Work on Pittsburgh’s Lower Hill district project is once again behind schedule. While delays have been common, for the first time the development arm of the Pittsburgh Penguins will pay a penalty.
Pittsburgh Arena Real Estate Development LP was supposed to buy 6.45 acres of land by Oct. 22 this year. They said the pandemic set them back, and they requested a six-month extension. The Urban Redevelopment Authority’s executive director, Greg Flisram, said in a statement that the authority denied that request. Now, 20 percent of the parking money the Penguins collect from the site will be held in an escrow account.
The URA is simply following the legal agreement it has with the Penguins, said Pittsburgh City Councilor Daniel Lavelle, who is also a URA board member. When the Penguins missed the October deadline, he said they failed to follow the deal.
“If they were to not continue to follow it, and there would be additional penalties down the road … enforcing this one would allow us to then enforce the second or the third,” he said.
It’s not really a penalty, said Kevin Acklin, chief operating officer for the Penguins. The money being held in escrow will come back to the Penguins as long as they buy and develop 10.75 acres by 2023.
The Penguins knew in April, as the coronavirus steamrolled the economy, that they would not be able to meet the October deadline. “No one expected us to,” said Acklin.
This is just the latest delay in a long string of missed deadlines on the project, which has its roots in a 2007 deal aimed at keeping the Penguins in Pittsburgh. In exchange for staying in town, the city and county promised the Penguins a new arena and exclusive development rights to the Lower Hill.
The original deal contained very few accountability measures, and essentially gave the Penguins little incentive to develop. The parties reached a new agreement at the end of 2017, which created the land-buying deadlines and accompanying penalties.
Despite the uncertainty with the economy and the pandemic Acklin said, “we fully expect to be in the ground next year” to build a music venue, parking garage, and an office tower anchored by First National Bank.