Wednesday, May 10, 2006

Council clears way for PNC tower work to begin. I would have raised questions and voted NO

When I ran for city council -- just months ago -- I mentioned this tax break for PNC many times. I always talked about it. Meanwhile, the others on the campaign trail generally did not -- except for two others.

Jeff Kock, the eventual winner of the race, never mentioned tax breaks. He didn't have much to say about how the city council people always vote to give away our public money to big projects that fail to help the city and fail to make good financial sense.

Jeff Kock must have been told how to vote on this tax break by others -- such as the mayor.

I'd love to lobby new Mayor, Bob O'Connor, and get him to VETO the TIF to PNC. It is something that was hatched by Tom Murphy and Ed Rendell. The state (Pennsylvania) already gave PNC $30-million for this same building. That was a 'grant' and that is also illegal, but that is another story.

O'Connor won't veto this building.

Build the darn building -- but do it on its own merits with its own money -- not taxpayer funding.

The PNC Plaza is getting more than $1-million per floor. The citizens and taxpayers are getting robbed.

Council clears way for PNC tower work to begin City Council gave final approval to an $18 million subsidy for a new PNC Financial Services Group tower planned for Fifth Avenue.
I would NOT have voted to provide this Tax Break to the rich corporation. I would have voted to protect the taxpayer money -- not give it away. I would have voted to keep the funding in the schools, not help the profits of a downtown based business.

Furthermore, I would have been on council giving serious questions to those on the URA, the mayor's office, PNC, and others about this deal. I would have attacked the reasoning from every angle. I would have made a case as to how the $18-million could have been spent in other ways.

I worry -- why do we give money to build a hotel downtown when places like The Hilton -- are not performing as they need to perform. And, why undercut that long-time business with a subsidy to bring in another competitor. Next up -- see more requests for money to be spent on hotels downtown to prop up the others.

When things are not fair -- people walk away. The Hilton, Doubletree, Mariott, Wm. Penn and others from downtown to South Side to North Side -- can all smell the foul stentch of bad deals.

City Council Member Bill Peduto voted no on the deal. He was the only one. Good for Peduto. But, Peduto endorsed Bruce Kraus in the city council race I was in recently. Kraus would have voted WITH the TAXBREAK and NOT with Peduto. Kraus is all about doing big corporate welfare deals too. Kraus is a Chamber guy. Kraus would not have stood with Peduto in opposition on things that really mattered.


Anonymous said...

Council clears way for PNC tower work to begin

Wednesday, May 10, 2006
By Mark Belko and Rich Lord, Pittsburgh Post-Gazette

One effort to revitalize the downtrodden Fifth and Forbes corridor, Downtown, advanced yesterday, while the number of developers interested in other projects fell to two with the pullout of a national company.

City Council gave final approval to an $18 million subsidy for a new PNC Financial Services Group tower planned for Fifth Avenue.

Its action allows PNC to begin demolition of 13 buildings along the north side of Fifth, from Wood Street to Liberty Avenue, in July to make way for Three PNC Plaza, the city's first new skyscraper in almost two decades.

PNC and city officials are hoping the new building, which will house the Reed Smith law firm, a 150-room luxury hotel, and 30 or so top-floor condominiums, will help to jump-start the redevelopment of the corridor.

The approval of the $18 million in tax increment financing will allow the city's Urban Redevelopment Authority to borrow the money, and the city, Allegheny County and Pittsburgh Public Schools will forego most of the new taxes on the tower to pay off the debt. The county and school district have already approved the plan.

The state will provide another $30 million toward the $169.5 million project.

Only Councilman William Peduto opposed the plan. He has said PNC doesn't need the help.

PNC plans to begin "de-constructing" the buildings that will be demolished within the next month. A local contractor will be removing doors, fixtures, finishes, plumbing, moldings and other building parts for recycling before tearing down the structures.

Gary Saulson, PNC director of corporate real estate, said the financial institution took the same approach in demolishing the city's old Public Safety Building a couple of years ago. In that project, 98 percent of all building materials ended up being recycled.

The few tenants still in PNC-owned buildings to be torn down have been working under month-to-month leases and will be notified immediately that the company does not intend to renew them, Mr. Saulson said.

"We will work with them to provide some kind of orderly transition out of the space," he said.

PNC hopes to have the 23-story office tower completed in 2008 in time for the celebration of Pittsburgh's 250th birthday.

The project was advanced on the same day the city learned that Washington, D.C., developer Madison Marquette no longer was interested in redeveloping nearly 20 city-owned structures in the corridor.

Madison Marquette founder and Chief Executive Officer Amer Hammour notified city URA Executive Director Jerome Dettore of the decision in a telephone call yesterday. Mr. Hammour tied the decision in part to a recent reorganization by the firm.

"Madison Marquette had big plans for the corridor six months ago, but its interest appeared to wane more recently. Mayor Bob O'Connor balked at the $24 million in public subsidies the firm wanted for its proposed $50 million to $60 million residential and retail complex on lower Fifth, that would have included the old G.C. Murphy's store.

It wanted to build 150 to 200 for-rent apartments and bring in upscale retailers like Crate and Barrel and Tiffany & Co. to attract shoppers.

Mr. O'Connor refused, however, to give the company exclusive rights to redevelop city owned properties, choosing instead to open the competition to other developers.

The decision leaves two local developers -- Millcraft Industries Inc. of Washington County and Ralph Falbo Inc. of Downtown -- in the running to redevelop nearly 20 city-owned buildings in the corridor, including Murphy's.

With the local interest in Fifth and Forbes, the loss of Madison Marquette "doesn't faze us at all," Mr. O'Connor said.

"I think [Madison Marquette] looked at the competition and probably realized they were up against some very stiff competition," he said.

Millcraft Industries, which is engaged in a $52 million redevelopment of the former Lazarus-Macy's store, is proposing $217 million in work involving 45,000 square feet of offices, 200,000 square feet of retail space, and 805 residences.

Mr. Falbo, who is developing the 151 First Side condominium tower under construction on Fort Pitt Boulevard, is pitching a $90 million project that would include a marketplace and a 280-unit residential high-rise on Forbes, and creation of a destination-type outlet for diamond wholesalers and retailers.

The mayor said there is a possibility that other developers could become involved before he makes his selection by the end of the month.

Madison Marquette is the fourth national developer to pass on redeveloping Fifth and Forbes, a once-thriving corridor.

It follows two Philadelphia developers, Carl Dranoff and Kravco Co., and Chicago developer Urban Retail Properties out of town. All were recruited by former Mayor Tom Murphy.

Mr. Dettore said he doesn't see the latest pullout as another blow to the corridor.

"Frankly, I don't see any great impact. We have two very interested and committed and enthusiastic developers. Things are happening there already," he said.

(Mark Belko can be reached at or 412-263-1262. Rich Lord can be reached at or 412-263-1542. )

Anonymous said...

PNC does not need the tax break and why do we continue to provide sweetheart deals to those who don't need them? I guess that is what happens when you have one party control over a government. Wake up Pittsburgh!

As a state representitive, Mark, I'd examine enacting laws that prohibit TIF's by distressed munis or cities...since this is money that the city could use.

Mark Rauterkus said...

Who are you?

I'd like to see all TIF laws NUKED from the tool box. Tax breaks for one hurt the kids mostly -- and they also poison the marketplace.

At the least, let's call for a 10 year no TAX ABATEMENT calmming period -- to be associated with a serious accounting and accountability study to prove how much or how little the tax breaks in the past have helped or hurt.

Anonymous said...

Maybe he is a mysterious state rep candidate lurking in the shadows...

Anonymous said...

Laurel: To Bill Peduto. He was the sole dissenting vote when Pittsburgh City Council this week voted to aid and abet the molestation of taxpayers to help PNC build its new Three PNC Plaza skyscraper Downtown. The banking giant, with profits of $1.3 billion last year, doesn't need the help, Mr. Peduto said. How sad it is that out of nine council members, only one appears to have such fiscal sanity.