5 day forecast
URA approves Hazelwood TIF plans
Share with others:
The Pittsburgh Urban Redevelopment Authority board got the ball rolling Thursday for the largest piece of tax increment financing in the city's history -- an $80 million to $90 million package that would fund roads, utilities, parks and other public improvements for a proposed $900 million office and residential development in Hazelwood.
While URA board members unanimously approved preliminary plans for the funding in Hazelwood, some members criticized city council for holding up a $50 million TIF for a proposed $400 million to $500 million Buncher Co. development in the Strip District and wondered whether the Hazelwood package would suffer a similar fate.
The TIF must be approved by the city, the Pittsburgh Public Schools and Allegheny County.
"This is the beginning of a very long process," said URA board member Jim Ferlo, a Democratic state senator from Highland Park. "There are going to be a lot of hurdles, if not some significant roadblocks."
He questioned whether the URA and the mayor's office could get council to do for Hazelwood and Almono LP, the owner of the 178-acre site, what it wouldn't do for Buncher. Buncher on Tuesday announced that it no longer would seek the financing, which was being held up by councilman Patrick Dowd, who Mr. Ferlo called "Doctor No."
"As far as I'm concerned, this is going nowhere fast," he said.
The proposed Hazelwood TIF would lay the foundation for a proposed mixed use development on the former LTV coke works site, the last of the city's brownfields, that would feature more than 2 million square feet of office and research and development space and as many as 1,200 units of housing, either townhouses, condos or apartments.
Proponents see the development as a potential boost for Hazelwood, which has fallen on hard times since the closing of the coke works in 1997. "This is a terrific day for Hazelwood," URA board chairman Yarone Zober said.
The proposed TIF would be for 20 years, with 65 percent of the tax revenue generated by the development diverted to pay for the infrastructure. Tax increment financing works by earmarking a portion of the tax revenue produced by development to pay for infrastructure and other public improvements.
Don Smith, president of the Regional Industrial Development Corp., which is managing the site for Almono, said that Almono would not ask the city to guarantee any of the bonds used for the TIF. Instead, Almono would bear that responsibility itself and be on the hook in the event of a default.
Almono is a partnership made up of the Heinz Endowments and the Benedum Foundation and Strategic Regional Development Inc., which is affiliated with the Allegheny Conference on Community Development, and RIDC.
Mr. Smith said the Almono partners will make a loan to the project for infrastructure development that will be repaid by the TIF. He said the improvements, estimated at $140 million, will occur over a period of years because the site, the largest ever in line for a TIF, is too big to do it all at once.
Almono already has had talks with Carnegie Mellon University, which operates a robotic center at the site, and other universities and hospitals about potentially building at the site. It estimates that at full build out, the development could create 3,000 jobs and increase real estate tax revenue from $100,000 to $11 million.
Mr. Dowd predicted that the Hazelwood TIF would get a sympathetic ear before council if it specifically spells out what the money would be used for and if the improvements include public open space and riverfront access.
He said his objections to the Buncher TIF had to do with a lack of specifics about what the money would be used for -- beyond about $9.5 million in street and intersection improvements. He said the remaining $40.5 million were listed as "TBD."
"I have a funny feeling that will not be the case [with the Almono TIF], that the plan will have specifics," he said.
Contrary to Mr. Ferlo's characterization, Mr. Dowd said he has probably voted for 10 tax increment financing packages while on the school board or council and doesn't recall opposing one in a final vote.
Meanwhile, Councilman R. Daniel Lavelle, a URA board member, said that he is working on a plan for a smaller TIF, in the $9 million to $15 million range, for the Buncher project to fund street and riverfront improvements on the site.
First Published January 11, 2013 12:15 am
