In the acreage spread along the Allegheny River, the Buncher Co. envisions a hotel, a piazza and office buildings, a project that is estimated to cost up to a half-billion dollars over 20 years.
But, at least for now, its vision comes without a tax financing deal with the city that would have diverted up to $50 million of taxes paid on the property for public amenities at the Strip District site -- things like road expansion, traffic lights and street installation.
The company announced Tuesday that it was backing out of the arrangement after Councilman Patrick Dowd stalled the legislation for the tax increment financing, also known as a TIF, and that could mean delays for the project.
Mr. Dowd, a vocal critic of the development, said the Urban Redevelopment Authority, which applied for the TIF on the company's behalf, was too vague about how it planned to use the $50 million.
"It would be really nice to have a clear picture of where all the money in this project is going," he said. He feared the URA would borrow against the funds to create a "slush fund" to use as it wants.
In a news release, Buncher president Tom Balestrieri applauded the proposal as "unique and creative," but said the controversy over the TIF led the company to back out.
"The Buncher Company has earned a highly respected reputation over the last 60 years and does not wish to participate in a financing program the community views negatively," he said. Buncher officials did not return calls for comment.
Paul Svoboda, special projects manager for the Urban Redevelopment Authority, said loss of the TIF will complicate and delay -- but not derail -- plans to fund a 17th Street piazza and other riverfront improvements.
Mr. Svoboda said Buncher may have to tap alternative sources, such as a homeowners association, to finance some amenities and added that the URA will look for federal and state funds to help Buncher cover some costs of public-space improvements.
"These are not the glory days for public funding in D.C. or Harrisburg. These are tough, tough monies to come by," Mr. Svoboda said, calling the TIF a "missed opportunity" to finance improvements in the short term.
To make matters worse, he said, local support such as a TIF often is used to leverage federal or state dollars for a project.
Mr. Svoboda said the project already has been awarded $15 million in state Redevelopment Assistance Capital Program money.
Even without the TIF, Mr. Svoboda said, Buncher will stand by the piazza and other amenities outlined in its development plan. Not all amenities are spelled out in the plan.
Lisa Schroeder, president and CEO of Riverlife, said it was never clear which riverfront improvements would be financed with TIF money.
Though Riverlife has objected to aspects of Buncher's plan, including the amount of riverfront space earmarked for public use, Ms. Schroeder said she looks forward to working with company officials as the development unfolds.
"We do think that Buncher Co. will really strive to make this a high-quality development," she said.
Mr. Dowd voiced similar complaints about a lack of clarity of how the funds would be used.
URA officials have said it's impossible to know how those dollars will be used when the development is expected to unfold over 20 years.
Councilman Ricky Burgess was disappointed that Buncher withdrew from the deal. He said he believed Mr. Dowd should have introduced the legislation to give it a proper public airing.