The Heinz Endowments is battling a court-appointed conservator over the return of a $500,000 endowment grant it awarded to the August Wilson Center for African American Culture seven years ago.
In a petition filed in Allegheny County Common Pleas Orphans’ Court, the foundation demands the return of the money, arguing that the center has ceased to operate and no longer qualifies for the permanently restricted endowment grant.
But conservator Judith Fitzgerald, a former bankruptcy judge, is refusing. She said the center is by no means shut down and has hosted a slew of events this summer, the most recent one on Aug. 2.
She said in a phone interview that she would oppose returning the money. “Up through Aug. 2, this is a fully functioning organization,” she said.
In making its case for the return of the money, the Heinz Endowments stated that one of the requirements of the grant, awarded in 2007, was that it would be given back should the center “for any reason cease operation.”
It noted that Ms. Fitzgerald is trying to sell the Downtown building to pay off a delinquent mortgage and other debts and that Dollar Bank, the mortgage holder, plans to foreclose on the property Oct. 6 if there is no sale.
“Further, it is inconceivable that the center could continue to operate during foreclosure proceedings as was contemplated at the time of the grant,” the foundation stated.
While Ms. Fitzgerald had yet to see the foundation’s petition and could not comment extensively, she said the center hosted 10 events between the end of June and Aug. 2 and “isn’t shut down.”
She added that her choice to buy the building, New York developer 980 Liberty Partners, wants the organization to continue and is willing to commit to 99-year lease for that purpose. The developer has offered a high bid of $9.5 million for the property.
“There is no intent to shut down the August Wilson African American cultural organization, not by 980 and not by the foundations, so they say,” she said.
The $500,000, she said, remains in a trust. With permanently restricted endowment grants, the principal amount is protected but the interest it generates can be spent.
John Ellis, a Heinz Endowments spokesman, said the foundation wants to use the funds to “support African American arts and culture in some capacity in the Greater Pittsburgh area.”
“It is our hope that they can be used in conjunction with our plans for the August Wilson Center if our bid is successful,” he said.
The Heinz Endowments, the Pittsburgh Foundation, and the Richard King Mellon Foundation have offered a $7.2 million “standby” bid for the center’s building in the event the sale to 980 Liberty falls through. Included in the offer would be a $1.2 million contribution from the city’s Urban Redevelopment Authority and $1 million from a county-related entity.
In a news release Monday, the foundations said their goal is to preserve the center as “a preeminent hub for African American arts and culture.”
If its bid is successful, the ownership of the building would be transferred to the Pittsburgh Foundation. The center would operate as an affiliate organization with its own independent and newly appointed board of directors, including African-American community leadership.
The foundations also would consider an initial three-to-five-year period of support for the center’s operations, management and maintenance, with the expected help of public funds. The Pittsburgh Cultural Trust would oversee day-to-day operations.
“We consider our bid to represent the only plan that will preserve the August Wilson Center, both in its structure and its mission. Our plan is simple and guarantees that Pittsburgh will safeguard a cultural and architectural treasure which our community has invested tens of millions of dollars to create,” Heinz Endowments President Grant Oliphant said.
The URA, Mayor Bill Peduto and Allegheny County Executive Rich Fitzgerald have all backed the foundations’ bid and have opposed the offer of 980 Liberty, which plans to build a 200-room luxury hotel on top of the building while continuing the August Wilson Center in part of it.
Matthew Shollar, a 980 Liberty partner, on Monday accused the foundations and Mr. Oliphant of mischaracterizing the developer’s intentions but said he still would like to work with them to reach a consensus that would allow a deal to move forward.
Mark Belko: email@example.com or 412-263-1262.