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City Council approves cheaper deal for new Downtown Pittsburgh police substation

Katie Blackley
90.5 WESA

Update on Nov. 20, 2023: Pittsburgh City Council on Monday approved a nearly $480,000 agreement with PNC Bank to move the city's downtown police unit to Wood Street next year.

Original story published Nov. 16, 2023: Pittsburgh is planning to move its downtown police unit into a building twice the size of the current facility along Liberty Avenue. And although City Council preliminarily approved a nearly $600,000 renovation and lease agreement for a new building on Wood Street earlier this week, members announced Thursday that it will now cost nearly 20% less.

Councilor Anthony Coghill pledged earlier this week to bring the owner of the new building, PNC Bank, back to the bargaining table before council members formally approved the contract.

“I know everything's negotiable,” Coghill told WESA. “Some council members had some issues with the pricing because we're already leasing out our [police] headquarters, we’re leasing out special ops... We're paying a lot of money there.”

Though the Gainey administration said the original $600,000 deal was far below market rate, Coghill argued the city should explore whether the bank would lease the property for even less. “I would just like to ask if we can go back to them and just say we'd like it rent-free,” he said during Tuesday’s council meeting.

Coghill said he and City Council President Theresa Kail Smith reopened the conversation Wednesday, and the bank agreed to bring down the rent from $10 per square foot to $5 per square foot. The new agreement cut the annual rent price in half and puts the total cost of the move at $479,575: an overall 20% decrease.

Coghill praised PNC Thursday.

“They want to be a good partner to the city of Pittsburgh, and they want to be part of the solution,” he said.

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Acknowledging that council unanimously advanced the contract Tuesday, Coghill conceded it would have approved the contract at the original rate if the new deal didn’t come through.

“This was kind of pulling on [PNC's] heartstrings because they're in it for the city of Pittsburgh,” Coghill said.

A PNC spokesperson declined to comment on the details of the agreement, but the bank said in a statement that the deal was an effort to “do our part to help the region move forward as a stronger, safer and more vibrant place to live, work and play.”

“We were glad to help the city realize its plans to open a new permanent public safety center and police substation in the heart of Downtown,” the statement continued.

It appears a shaky financial outlook for the city may have played a role in sparking PNC’s generosity.

Coghill said he stressed to bank executives that the city could be in a precarious financial position in 2025 and 2026, according to city budget estimates. The city is projected to bring in just $3 million more in revenue than it spends during those years. That's a narrow margin: By comparison, the city should reap an estimated $29 million more than it spends in 2024.

The conservative fiscal outlook is the result of a double hit expected at the end of 2024: The city will allocate the last of its federal pandemic aid that year, while payments on existing debt are scheduled to rise in 2025 and 2026 before subsiding.

Coghill said the tough years ahead mean every deal should be negotiated down to the penny.

But Coghill repeatedly stressed that his deal with PNC wasn’t about negotiating with a shark. When asked whether having police presence next to PNC Towers played a role in the bank’s interest in the substation, Coghill said “it doesn't hurt, of course.

“But they're really looking to revitalize the entire corridor and this building being a major part of that,” he said.

Some council members toured the new facility Thursday, according to Coghill. He said he was impressed with the state of affairs inside the building. “Everything is brand new,” he said.

According to Pittsburgh Public Safety Director Lee Schmidt, the larger facility will make it easier for police to coordinate with the city’s outreach workers and other Downtown stakeholders. He said the new deal with PNC is a reflection of multiple arms of government working together.

“I think it's great when government all works together … to get things done,” Schmidt said. “[PNC] knew council had some concerns about the cost and they looked at their stuff and sharpened their pencil a little bit and was able to get it done.”

Council is scheduled to take a final vote on the new deal next week, with police expected to move into the new substation early next year.

Updated: November 20, 2023 at 12:20 PM EST
This story has been updated to reflect that City Council approved the lease agreement for the new police substation.
Kiley Koscinski covers city government, policy and how Pittsburghers engage with city services. She also works as a fill-in host for All Things Considered. Kiley has previously served as a producer on The Confluence and Morning Edition.