Wilson Center suitor OK to pursue purchase

Judge says developer can draw hotel plan

The August Wilson Center for African American Culture is a big step closer to being sold to a New York developer.

Judge Lawrence O'Toole of Allegheny County Common Pleas Orphans' Court signed an order Tuesday authorizing the sale of the 5-year-old Downtown building to 980 Liberty Partners, as requested by conservator Judith Fitzgerald.

Approval of the sales agreement clears the way for the developer to begin engineering and feasibility studies to figure out whether it can build a 200-room luxury hotel on top of the structure.

The results will determine whether it moves forward with the purchase, said Matthew Shollar, a Squirrel Hill developer who is one of the partners in 980 Liberty Partners.

"Our ability to do the plan hinges on the feasibility of construction," he said. "We're only interested in this project as a development project."

With the decision, 980 Liberty Partners will have 60 days to complete the engineering and feasibility studies, although that could be extended. It will have 10 days once the due diligence has been finished to show that it has the $9.5 million to close on the sale.

"I'm happy that we can move forward. We really do need to find out the results of the engineering study that the proposed buyer has to commission to see if the hotel can be built at all," Ms. Fitzgerald said.

If the studies show that it can't be built, "we're basically starting over" in terms of a sale, she said.

The developer submitted the highest of four bids for the property with the plan to build a hotel on top of it while offering free gallery, office and storage space to the August Wilson Center and use of the theater for at least 120 days a year at a nominal fee. It also is hoping to set up an ongoing revenue stream to aid in continuing the center's mission.

Judge O'Toole authorized the sale despite opposition from Pittsburgh Mayor Bill Peduto, county Executive Rich Fitzgerald and state Attorney General Kathleen Kane, as well as the city's Urban Redevelopment Authority.

All favor a lower bid submitted by the Pittsburgh Foundation, the Heinz Endowments and the Richard King Mellon Foundation to buy the center with the goal of preserving its mission. The three foundations originally offered $4 million for the building and then withdrew it before returning to the table last week with a $5 million bid.

Mr. Fitzgerald, no relation to the conservator, stressed Tuesday that he would continue to fight the sale to 980 Liberty Partners. He said he doesn't think it would further the mission of the center, named after the Pulitzer Prize-winning playwright who grew up in the Hill District.

He also noted that the URA has maintained that the sale would violate deed covenants that prevent the building from being used for anything other than a center for African-American culture, a contention Ms. Fitzgerald disputes, and that the proposed hotel reuse likely would require city zoning approvals.

"I think we're a long way from a sale moving forward and being commenced," he said. "This isn't something we support. It's certainly not anything I support and the mayor has been pretty clear in his statements."

In a prepared statement, Kevin Acklin, Mr. Peduto's chief of staff and URA board chairman, said, "The August Wilson Center is a public asset, and what is most important is that the nonprofit mission be the primary focus."

Added J.J. Abbott, a spokesman for Ms. Kane, "We will continue to work with all parties, including the court, to find a resolution that best protects the public's investment in the center's mission."

While winning approval from the judge to move ahead with the sale, Ms. Fitzgerald stressed that she still plans to work with the foundations, the URA, Ms. Kane and others to come up with a "global resolution" acceptable to all parties.

"All of us are committed to trying to work together to see if we can come up with something that satisfies all of the objections that have been raised," she said. "Truly I think something can be done. I think the parties really want to try to come to a negotiated resolution."

Likewise, Mr. Shollar said 980 Liberty Partners is interested in continuing discussions with the foundations and the others. "We would like to see a global solution to this involving all of the constituencies," he said.

John Ellis, a spokesman for the Pittsburgh Foundation, declined comment, as did Eric Schaffer, attorney for Dollar Bank.

Judge O'Toole last year appointed Ms. Fitzgerald, a former U.S. bankruptcy judge, after Dollar Bank foreclosed on the center because of a $7 million delinquent mortgage. He authorized her in January to sell the $40 million building to pay off the mortgage and other debts after efforts to save the center failed.

In court documents, the URA has questioned whether 980 Liberty Partners has the funding to buy the property, but Ms. Fitzgerald said her preliminary work shows that the "money will be there" at closing.

While Tuesday's order clears the way for the sale, Judge O'Toole still would have to give his final approval before the property actually changes hands.

Mark Belko: mbelko@post-gazette.com or 412-263-1262. First Published May 27, 2014 12:29 PM

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