A view of the August Wilson Center in Downtown Pittsburgh.
By Elizabeth Bloom / Pittsburgh Post-Gazette
Attorneys for the parties fighting over the August Wilson Center for African American Culture made arguments Thursday on motions related to the appointment of a second receiver for the center and the Urban Redevelopment Authority of Pittsburgh’s deed covenants on the building.
Dollar Bank, which foreclosed on the debt-ridden facility last year, argued in Allegheny County Common Pleas Orphans’ Court in favor of appointing a second receiver to work alongside Judith Fitzgerald, who was appointed conservator by the court in November and has since January been the center’s receiver.
Given the length of the default and the nature of the mortgage, said Eric Schaffer, attorney for Dollar Bank, the bank needs a so-called contractual receiver to ensure that “our rights are preserved.” While a sale of the building to 980 Liberty Partners would be “a great thing,” there is concern about whether that will happen, he said.
“We want to have greater control, as our contract — as the law — permits,” he said. “We’re looking to protect our collateral; we're looking to reduce expenses.”
Dollar Bank proposed the appointment of Pittsburgh real estate firm Baker Young Corp. as receiver.
Other parties represented at the hearing thought a dual receivership could create problems.
“It’s an unprecedented form of relief Dollar’s not entitled to,” said Michael Shiner, counsel to Ms. Fitzgerald. “Dollar has gotten the relief it’s requested already.”
He argued the appointment of two receivers “creates an incredible amount of confusion” and that such a receiver would work only in the interest of Dollar Bank.
“You can’t have two CEOs of a company. You can’t have two presidents of the United States,” he said. “There’s a sales process going on right now … Dollar Bank will be paid fully at closing.”
While the commonwealth would not oppose the bank’s appointment of a receiver, said Sandra Renwand of the state attorney general’s office, “The question is, where is the money going to come from?” The state’s goal, she said, is to protect the center’s charitable purpose. “It doesn’t make sense” to have two receivers, she said.
Mr. Schaffer said Dollar Bank would fund the second conservator.
In addition, attorneys on behalf of 980 Liberty Partners and the URA discussed the deed covenants that could prevent a sale of the building without the URA’s approval.
Attorneys for the URA, 980 Liberty Partners and the receiver agreed that the purchase agreement for the building is subject to the URA’s covenants; whether the covenants can be removed will take another proceeding. The attorneys asked the judge to postpone such a decision.
“We wanted to make sure that our covenants were part of that sales agreement,” said Mark Nowak for the URA.
Shelley Segal, in-house attorney for the URA, became concerned during the arguments about the nature of the URA covenants and approached Mr. Nowak as he and the attorney for the developer addressed the judge. She appeared to want to clarify that the agreement about the nature of the deed covenants did not signal that the URA supported the sale to 980 Liberty Partners.
“I fear we have a Trojan Horse here,” she said. She declined to clarify her views following the hearing.
The parties will negotiate a consent order related to the URA’s motion.
The hearing came the day after a report filed to the court that outlined the new terms of a backup bid proposed by The Pittsburgh Foundation, the Heinz Endowments and the Richard King Mellon Foundation. The bid, now $7.2 million, would include $5 million from the foundations and $2.2 million from the URA and Allegheny County or a county-affiliated entity. The URA would give $1.2 million, and the county or a county-related entity would contribute $1 million.
County administrators said the county’s contribution would not come out of the capital budget.
“As I’ve said over the past few years, county property tax dollars aren’t used for regional assets. That’s what the [Regional Asset District] board was set up for,” county Executive Rich Fitzgerald said.
The county’s involvement in the bid came as a surprise to county Councilwoman Heather Heidelbaugh. The center has no management structure in place, she said, and pointed out that Mr. Fitzgerald had opposed a budget item providing funds to the August Wilson Center last year.
“This is Rich Fitzgerald speaking out of both sides of his mouth,” Ms. Heidelbaugh said. “He can’t have it both ways.”
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