Strip District development plan bogged down, despite court rulings

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Despite two rulings in the past week that seem to favor the Buncher Corp., don't expect the developer to break ground on its proposed $400 million office and residential development in Pittsburgh's Strip District anytime soon.

Instead, the riverfront project likely will remain tangled in the courts or federal regulatory agency for some time over a complicated issue special to railroad law, said attorney Richard Wilson, who represents Allegheny Valley Railroad in one of the cases. The railroad claims it has an easement across the Buncher site that should have prevented the developer from getting the special zoning district designation it needed from the city to proceed with the project.

Last week, the federal Surface Transportation Board, which adjudicates railroad disputes, ruled the rail line that had used the easement had been abandoned before Allegheny Valley acquired the easement.

On Wednesday, Allegheny County Common Pleas Judge Robert J. Colville ruled the railroad isn't entitled to an injunction to stop the project because of plans to demolish part of the iconic produce terminal and reuse the remainder.

The railroad claimed the city's Urban Redevelopment Authority violated a covenant it signed that requires it to try to maintain the produce terminal or "some other rail-oriented use" there, so the project should be halted. The railroad can collect damages later if it proves its claim through a regular case, the judge ruled.

City officials hailed the decisions, which they say could clear the way for construction to begin. Buncher officials couldn't be reached for comment.

"We're pleased with the decisions that were made in the past week," Yarone Zober, top aide to Mayor Luke Ravenstahl and chairman of the URA board, said Thursday.

"At this point, I'm not sure anything stands in the way. Now, we are going to be able to move ahead with development on parking lots -- some of them aren't even used for parking."

Mr. Wilson, who specializes in railroad law, said Thursday the legal proceedings are just beginning.

The ruling by the Surface Transportation Board actually favors the railroad, he said, because it means the rail line was abandoned before the board came into existence. That will allow the railroad to file suit in state court in an attempt to show the line was abandoned but the easement remained in place.

"We're going to have to have a court review the deeds and determine whether the Allegheny Valley Railroad received a valid easement," he said. "We contend there's nothing that shows Allegheny Valley didn't receive a valid easement."

He stressed that the easement remains valid even if there hasn't been rail activity there in more than 20 years. The legal question is whether that easement is owned by the railroad or the developer.

The railroad also has a separate Common Pleas Court suit challenging the city's decision to give the developer a special zoning designation for the site.

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Ed Blazina: eblazina@post-gazette.com or 412-263-1470. First Published April 26, 2013 12:00 AM


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