The Penguins’ long struggle to get redevelopment going at the former Civic Arena site in some ways resembled the team’s arduous Stanley Cup runs.
Over the past decade, there were highs and lows, shifts in momentum, setbacks, occasional skirmishes and even a lineup change.
It was all set to culminate Wednesday in what may be the development equivalent of a banner-raising ceremony: the groundbreaking for the 26-story headquarters for First National Bank.
The $240 million FNB Financial Center represents the first construction to take place on the 28-acre lower Hill District site since the Penguins secured the development rights to it 14 years ago in the deal to build PPG Paints Arena.
It has been a frustrating slog for the team, political stakeholders and Hill residents, who are hoping to benefit from a development through jobs, contracts and a community agreement designed to pour tens of millions of dollars into the neighborhood.
State Rep. Jake Wheatley, who has been a key player in the redevelopment of the site and in negotiations surrounding community benefits, is excited to see work finally starting.
While getting to this point has been challenging at times, he said it hasn’t frustrated him.
“I know that nothing worthwhile comes quickly,” he said. “The timing and pace was necessary to build the type of relationships that were needed.”
Mr. Wheatley, a Hill District Democrat, said he was “grateful and overjoyed” that FNB decided to build its headquarters at the site. He noted it could have done so elsewhere, including out of state in Charlotte, N.C.
“I’m looking forward to building a wonderful relationship with them and seeing the rest of the project get developed,” he said.
FNB, now headquartered on the North Shore, already has closed on the land transfer needed for the new office tower, said Kevin Acklin, chief operating officer and general counsel for the Penguins.
As part of its commitment, the bank has pledged to advance $7.5 million in tax revenues to be generated by the building for use in other parts of the Hill.
That is part of a broader commitment by the team and the Buccini/Pollin Group, its developer, to divert up to $40 million in tax revenues from projects at the site to the middle and upper Hill.
Mr. Acklin said the documents needed to advance the first $7.5 million pledged by FNB have been finalized and that he expects the funds to be deposited with the city’s Urban Redevelopment Authority in September. The URA will be the custodian of the reinvestment fund and oversee its disbursement with guidance from the community. The URA and the Sports & Exhibition Authority each own parts of the arena site.
Getting to this point hasn’t been easy.
There have been battles with Hill stakeholders and residents over the development of the site; the types of benefits pledged; and whether the team was living up to its commitments under a neighborhood benefits agreement, known as the community collaboration and implementation plan.
Some politicians, frustrated over the lack of progress, demanded at times that the team get moving or give up its rights to the land.
The Penguins suffered a major setback in their efforts in 2015 when U.S. Steel pulled out of a deal to build a 285,000-square-foot, five-story headquarters that would have anchored the site. At the time, the steelmaker was facing mounting financial troubles and a higher-than-expected third-quarter loss.
Nonetheless, the decision sent the Penguins back to square one and eventually led to a change in developers. It wasn’t until December 2019 that they reached a deal with FNB to build at the site.
The bank will anchor the office tower, with plans to take more than 160,000 square feet of space spread over nine floors with options to expand. The $240 million price tag is $10 million higher than the estimates just a few months ago.
In the age of COVID-19, the building is expected to feature state-of-the-art ventilation and touchless technology, as well as ground floor retail, a 15,000-square-foot amenity floor and a public plaza.
The team and Buccini/Pollin also are hoping to get final public approvals later this year to begin work on a indoor/outdoor live music venue to be operated by Live Nation, plus a 850-space parking garage.
At full build-out, the Penguins envision a redevelopment totaling more than $1 billion that would feature more than 1,000 residential units, the music venue and parking garage, 1 million square feet of office space, a 400-room hotel, and 190,000 square feet of retail.
Mr. Wheatley stressed that there is more work to be done. He added there’s “still going to be confrontation and disagreements” over aspects of the redevelopment. But in his mind, the FNB tower represents a good start for the region and the neighborhood.
“I’m going to be excited to see a shovel go into the ground,” he said.
One activist who is less than enthused about the start of the project is Carl Redwood, board chair of the Hill District Consensus Group. He doesn’t see it benefiting the majority of Hill residents.
“The revenues will not be developed to meet any of the needs for average Hill District residents. The FNB tower is not for us, just like the Penguins’ arena is not for us, just like the parking lot is not for us,” he said.
However, Mr. Redwood did give neighborhood leaders credit for doing what they could “to make the best of a bad situation for Hill District residents.”
The goal now, he said, is to make sure that the money that comes back to the community, like the $7.5 million pledged by FNB, “goes to the people who have the greatest need.”
Penguins and Buccini/Pollin officials have committed to 30% minority-owned business and 15% women-owned business participation on the project. That's above the city's goals of 18% and 7%, respectively.
So far, they have obtained 41.6% participation in the predevelopment phase — 28.2% from minority-owned businesses and 13.4% from those owned by women.
Mark Belko: mbelko@post-gazette.com or 412-263-1262.
First Published: September 1, 2021, 10:00 a.m.
Updated: September 1, 2021, 10:07 a.m.
