Commercial developers interested in former Mayview Hospital parcel

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The Aloe family may have made its fortune in mining and minerals -- members hold large interests in Imperial Coal Co., Shenango Inc. and Quality Aggregates, among others -- but it has also seen recent success developing business parks on reclaimed mine property through Imperial Land Co. in Findlay.

That latter experience is the motivation behind the family's bid to buy the former Mayview State Hospital property, according to consultant Dennis Regan.

"We looked at it, and saw the benefits of having parcel property with access to I-79, and a place quiet enough for light industrial and mixed-use commercial development," Mr. Regan said.

"Our plan for that property is exactly what's in our proposal."

That proposal, under the name Aloe Brothers LLC, calls for the site's redevelopment as a business park with parcels along existing roads and with substantial green space and the potential for trails linking Wingfield Pines in Upper St. Clair to Fairview Park in South Fayette.

Aloe Brothers bid $505,505 for the 170-acre property. The only other bid received by the Mayview Land Reuse Task Force was for $130,000 from a Washington County developer.

The state closed Mayview, which served those with mental health issues, at the end of 2008, and created the task force to help make sure the property was reused properly. Mental health care advocates have throughout the process been pushing the state to maximize profit and put the money toward the care of those who would have been served by the hospital had it stayed open.

At the task force meeting last week, several speakers expressed disappointment in the small amounts bid, given the property's location. It is in South Fayette on a curve in Chartiers Creek, surrounded on three sides by Upper St. Clair.

But the hospital's 39 buildings range in age from 50 to more than 100 years old, they were purpose-built for hospital functions and many contain large amounts of asbestos. An extensive appraisal set the value of the land itself at $7.8 million -- almost $50,000 per acre -- but said it would take $13 million to raze and/or remediate the buildings, leaving an actual value of negative-$5.2 million.

Task force officials said they kept the appraisal confidential and had commercial real estate firm CB Richard Ellis do a nationwide marketing campaign to look for bidders. The idea was not to let the negative appraisal affect the bids.

After all that, "this is what we got," said John Paul Jones, a state official representing the Department of General Services.

Since the bidding process was new for the state, legislation would need to be passed before the bid could be accepted. The offer is good for 90 days.

The other primary question raised at the task force meeting concerned mineral rights. There is a coal mine on the property that once fed the hospital's boilers; it was abandoned in the early 1960s.

And with several companies roaming Pennsylvania looking for places to drill for natural gas from the Marcellus shale formation, that is a possibility for almost any substantial parcel.

There were two attitudes toward that question.

Several mental health care advocates said that if there is money be made mining or drilling, the state should mine and drill and turn the money over for mental health care.

Mr. Jones, however, noted that with wetlands along the creek, the Upper St. Clair recreation complex on the other side of the creek, Fairview Park nearby, residential areas within earshot and limited roads, "drilling would be a touchy subject. ... It's not just about money; there are impacts to things as well."

State Sen. John Pippy, R-Moon, who co-chaired the task force, was more blunt and emphatic.

"The potential of putting a Marcellus shale drilling rig here is zero," he said. "We would fight that all the way."

Mr. Jones added that as with most state land transactions, this deal would only be for surface rights; the state would retain the mineral rights.

That does not, however, mean that mining or drilling is impossible. The state often leases park land and forest land for drilling operations in particular, generally asking for in-kind work in lieu of royalties on the gas extracted.

"Why would the state retain the mineral rights and not profit from them?" health care advocate Sally Jo Snyder asked.

Mr. Pippy said he would look into the question.

"We don't have an extraction fee in place, but with the Marcellus shale being the way it is we might want to get one," he said.

Mr. Regan said a confidentiality agreement prevented him from divulging any detail on Aloe Brothers' plans beyond what is in the proposal, but said the company intends to work closely with all concerned.

"We know what Mayview was, and we understand the situation," he said. "We understand the concerns of the two communities. We understand the concerns of the mental health community. We want to be good community partners, going in whatever direction we can to bring economic development to the area."

Mr. Regan was director of operations for Pittsburgh Mayor Bob O'Connor and public safety director under Luke Ravenstahl before resigning in December 2006 amid a controversy about police discipline. Mr. Regan, who noted that an investigation cleared him of any wrong-doing in the case, said he has been serving as a private consultant since.

Mark Aloe, who is partnering with his brother David in Aloe Brothers, was chief financial officer for Cranberry-based Pacesetter Corp., which went bankrupt in 2005, and was briefly chairman of Berne University, a St. Kitts-based online university that failed to get U.S. accreditation.

Brian David: or 412-722-0086.


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