Steelers, developer ask state to help subsidize amphitheater

Want $4 million for North Shore project

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The Steelers and a Columbus, Ohio, developer are seeking a $4 million public subsidy to help with the construction of a $12 million entertainment complex on the North Shore that was the subject of a controversial land deal last week.

Frank Kass, chairman of Continental Real Estate Cos., said yesterday the state grant is needed to make the economics of the proposed project work.

Mr. Kass said the subsidy would replace a state grant of the same amount that the Steelers received four years ago to build a 5,600-seat amphitheater at the same spot.

That project never came to fruition and the Steelers ended up giving up the grant so it could be used to fund construction of a North Shore parking garage to replace parking lots lost to development.

"When the project was conceptualized, it was conceptualized with a subsidy," Mr. Kass said, referring to the amphitheater project. "Nothing has changed."

The indoor and outdoor entertainment venue would be built on a 3.9-acre tract next to Heinz Field.

Stadium Authority board members voted 3-1 last week to sell the land to the Steelers for $1.37 million, or $8 a square foot, over the protests of board Chairwoman Debbie Lestitian, who argued that the city wasn't getting the best price for the land, which she described as the "crown jewel" of the North Shore.

Some opponents of the deal have said the land is worth eight to 10 times the amount the Steelers are paying for it. But an appraiser hired by the Stadium Authority said the real estate, based on its use as an entertainment complex, was worth $1.1 million. He said its highest and best use would be for parking.

Mr. Kass said that without state help, Continental and the Steelers probably wouldn't be able to spend more than $8 million to build the complex, based on expected revenues.

"You can't do any of this stuff without a subsidy. None of it makes sense," he said.

But city Councilman William Peduto, who labeled the land sale a "sweetheart deal," also criticized a potential public subsidy for the entertainment project, particularly given that taxpayers footed much of the bill for the construction of PNC Park and Heinz Field.

"There was a commitment when Steve Leeper was the Sports & Exhibition Authority director that there would be no additional taxpayer money used in the development between the stadiums. Somebody has decided to change that rule. That's not surprising given everything that's happened in the past year on this land," he said.

If state redevelopment assistance money is involved, City Council, he said, may have to authorize the application.

Asked if he would vote in favor of such a request, he replied: "Given that they were able to purchase the land at one-fifteenth of its value, at some point we have to question why all the benefits are being given to one developer for one piece of land."

But Mr. Kass said that when completed, the entire North Shore development -- offices, condominiums, restaurants, the entertainment complex -- will be valued at $150 million, with only $4 million of that coming from taxpayers.

He added that the entertainment complex itself will be a source of income, property and sales tax revenues for the city, county and state that will far exceed the $4 million state investment.

"Right now the land is sitting there. It is generating zero revenue except parking revenue for the [Sports & Exhibition Authority]. The Steelers will buy the land at a value determined six years ago. They will put up an entertainment facility that will pay sales tax back to the state, liquor taxes back to the state, real estate taxes back to the city, county and school district, and income taxes back to the city and the state," he said. "The sum total of that will be an excellent return back to the state."

Under a term sheet approved last week as part of the Stadium Authority vote, Continental and the Steelers must have the entertainment complex, to be done in conjunction with PromoWest Productions of Columbus, under construction by Dec. 1 and completed by Dec. 1, 2010.

Mr. Kass said the group should be able to hit the timetable if the various public bodies "approve our plans on time." He said Continental and the Steelers hope to have the venue up and running within a year.

Continental was selected by the Steelers and the Pirates to develop the land between the two stadiums.

Mark Belko can be reached at or 412-263-1262.


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