Foundations won't compromise with hotel developer on August Wilson Center's future

There will be no meeting of the minds between the two bidders for the August Wilson Center for African American Culture.

A consortium of local foundations plans to stick with its offer to buy the Downtown building after a meeting Wednesday with representatives of New York City developer 980 Liberty Partners failed to produce a compromise.

The Pittsburgh Foundation, the Heinz Endowments and the Richard King Mellon Foundation said they found no middle ground given the respective visions for the future of the center’s Liberty Avenue building.

They are offering $7.2 million for the property with the intent of preserving it solely as a center for African-American arts and culture. 980 Liberty has a sales agreement to buy the building for $9.5 million, with a plan to erect a hotel on top of it while giving the August Wilson Center limited free space for its operations.

In a letter to Matthew Shollar, a partner in 980 Liberty, Grant Oliphant, president of the Heinz Endowments, made it clear that the foundations could not reconcile the two visions.

“It comes down to the simple truth that you want to build a hotel whereas we want to save the August Wilson Center — not a vestige of it, but the rich totality of what it stands for. For us, this building is a community asset and home to a noble ambition that still deserves to have a place of its own. That is the vision laid out in our bid, which would preserve 100 percent of this public asset to carry out the mission for which it was created,” Mr. Oliphant wrote.

The consortium’s decision to go its own way complicates the efforts of court-appointed conservator Judith Fitzgerald to find a “global resolution” between the warring factions to save the building short of a sheriff’s sale.

Ms. Fitzgerald said Wednesday that she knew about the meeting but did not know the results and could not comment extensively. But she did not seem to be surprised by the foundations’ stance.

“From my point of view, that’s what they pretty much have been saying all along. I don’t know what else to say. I guess we’re going to have to proceed without their involvement,” she said.

Mr. Shollar, who complained that the news media received the foundations’ letter before he did, said 980 Liberty would prepare a detailed response.

“I believe the tenor of our discussion and the group of people in the room from the hotel development side as a group expressed a willingness to encompass most, if not all, of the foundations operational desires into a co-location plan. Mr. Oliphant’s letter once again mischaracterizes the information we shared, our discussion, and our intentions going forward,” he said.

“While I regret the tone of the letter, we remain interested in sitting down with all of the parties, including the foundations, to reach a mutually acceptable structure.”

But in an interview after the meeting, Mr. Oliphant said he didn’t think that was possible. He said the foundations and 980 Liberty have “two radically different visions” for the center. In the letter, he argued that the 980 Liberty plan “does great injustice to both the architecture and mission of the center, treating it as little more than a part-time theater.”

“From our perspective, we explored the possibility for a middle ground, but there isn’t one that we can find with their plan. We are going to continue to pursue our bid and our effort to save the August Wilson Center. We expect them to continue their bid to build a hotel. We’ll see what happens,” he said afterward.

As part of its bid, 980 Liberty is proposing to build a 200-room luxury hotel on top of the center. It is offering the August Wilson Center organization free gallery, office and storage space in the existing building and use of the theater for at least 120 days of the year at a nominal fee as a means of preserving its mission.

The foundations are proposing to buy the building with the intent of preserving the center’s mission as a hub for African-American arts and culture. The center would operate as an affiliate organization with its own independent and newly appointed board of directors, including African-American community leadership. Daily operations would be overseen by the Pittsburgh Cultural Trust.

Mr. Oliphant said the foundations offered a compromise in which they would buy the existing building and 980 Liberty would purchase the air rights above it to build the hotel but that the developer rejected it.

The proposal, Mr. Shollar retorted, wasn’t feasible “because we have not found a way to finance such a transaction.” If such a way could be found, 980 Liberty would be willing to evaluate it, he added.

In the letter, Mr. Oliphant also raised questions about the hotel proposal and its financing, saying that the plans and outside commitments necessary to implement them “remain so contingent and vague at this point that we have significant concerns about both the viability of the development and its ability to keep its many promises to the community over time.”

The August Wilson Center’s building was put up for sale by Ms. Fitzgerald after the center defaulted on its $7.9 million mortgage. Dollar Bank, the mortgage holder, has said it will put the property up for sheriff’s sale Oct. 6 if a buyer isn’t found by then.

Mayor Bill Peduto, Allegheny County Executive Rich Fitzgerald and the city’s Urban Redevelopment Authority have been trying to block the sale to 980 Liberty. They favor the foundations’ bid.

Mark Belko: or 412-263-1262. First Published August 27, 2014 3:03 PM

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