Developer's plan for Strip District evokes decades-old controversy


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Gleaming new office buildings, a park-like setting, relocation of produce vendors and a huge capital investment.

Before Buncher Co.'s proposed 55-acre Strip District project, the Pennsylvania Railroad proposed its own ambitious plan for remaking the Allegheny Riverfront -- in 1966.

The railroad's proposal, billed as a 148-acre extension of the Golden Triangle and a venture six times the size of Gateway Center, faltered for financial reasons. Buncher's plan, with a prospective investment of $400 million over 10 to 15 years, highlights the Strip District's enduring economic importance and the lingering challenges of large-scale development.

Neither proposal escaped controversy. Some of the railroad's Penn Park design plans drew criticism, while Buncher's Riverfront Landing plan has been dogged by a city councilman's concerns and other objections.

For five weeks, Councilman Patrick Dowd has held up legislation that would create a tax-increment financing plan of up to $50 million for Buncher, which has proposed offices, retail and housing on a site stretching from the Veterans Bridge to 21st Street and from Smallman Street to the river. The project would involve demolishing one-third of the historic produce terminal and likely relocating the wholesalers.

Among other concerns, Mr. Dowd said the city's Urban Redevelopment Authority hasn't indicated how $40 million of the $50 million in financing would be used. Mr. Dowd has accused Mayor Luke Ravenstahl of a "laissez-faire" approach to development, but the URA said it isn't possible to say now how every dollar might be spent over the life of the project.

Ironically, given the Penn Park vision of 46 years ago, other objections to Buncher's project are coming from a railroad.

Russell Peterson, CEO of Allegheny Valley Railroad, which provides freight service to the produce wholesalers, sent city council a letter last week seeking more than $1.8 million for what he described as business losses related to Buncher's plan.

He said the authority has made no move to compensate him for prospective repurposing of the produce terminal or for the loss of his biggest customer, J.E. Corcoran Co., which already has relocated to Thornburg after nearly 100 years in the Strip.

The railroad and Buncher also are locked in a property dispute. The parties are awaiting the U.S. Surface Transportation Board's ruling on whether the railroad owns an easement on Buncher property between 16th and 21st streets -- something that the railroad says could derail Buncher's project but that the URA says would not.

If Buncher loses the legal case, development would have to be planned around the easement, said Robert Rubinstein, the URA's acting executive director. Mr. Peterson said his company obtained the easement in the 1990s from Conrail, a successor to the Pennsylvania and other northeastern railroads. It wants to preserve the easement for possible establishment of commuter rail service between the Allegheny Valley and Downtown.

"I'm just trying to raise everybody's awareness" of issues surrounding the Buncher development, Mr. Peterson said in an interview. Mr. Rubinstein said he hadn't seen the letter and could not comment. Buncher representatives could not be reached.

When the Pennsylvania Railroad unveiled the Penn Park project on May 5, 1966, consultant Robert Dowling stressed "the openness of the plan," including a "great mall, with its reflection pools, fountains, sculpture, the trees, the flowering bushes, the pleasant plazas, contoured terraces -- perhaps best described as a beautiful riverside park."

Penn Park was to have stretched from 10th Street to 21st Street and from Bigelow Boulevard to the river.

Then-Mayor Joseph Barr said the project represented "one of the greatest and most ambitious forward steps in the development of Pittsburgh." Its boosters included Richard K. Mellon, a railroad director and key player in the city's first Renaissance. The project was to include a postal service distribution center, convention center, rapid transit station and series of curved office and residential buildings.

The plan called for removal of some railroad tracks and demolition of the Pennsylvanian, Greyhound terminal and the produce terminal, among other structures. Produce companies would have been relocated to Chartiers Valley Industrial Park.

By December 1971, however, the railroad had put at least part of its Strip District project site up for sale. The land eventually was taken over by Conrail, which, over the years, conveyed parts of the tract to Buncher, the URA and the Allegheny Valley Railroad.

In 1981, Conrail sold the produce terminal to the URA for $1.1 million. In the deed, the authority acknowledged that its "primary public purpose" was to continue using the building for the produce industry. It pledged to use its "best efforts ... to use it as such or some other rail-oriented use."

Now, Mr. Peterson said in his letter, the city, URA and Buncher are ignoring that stipulation with the proposed Riverfront Landing development. Mr. Dowd said the URA is prepared to sell the produce terminal to Buncher for about $1.2 million. The developer would demolish one-third of the structure to extend 17th Street to the river.

The city, URA, Buncher and the Allegheny Valley Railroad all have much at stake.

Riverfront Landing would be part of a burst of Downtown and neighborhood development that Mr. Ravenstahl calls another city Renaissance. Like the Penn Park project, Buncher would emphasize green and open space in Riverfront Landing, reflecting the mayor's broader plan to reconnect Pittsburghers to the riverfront. Instead of the curved buildings of the Penn Park design, Buncher has proposed a series of U-shaped buildings facing the river, according to a rendering in the project's tax-increment financing plan.

Mr. Peterson said many residents in the Allegheny Valley would benefit if he's able to establish a commuter line from the Allegheny Valley and across the Buncher site to Downtown. He said he wouldn't operate the passenger line himself but would sell it to another company for about $35 million. He said he might be willing to forgo his current easement, though, if the city offered him an alternate route for the commuter line and he received other compensation.

neigh_city - businessnews

Joe Smydo: jsmydo@post-gazette.com or 412-263-1548. First Published July 2, 2012 4:00 AM


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