A conservator once again is trying to press ahead with the sale of the debt-plagued August Wilson Center for African American Culture to a New York developer. And the city Urban Redevelopment Authority and state Attorney General Kathleen Kane once again are pushing back against it.
In a proposed interim order filed Friday, conservator Judith Fitzgerald asked Judge Lawrence O'Toole of Allegheny County Common Pleas Orphans' Court to approve a purchase agreement with 980 Liberty Partners, whose $9.5 million offer for the Downtown real estate was the highest of four bids.
The order would give the developer 60 days to do an engineering study to determine if the proposed 200-room luxury hotel it wants to build on top of the center is feasible and 10 days after that to show that it has the money to close.
"Right now we're trying to find out whether this whole process can work as we think it can," Ms. Fitzgerald said.
But the order came under fire from the URA and Ms. Kane. Both stated in court filings that it goes far beyond what was discussed with the judge during a meeting Wednesday in his chambers.
The instructions from that meeting, the URA said, were to craft a consensual order that would allow 980 Liberty Partners to perform an engineering study. But the proposed order far exceeds that in authorizing a sale to the developer, it argued.
In addition, the order, the URA stated, provides for a sale that would be "free and clear" even though it maintains that deed covenants prevent the building from being used for anything other than an African-American cultural center.
It stated that an engineering study could be done through a simple license agreement rather than an executed sales agreement.
The URA also questioned whether 980 Liberty Partners had the means to buy the property and build the hotel. It said that no financial documentation has been provided to or sought by Ms. Fitzgerald to show that the developer can pay the $9.5 million.
"Although counsel for 980 Partners has represented that 980 Partners is backed by 'sophisticated New York investors,' none has stepped forward to show that they exist, or are prepared to finance the purchase of the property should a sale be approved," it stated.
In her filing, Ms. Kane said the proposed order also would delete proposed obligations by 980 Liberty Partners to use a portion of the property for the August Wilson Center charitable mission.
But Matthew Shollar, a Squirrel Hill developer who is a partner in 980 Liberty Partners, said that while he can't comment on the proposed order, "Our intentions are to create a home for the August Wilson Center."
As for whether 980 Liberty Partners has the money for the venture, Mr. Shollar said, "Judge Fitzgerald is a respected jurist with decades of experience, and her job is to perform the due diligence required to come up with a valid bid, and I'm certainly aware that she has done her job."
As an alternative to Ms. Fitzgerald's order, Ms. Kane asked Judge O'Toole to grant authority to the conservator to enter into limited license arrangements with any of the bidders to perform engineering studies or other due diligence.
Even if the judge signs an interim order, Ms. Fitzgerald said, she and 980 Liberty Partners are committed to working with local foundations and others to come up with a "global solution" regarding the fate of the property.
"All of us are working together. Everybody is trying to come to an acceptable solution, but the first thing we have to find out is if we can build a hotel," Ms. Fitzgerald said.
If the hotel can't be built, the developer likely will walk away from the deal.
Along with the URA and Ms. Kane, Mayor Bill Peduto and county Executive Rich Fitzgerald oppose the sale to 980 Liberty Partners. They prefer the bid of the Pittsburgh Foundation, the Heinz Endowments and the Richard King Mellon Foundation.
Those foundations withdrew a $4 million bid for the property last month but returned to the table this week and increased their offer for the building to $5 million with the goal of preserving the center's mission as a venue for African-American arts and culture programming.
The center is being sold to pay off a $7 million delinquent mortgage owed to Dollar Bank and other debts. Judge O'Toole appointed Ms. Fitzgerald conservator after the bank moved to foreclose on the property.
Mark Belko: email@example.com or 412-263-1262. First Published May 23, 2014 2:23 PM