New York developer signs agreement to buy August Wilson Center

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The August Wilson Center for African American Culture would not have the run of the building it has called home for the last five years if a New York developer takes control of the property.

Under the sales agreement signed between 980 Liberty Partners and conservator Judith Fitzgerald, the reorganized center would receive free gallery and exhibition space on the first floor and limited office and storage space elsewhere in the building — subject to “reasonable and necessary design limitations and concepts.”

In addition, it would get use of the theater, to be renamed the “August Wilson Theatre,” for at least 120 days a year at a fee estimated at $1 a ticket.

The agreement between 980 Liberty Partners and the center for the use of the space would run for five years with four consecutive five-year renewals if the two parties agree.

Details of the proposed arrangement were contained in the sales agreement signed May 27 and filed Wednesday in Allegheny County Common Pleas Orphans’ Court, eight days after Judge Lawrence O’Toole gave his approval to go ahead with the purchase.

The developer is offering the high bid of $9.5 million for the Downtown property with plans to build a 200-room luxury hotel on top. It also has said that it would offer space to the center, which is in default of its $7 million mortgage, to help it continue its mission as a source of African-American arts and culture programming.

But Janera Solomon, executive director of the Kelly Strayhorn Theater and an organizer of the August Wilson Center Recovery Advisory Committee, questioned whether the center would be sustainable with the limited space.

“When I hear that kind of reduced footprint, I can’t think of a business plan that really makes it work. That would be my concern — those limitations might kill the concept altogether,” she said. “What you’re describing is not a center.”

Matthew Shollar, a Squirrel Hill developer who is one of the partners in 980 Liberty Partners, couldn’t be reached for comment Wednesday.

He couldn’t estimate several weeks ago how much space would be devoted to the center, saying that would be determined in the due diligence period that started May 27.

But he added at the time that there likely would be a separate entrance to the center and its gallery and theater space, noting that the goal was “very much to create a positive solution for the center going forward.” The developer also has talked about creating an ongoing revenue stream for the center to sustain it and hiring a curator to help develop the gallery space and exhibits.

Nonetheless, under the terms of the sale, the license agreement with the center would take a back seat to any hotel franchise agreement the developer reaches.

The purchase agreement gives 980 Liberty Partners 60 days from May 27 to perform due diligence on the building and 30 days to complete engineering and architectural studies to determine if the 200-room hotel is feasible. The developer has the right under the agreement to walk away from the deal at the end of the due diligence period, and Mr. Shollar has said it would if the hotel can’t be built.

During the due diligence, 980 Liberty Partners also must secure a commitment on the financing for the purchase and from a hotel franchise to operate the proposed hotel. A $50,000 deposit must be made 30 days from May 27 or when engineering and architectural studies are completed, whichever come earlier.

The sales agreement gives Ms. Fitzgerald the right to continue discussions with the other bidders for the property, including three local foundations, to secure a “back-up bidder” if the sale to 980 Liberty Partners falls apart.

Ms. Fitzgerald said Wednesday the backup would serve as the starting point in the bidding for the building if the sale to 980 Liberty Partners isn’t completed and an auction is held.

The conservator also is trying to fashion a “global resolution” that would involve the developer and the foundations as well as those opposed to the sale. The three foundations — the Pittsburgh Foundation, the Heinz Endowments and the Richard King Mellon Foundation — have the second-highest bid, $5 million, for the property. Ms. Fitzgerald said she is continuing to meet with all the parties in that effort.

Mayor Bill Peduto, county Executive Rich Fitzgerald and state Attorney General Kathleen Kane all oppose the sale to 980 Liberty Partners, arguing the transaction is not in keeping with the center’s mission.

Mr. Fitzgerald, no relation to the conservator, said Wednesday he would continue to fight the sale. He said the African-American community, the foundations and the public need to be more involved in the discussions surrounding the center than they have been.

“As far as I’m concerned, this should not go forward,” he said.

The building was put up for sale after the center defaulted on its mortgage to Dollar Bank last year and the bank moved to foreclose. The proceeds from the sale would go to pay off the mortgage and other debts.

Mark Belko: or 412-263-1262. First Published June 4, 2014 1:13 PM

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