The Pittsburgh Urban Redevelopment Authority says it has no interest in forcing a foreclosure sale of the August Wilson Center for African American Culture or in “hamstringing” a conservator’s attempts to sell the property.
In court papers filed Friday, the URA rejected claims by Dollar Bank that it was trying to trigger a foreclosure by asserting that existing deed covenants prevent the property from being used for anything but African-American arts and culture. The URA also has maintained the building, as a result of the covenants, cannot be modified without its consent.
The bank, in a May 29 motion, pushed to foreclose on the debt-plagued center if conservator Judith Fitzgerald can’t finalize a deal to sell the property to New York developer 980 Liberty Partners by June 30. In doing so, it stated it was left with no choice given the restrictions asserted by the URA — ones, it claimed, were “calculated to force a foreclosure sale of the center’s assets.”
But in its filing Friday, the authority said its intent is simply to make known that the covenants exist and are binding on any purchaser.
“The covenants are the means by which the URA is to protect the public interest in redevelopment projects. To fulfill this obligation, the URA has entered its appearance in these proceedings to ensure that in any transfer of the property (receivership, foreclosure, or otherwise), the recorded covenants remain in place,” it wrote.
URA officials have argued the restrictions prevent 980 Liberty Partners from acquiring the building and putting a 200-room luxury hotel on top of it. Dollar Bank has claimed the restrictions are subordinate to its $7 million mortgage on the property. The mortgage is in default, the primary reason the Downtown building is being sold.
In Friday’s filing, the authority argued that the bank’s interpretation is “strained” and “contrived” and that the covenants are not secondary to the mortgage. “As a matter of title, the property cannot be transferred free and clear of the covenants, the covenants are not subordinate to the bank’s rights, and the URA is required by statute to enforce the covenants,” it stated.
Judge Lawrence O’Toole of Allegheny County Common Pleas Orphans’ Court may address the issues at a status conference Monday. He has authorized Ms. Fitzgerald to sell the $40 million center — opened in 2009 and named after the Pulitzer Prize-winning playwright who grew up in the Hill District — to 980 Liberty Partners, pending the completion of engineering and architectural studies.
Mark Belko: email@example.com or 412-263-1262.