arena redevelopment.
They added they had achieved 28.2% minority and 13.4% women’s business participation in pre-development commitments.
“We do truly believe that for this project in the lower Hill to succeed, all of the Hill District needs to succeed,” Mr. Buccini said.
The Hill CDC also has complained about a recent census tract change supported by the Penguins and their partners that lumps the former arena site in with the middle Hill. The arena site used to be part of the Downtown census tract.
With the change, the publicly owned site could qualify for opportunity zone status and low income housing tax credits. The Hill CDC fears that could also siphon such benefits away from other parts of the neighborhood.
The Penguins, however, have argued the change would have the opposite effect and broaden investment.
Mark Belko: 412-263-1262 or mbelko@post-gazette.com.
First Published: March 16, 2021, 2:29 a.m.
