In a high-stakes game of "king of the hill," Mayor Tom Murphy is facing off against the University of Pittsburgh, with time working against him.

	V.W.H. Campbell, Post-Gazette Mayor Tom Murphy at the Oak Hill site, once the crime-plagued Allequippa Terrace. Click photo for larger image.

The mayor is pushing a $49 million plan crafted by Boston-based developer Beacon/Corcoran Jennison to build 200 homes and renovate a community center in the partially revitalized Oak Hill neighborhood, once a public housing slum.

But Pitt wants the 15-acre site for athletic facilities, and is currently outbidding the Murphy-backed developer.

"I've always felt a deep emotional and personal commitment to the tenants to complete this," Murphy said yesterday, as he drove through the 639 homes built in the first phase of Oak Hill, completed in 2003.

"I believe there's a legal commitment to build this development out," he added, since the developer signed on for a full redevelopment.

The university's plan "provides much-needed funding to the [Pittsburgh] Housing Authority," which currently owns the land, countered Robert HIll, Pitt's vice chancellor for public affairs. "The [developer's] financing plan is not a good deal for the city of Pittsburgh, not a good deal for the residents and leaves people wondering why the city is fast-tracking a plan the city can't afford."

Beacon/Corcoran Jennison's financing plan includes $8 million in tax credits from the Pennsylvania Housing Finance Agency, said Miles Byrne, the developer's Oak Hill project director.

Applications to the agency, including complete budgets, are due in October, Byrne said. If that deadline is missed, the next deadline is in the spring, he added, when some people "aren't going to be at the table."

Murphy, for instance, leaves office at year's end.

"If we don't get a tax credit application in by October, this deal is in big trouble," said Byrne.

Beacon/Corcoran Jennison built and manages the existing townhouses and apartments at Oak Hill. It wants to add 48 public housing units, 50 rental apartments and 102 for-sale townhouses and condos.

It would later build another 250-home phase, said Byrne, bringing the neighborhood's total to nearly 1,100. That's still shy of the 1,700 units -- all public housing -- that stood there when it was crime-plagued Allequippa Terrace.

The developer's financing plan includes $20 million from selling homes.

Another piece involves transforming 99 public housing units, renovated a few years ago, into market-rate apartments. The developer plans to borrow against future rents to finance new construction, Byrne said.

About half of those units are now occupied. Beacon/Corcoran Jennison plans to move those families into the 48 proposed new public housing homes.

An internal housing authority analysis obtained by the Pittsburgh Post-Gazette last week suggested that a proposed $9 million contribution by the authority was out of sync with what it characterized as $5 million in developer profit.

Byrne said the $9 million is money the authority previously loaned the developer, has since been partly repaid, and was always slated for reinvestment in Oak Hill.

He said Beacon/Corcoran Jennison's profits will likely be $2 million, plus $1 million in fees for services. Housing authority officials could not be reached.

The developer would pay the housing authority $2.5 million for the land and spend another $3.6 million for renovation and staffing of the Wadsworth Hall recreation center.

Hill said Pitt offered the authority $3.5 million for the land. He said Pitt's plan would cost the city and authority nothing, freeing up the authority's $9 million for improvements to Oak Hill.

Pitt wants to build facilities for varsity and intramural baseball, softball, soccer and track on the site, said Hill. It would continue its policy of providing many Oak Hill residents with access to its facilities when they are not otherwise in use, he said.

The competition between the proposals is spawning bitterness between the contestants.

"I have not appreciated Pitt's efforts to use political muscle to influence the decision," said Murphy.

"They've had Sen. [Rick] Santorum calling board members and the director of the housing authority, and the governor called me [asking] why can't Pitt have this land."

Hill called Beacon/Corcoran Jennison "out-of-towners" who "are coming here primarily for the purpose of making a profit, building equity, and taking it back to Massachusetts."

Hill suggested that major decisions on the site be deferred until Murphy leaves office. "When new leadership is elected, and there's a new mayor, the new administration ought to be able to determine its own housing policy," he said.