State Attorney General Kathleen Kane and the Pittsburgh Urban Redevelopment Authority urged an Orphan's Court judge Monday to reject the sale of the August Wilson Center for African American Culture, Downtown, to a New York company that wants to put a hotel on top of it.
In court papers filed in response to the proposed sale to 980 Liberty Partners, both told Common Pleas Judge Lawrence O'Toole that the transaction would violate deed covenants put in place before the center opened in 2009.
One requires the building to be used as an African-American culture center and the other prevents changes to the building's exterior without the approval of the URA, they argued.
Ms. Kane said those covenants related to the center's use as an African-American culture center "go to the very mission and purpose for AWC's existence."
She stated that the 980 Liberty Partners proposal "lacks detail" as to the property's use as an African-American cultural center. The only reference, she said, is a "limited five-year license with 'options' to renew, but only if the hotel consents; there is no detail about the size of the space for such a charitable use; and all details are subject to the (undisclosed) hotel franchise agreement."
Ms. Kane and the URA were reacting to the motion filed last week by court-appointed conservator Judith Fitzgerald asking Judge O'Toole to approve the sale of the building, its liquor license and air rights to 980 Liberty Partners for $9.5 million.
The New York firm was the highest of four bidders for the debt-plagued center, which defaulted on a $7 million mortgage owed to Dollar Bank last year.
It is proposing to build a 200-room luxury hotel on top of the Liberty Avenue building while offering the August Wilson Center free gallery, office, and storage space and use of the theater for at least 120 days of the year as part of an effort to preserve its mission.
But in their legal responses, Ms. Kane and the URA raised questions as to whether the transaction was possible, given the deed restrictions.
Matthew Shollar, a Squirrel Hill hospitality developer and consultant who is a partner in 980 Liberty, said in an interview last week that his understanding was that the license agreement was limited to five years with options for tax purposes and that "we see this as being a perpetual agreement." The company also plans to "carve out significant space" for the center, although he could not give an exact amount.
"Our intention is to keep them there for good," he said.
In its response, the URA stated that another covenant bars major improvements to the outside of the building without its consent, adding that the 980 Liberty Partners proposal "grossly alters the exterior of the [structure], including masking all sides but the front sail-like piece."
While Dollar Bank has argued that some of the covenants ended when the building was completed, the URA insisted that those relating to the use and to exterior alterations run until June 10, 2021.
Dollar also has contended that the URA's rights are subordinate to its own, since it is the primary mortgage holder. But the URA claimed that point would be "moot" if the property were sold to 980 Liberty Partners because the mortgage would be paid in full.
The URA prefers the $4 million bid submitted by the Pittsburgh Foundation, the Heinz Endowments and the Richard King Mellon Foundation. In her response, Ms. Kane stated the foundations were the only bidder committed "to continuing the mission of African-American culture, in compliance with the restricted covenants in the AWC deed."
The foundations withdrew their bid last month, saying it was clear that Ms. Fitzgerald favored the highest offer. But Pittsburgh Mayor Bill Peduto and Allegheny County executive Rich Fitzgerald, no relation to the conservator, as well as others have been urging the foundations to get back involved.
Ms. Kane asked Judge O'Toole for more time to try to work with bidders, including the New York firm and the foundations, to "present a qualified acceptable bid (or bids) that would satisfy the use and structure restrictive covenants."
If the center can be maintained, it still can fulfill its mission of representing, celebrating and nurturing African-American culture, according to a group of concerned citizens who met at the Alloy Studios in East Liberty on Monday night as part of an eight-week series of community conversations about the center's future.
Many people in the black community believe the center has been sold and there's no going back, said Janera Solomon, executive director of the Kelly Strayhorn Theater, a past project manager of the center, and an organizer of the August Wilson Center Recovery Advisory Committee. Others have written to ask her who gets to decide the center's fate, she said.
She wrote back and told them that the people who participate in the process will get to decide -- and that can be the community if its members get involved, Ms. Solomon said.
"It's an opportunity for us as Pittsburghers, as artists, as people who care, to have our dreams of a vibrant center that celebrates African-American culture for everyone to enjoy," she told the approximately 18 participants, including former Pittsburgh Councilman Sala Udin and Tim Stevens, Black Political Empowerment Project president. "I think we can make that happen."
But to succeed, participants said, future leaders of the center need to fix the problems that led to its current hardship. The center must reach out to the community, both to engage would-be volunteers and to let would-be patrons know what it has to offer, they said.
It must let the broader community know about its successes, create and execute a plan for financial sustainability and manage its finances more skillfully. It should use its resources to educate citizens about African-American history, especially the local experience, they said.
And through the arts, several participants said, the center should help Pittsburgh residents transcend the cultural, social and emotional lines often drawn among the city's many neighborhoods.
"In Pittsburgh, you're carrying your neighborhood on your back," said Jacquea Mae of East Liberty.
Mark Belko: email@example.com or 412-263-1262. Amy McConnell Schaarsmith: 412-263-1719 or firstname.lastname@example.org First Published May 5, 2014 6:10 PM