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News Of Penn Plaza’s Redevelopment Shook Pittsburgh. What Did The City Know Before It Happened?

Joaquin Gonzalez
90.5 WESA
The Penn Plaza Apartments were torn down in 2017 to make way for new development.

Five years ago, a place called the Penn Plaza Apartments burst into the city of Pittsburgh’s collective awareness, when a letter from the building’s landlord became public.More than 200 people lived in the two buildings at the corner of S. Negley and Penn avenues. Many of them were older and had moderate or low incomes; a number of people held housing vouchers. In the summer of 2015 that letter told people their leases were due to expire, they would not be renewed, and they had 90 days to find new places to live. The notice didn’t go to everyone, but it caused a panic in the buildings; who would be next?

A couple people told state Rep. Ed Gainey about the notice and he started to make calls. Then there was a newspaper article in the Pittsburgh Post-Gazette. And then advocacy group Action United worked with Penn Plaza residents to organize a meeting with a full slate of public officials: Mayor Bill Peduto, City Councilor Ricky Burgess, County Executive Rich Fitzgerald, Rep. Gainey, and Valerie McDonald-Roberts, who was then the mayor’s chief urban affairs officer.

The meeting was held on a Saturday morning in mid-July 2015 at East Liberty Lutheran Church, across the street from Penn Plaza. It was hot. As more and more people settled into chairs the air in the room thickened. A video taken by filmmaker Chris Ivey shows people fanning themselves with the flyers handed out by activists. Officials sat at a long table at the front of the room.

After a number of speeches, Peduto eventually took the microphone to answer a question. He said he couldn’t begin to imagine what the residents were going through, that he had just learned about it a week earlier, and that his administration was ready to take a stand.

“So that other developers will know around the city, we don’t do business this way,” he said. “It’s not about the brick and mortar and what will replace it, it’s about the people that live inside of it.” 

Soon after that meeting, it seemed like the entire city was talking about Penn Plaza and the buildings’ owner, LG Realty; about how development affects long-time residents in communities; about how Pittsburgh’s resurgence seemed to come at the expense of Black neighborhoods or people least able to bear the cost, emotional and financial, of a move.

Looking back, Kevin Acklin, who was the mayor’s chief of staff at the time, said the city was blindsided by Penn Plaza.

“Traditionally, if somebody wants to do a development they'll set up a meeting with the mayor, they'll set up a meeting with the council member, county executive, just to make us aware … if there were going to be problems, community problems,” he said. “Someone who wants to do the right thing would come in and say, ‘This is what we're doing.’ Months before anything is public.”

A crisis 50 years in the making

The Penn Plaza Apartments were one of several large apartment complexes built in Pittsburgh’s East Liberty neighborhood in the late 1960s as part of the city’s sweeping mid-century urban renewal projects. Urban renewal stemmed from a federal law passed in 1949 that gave city leaders enormous power, and significant funding, to reshape communities. If a city declared a neighborhood blighted, officials could tear it down and rebuild it from scratch.

Across the country urban renewal projects mostly targeted Black and integrated neighborhoods. Many of those neighborhoods had struggled with disinvestment and decline, the result of an earlier federal policy called redlining. Mortgage agents in the 1930s graded neighborhoods from A, “best” to D, “hazardous.”

The latter were considered the most risky, the least valuable and colored red on the maps, hence the term, redlining. In Pittsburgh, large swathes of the North Side, the Hill District and East Liberty were all redlined.

Social psychiatrist Dr. Mindy Fullilove said redlining enforced and encoded segregation, and it sucked the wealth right out of neighborhoods. That was not an accident.

“Neighborhoods don't become distressed by themselves,” she said. “Neighborhoods become distressed because our society structures who gets money.”

When Mayor David L. Lawrence looked around Pittsburgh in the late 1940s and 1950s, he saw a dwindling white middle class and a city wasted by 100 years of heavy industry. In addition to imposing pollution controls, he eagerly adopted urban renewal: part of Hazelwood was torn down and sold to a nearby steel mill; homes and factories at the Point were cleared to make way for a park and new office towers; the North Side was ravaged to make way for new apartment buildings and a mall called Allegheny Center; and 100 acres of the predominantly Black Hill District were demolished. There were no community meetings in the Hill. Then the city acquired 254 acres of houses and businesses in East Liberty, and tore down about half.

The neighborhoods targeted for urban renewal languished in the latter half of the 20th century. In Pittsburgh, that was compounded in the 1980s by the nationwide collapse of the manufacturing and steel industries, which cratered the city’s economy.

In the late 90s and early 2000s, cities across the U.S. started to see a comeback, and Pittsburgh wasn’t immune. The city remained more affordable than a lot of other places, but a market for commercial and residential development was heating up.

It had been so sedate for so long that changes in East Liberty — the closure of those old 1960s complexes which had been home to more than 1,000 people, new construction, a Target, Bakery Square — seemed swift. And then Penn Plaza happened. Cities across the country grappled with a growing housing squeeze, but it didn’t really land for Pittsburgh until that moment in 2015.

The events at Penn Plaza became shorthand for all the ways in which Pittsburgh was changing and failing. And people saw the head of LG Realty, Larry Gumberg, as a symbol for everything wrong with Pittsburgh’s resurgence.

“The example of Penn Plaza”

The story everyone knows missed a lot.

WESA’s new podcast, Land & Power, retells the story of Penn Plaza as a way to examine how development happens in a city, and what that means for the people who live there. Over the course of the reporting, Larry Gumberg held that he and his company did exactly what then mayoral chief of staff Kevin Acklin expected: they met with the city and alerted officials to their intent to redevelop. But Acklin maintained that wasn’t the case.

Records reviewed by WESA indicate discussions with city officials began in the spring of 2015. It was at least three months before the church meeting, before non-renewal letters went out to residents. Exactly who was part of those discussions and what they talked about is unclear.

In an August interview with WESA, Mayor Bill Peduto said he and his administration were indeed working with the Gumbergs on a redevelopment plan. “But we had a good working understanding … that there would be a plan for the people before there'd be announcements of the development.”

This seemed so different from his response in 2015, when he sat in front of a room full of people about to lose their homes and told them he only found out about a week before.

“I wouldn’t have run for office if that were the way we were going to do business in this town, and the first that I heard of it was the day before it got in the newspaper,” he said at that meeting in the East Liberty Lutheran Church. “Because some of the tenants reached out to Representative Gainey, and he called up and said ‘what the hell is going on?’”

He didn’t mention his “good understanding” with the Gumbergs at the 2015 church meeting, nor has he done so publicly in the five years since.

Looking back, Peduto said he meant the city was surprised by the non-renewal letters, not by the development. He said he thought that was clear.

All along, the city said if they’d only had a heads up, all the pain and confusion and scrambling could have been avoided. But they had a heads up, that wasn’t the problem. The problem was they actually wanted something specific: advance notice of when the Gumbergs would ask people to leave. It’s unclear how specifically that was spelled out.

Peduto told WESA in August, “I said [to the Gumbergs], ‘Make sure to take care of the people,’ and I assumed that that meant that over the course of the next three to six months, they'd start having meetings and start meeting with the community and everything else. And instead, they just sort of announced it and there was no plan for the people.”

None of the city’s rules said the Gumbergs had to do what the city wanted them to do; it wasn’t written or codified anywhere. In the absence of clear expectations, two people understood their understanding in different ways. Bill Peduto assumed he knew what Larry Gumberg would do. He was wrong.

When asked in August if there are now guardrails in place to prevent something like Penn Plaza from happening again, Peduto turned the question over, thinking out loud.

“You can't call them rules. You can't call them policies. You can't call them laws,” he said. “Are there guidelines that would make somebody follow the process that we require? Even though it's not a requirement.”

Ultimately, this is where the mayor landed: “I think if anything it's the example of Penn Plaza.”

In mid-November, Peduto backtracked, contradicting the statements he made during his August interview. In an email to WESA, a spokesperson wrote the city didn’t know about Larry Gumberg’s plans for Penn Plaza — that the extent of the city’s knowledge was a passing comment Gumberg made to the mayor at an event.

Did Penn Plaza change Pittsburgh?

The city made significant changes in the aftermath of the events at Penn Plaza: city council voted to create and underwrite the Housing Opportunity Fund. In 2018, the city created Registered Community Organizations in an attempt to better coordinate communication between the neighborhoods, the city, and developers. There are new public engagement guidelines for city-owned parcels of land. There are two different pilot programs that are intended to expand the pool of available, affordable homes. In September, the city launched an initiative called Forging PGH that will examine how Pittsburgh uses land and how that could be different.

Despite those changes, the systems that review and approve development proposals remain largely the same. Nearly 20 percent of the land in Pittsburgh is vacant. Much of it is cheap, and for sale.

Listen to 90.5 WESA’s Land & Power podcast on our website, Apple Podcasts, Spotify and on Stitcher.

Margaret J. Krauss is WESA’s senior reporter. She covers development and transportation, and has produced award-winning podcasts on housing, work, and Pittsburgh’s lesser-known history. Before joining the newsroom full time, she covered the challenges facing Pennsylvania cities as a statewide reporter, and spent another life as an assistant editor for National Geographic Kids Magazine in Washington, D.C. She can be reached at
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