Local foundations have joined with Allegheny County or a county-affiliated entity and with the Urban Redevelopment Authority of Pittsburgh to increase a bid to purchase the debt-ridden August Wilson Center for African American Culture, according to a report filed with Allegheny County Common Pleas Orphans’ Court.
The bid has been raised to $7.2 million from $5 million. The foundations' contribution would remain at $5 million, and the other parties will contribute the difference, said John Ellis, Pittsburgh Foundation spokesman.
“We submitted a revised contingent bid [Tuesday],” Mr. Ellis said.
“The URA has an existing undrawn funding commitment in place regarding the August Wilson Center, and we are in discussions about moving forward with such prior commitment in order to preserve the center as a public asset,” said Kevin Acklin, chairman of the URA’s board of directors and Mayor Bill Peduto’s chief of staff. “As this matter is in litigation, we have no further comment.”
A letter included in the report from Molly Beerman, Pittsburgh Foundation interim chief executive officer, to court-appointed receiver Judith Fitzgerald described the nature of the new offer. The URA would contribute $1.2 million; the county or “an affiliated entity” would chip in $1 million. The letter did not identify which county-affiliated entity might provide those funds.
In addition, the URA “has indicated that it will waive its lien with respect to the center in the event that this [new] bid is eventually accepted,” Ms. Beerman said in the letter. In 2012, the URA loaned the center $574,200.32, according to a motion filed by Dollar Bank in May.
In many cases, the URA makes funding decisions based on a board vote, said Mulugetta Birru, former director of the URA and one of the August Wilson Center’s founders, although he said such actions depend on the funding source.
The bid remains the second-highest of four offers to purchase the $40 million Downtown facility. 980 Liberty Partners, a New York developer, made the highest bid, at $9.5 million.
The foundations’ offer is “a backup bid … should we not close on the building,” said Matthew Shollar, a Squirrel Hill developer who is a partner in 980 Liberty Partners.
Were the foundations to acquire the facility, an affiliated organization of the Pittsburgh Foundation would continue the building’s mission as an African-American cultural center, Mr. Ellis said.
“At no point have we considered alternatives to that, and neither would we,” he said.
A letter included in the report from Ms. Beerman to receiver Ms. Fitzgerald stated that “a management agreement is anticipated with the Pittsburgh Cultural Trust for the first three years of operations to ensure that the center will be operated in a prudent and efficient manner.”
The Pittsburgh Foundation would have the power to appoint and remove directors of the new organization, according to the letter.
Common Pleas Judge Lawrence O’Toole of Orphans’ Court will hold a hearing today that could consider several motions, including whether deed covenants put in place by the URA can prevent a sale of the center to 980 Liberty Partners.
State Sen. Jim Ferlo, who earlier this month voted against a URA resolution to authorize $60,000 in legal fees to a law firm related to the court battle, did not warmly welcome news that public entities were joining the foundations’ bid.
“I believe that the center will not be sustainable, notwithstanding turning control of the center over to the Cultural Trust. Most of the cultural assets that are affiliates of the Trust are struggling with their own need for programming and capital expenditures,” he said in a statement. He is a URA board member but said his comments reflected his personal views as state senator.
980 Liberty Partners plans to build a 200-room luxury hotel on top of the Downtown property. It has completed an engineering study that confirmed it could build such a structure, Mr. Shollar said.
According to the terms of the proposed sale, the center would be able to use free gallery and exhibition space and limited office and storage space in the redeveloped building. It would also have access to the theater for at least 120 days per year for a nominal fee.
The August Wilson Center defaulted on a $7 million mortgage last year and has roughly $10 million in debt. In the report, Ms. Fitzgerald said that she would terminate two of the center’s three staff positions July 31 “in the effort to begin the transfer of the property to the successful bidder.”
Mayor Bill Peduto, county Executive Rich Fitzgerald — no relation to the receiver — and Attorney General Kathleen Kane oppose the sale to the hotel developer.
Elizabeth Bloom: firstname.lastname@example.org or 412-263-1750. Twitter: @BloomPG First Published July 2, 2014 12:00 AM