Tax break sought to finish housing at Pittsburgh's Summerset site

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Summerset at Frick Park, a luxury residential development that's successfully transformed a former slag heap into a neighborhood of high-priced homes, will need help from local taxpayers to finish its work.

With a two-thirds of the project completed, developers say state money has dried up for the final push, which will add 217 housing units to the development overlooking Parkway East by the Squirrel Hill Tunnel.

They're now seeking tax-increment financing, or TIF, to divert $24 million in property taxes from the neighborhood to pay for infrastructure improvements, including roads and a new bridge.

"The criteria for a lot of the state programs has changed -- they're much more directly linked to jobs," said Craig Dunham, project manager for Summerset Land Development Associates. "A residential housing project has less directions it can go."

State grants heavily subsidized the neighborhood's initial construction, with developers successfully arguing that reclaiming a shifting pile of slag would cost more than they could afford alone.

But the development has proven popular since the first units were sold in 2001, with most lots bought and occupied.

Legislators now say the project can afford to pay for itself -- or look for someone else's help.

The city Urban Redevelopment Authority is taking the second route, seeking a TIF from the city, the county and Pittsburgh Public Schools. County council will be the first to consider the proposal, which will be submitted at this evening's meeting.

According to the draft legislation, the TIF would take 75 percent of the property tax revenue from a portion of the neighborhood's already-occupied homes, as well as 45 percent of the revenue from any new homes built. That'll go to public infrastructure, including new pipes, roads and bridges, as well as the grading and environmental remediation required to make the site habitable.

"I think we've known for a long time that we couldn't go to the state for $15 or $20 million to do this," said Tom Cummings, URA's housing director. "But I think the neighborhood has been extremely successful. I think it's attracted people to the city and kept people in the city."

Most TIFs help fund commercial projects -- a notable example being the Bakery Square business/commercial complex in East Liberty. This would be Pennsylvania's first purely residential TIF.

As such, it will likely face close scrutiny from county councilwoman Heather Heidelbaugh, R-Mt. Lebanon, a frequent critic of taxpayer-funded development. Ms. Heidelbaugh has voted against TIFs before, including one that would rehabilitate several properties on Sewickley's main street.

Although she hasn't yet examined the Summerset TIF, the councilwoman said it would have to meet her cardinal condition -- that tax dollars weren't being used to help one developer over another, especially on something they could have paid for themselves.

"If we help one guy, we're by the very nature hurting another guy," she said. "Taxes are high enough already."

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Andrew McGill: amcgill@post-gazette.com or 412-263-1497.


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