The Hyatt Regency Hotel at Pittsburgh International Airport is a step closer to being sold in a deal that would put the property on the tax rolls for the first time in its 13-year existence.
To help pave the way for the sale, the Allegheny County Airport Authority board voted Friday to terminate its lease agreement with the Dauphin County General Authority, the owner of the hotel since it opened in 2000.
At the same time, the airport authority agreed to a new ground lease with MHF PIT IV LLC, an affiliate of Magna Hospitality Group of Warwick, R.I.
MHF reached an agreement with the Dauphin authority last summer to buy the hotel for $44.5 million. The authority hopes to close on the sale Nov. 21.
The Dauphin authority's tenure as owner has been marred by its inability to make payments in lieu of taxes to Allegheny County, Findlay and the West Allegheny School District.
As a quasi-governmental authority, the Dauphin authority had agreed to make the payments to compensate for the loss of property tax revenue on the tax-exempt real estate, but never had the money left over to do so after paying a slew of bills that had priority under its deal with Allegheny County.
By the time it reached an agreement with MHF last summer to buy the hotel, the tab for back taxes stood at nearly $9.2 million.
Under the new deal, MHF has agreed to pay a $750,000 lump sum for the back taxes. Of that amount, the West Allegheny School District will get $558,900; Allegheny County, $142,800; and Findlay, $48,300.
MHF also has agreed to a 10-year tax plan under which it will make annual tax payments of $475,000, to be divided up among the three taxing bodies.
That will result in $353,970 a year for the school district; $90,440 a year for the county; and $30,590 annually for Findlay, based on their millage rates. The payments will be fixed for 10 years, starting in 2014, regardless of any other county-certified assessments.
Gary Klingman, Findlay manager, said one purpose in drafting a 10-year agreement was to eliminate any assessment appeals during that period.
David Shannon, vice chairman of the Dauphin authority board, described the pending sale as "mission accomplished."
"That's been our goal," he said. "This current board has been trying to divest itself of assets that have been accumulated [over the years] that we really don't think a government entity should own."
MHF affiliate Magna, founded in 1998, is a privately held hotel real estate investment firm dedicated to hospitality investment, development and management, according to its website. It owns or operates 19 hotels with more than 3,800 rooms and has another five hotels and 700 rooms under development.
Mark Belko: email@example.com or 412-263-1262.