Friday, February 10, 2006
URA Advances Projects for Downtown, Hill District
PNC Likely a Slam Dunk
You’d think that a City in a state of financial distress and under the direction of a state oversight board would be sufficient to give some hesitancy to approving a project like Three PNC Plaza. You’d also think that the office and hotel vacancy rates in Downtown would be enough to stop it. You’d also think that the County’s talk about not supporting projects that move jobs from one location to another within the County would be enough to stop it. In fact, you’d think that the Pittsburgh Public School District’s situation—facing financial problems and the reality of finally closing schools to right size the district’s facilities—would be enough to stop it.
But none of these factors have come into play to stop the Three PNC Plaza project from moving ahead. The Urban Redevelopment Authority is ready to commence with a tax increment finance package of $18 million to help build the structure. If the City, County, and School District approve the plan, they will get a combined $1.1 million in real estate taxes while deferring $1.7 million to retire debt associated with the TIF. If the project were to be built privately, they would have gotten all of the tax money following completion. They wouldn’t be forced to use prevailing wage, which has inflated the cost of the project.
But remember that the state has promised to kick in $30 million as well. On Tuesday, City Council took action to allow the URA to apply for $16 million in Redevelopment Assistance Capital Funding (RACP) for the development. It is not clear where the balance will come from, but as our recent report (#06-01) noted, there is a long menu from which to choose. To be sure, PNC is no stranger to the RACP. After all, it was the funding source the state used to build PNC Park.
Much like the North Shore Connector, a project that defies all common sense, this PNC building is proceeding against every notion of good public policy.
You’d think that a City in a state of financial distress and under the direction of a state oversight board would be sufficient to give some hesitancy to approving a project like Three PNC Plaza. You’d also think that the office and hotel vacancy rates in Downtown would be enough to stop it. You’d also think that the County’s talk about not supporting projects that move jobs from one location to another within the County would be enough to stop it. In fact, you’d think that the Pittsburgh Public School District’s situation—facing financial problems and the reality of finally closing schools to right size the district’s facilities—would be enough to stop it.
But none of these factors have come into play to stop the Three PNC Plaza project from moving ahead. The Urban Redevelopment Authority is ready to commence with a tax increment finance package of $18 million to help build the structure. If the City, County, and School District approve the plan, they will get a combined $1.1 million in real estate taxes while deferring $1.7 million to retire debt associated with the TIF. If the project were to be built privately, they would have gotten all of the tax money following completion. They wouldn’t be forced to use prevailing wage, which has inflated the cost of the project.
But remember that the state has promised to kick in $30 million as well. On Tuesday, City Council took action to allow the URA to apply for $16 million in Redevelopment Assistance Capital Funding (RACP) for the development. It is not clear where the balance will come from, but as our recent report (#06-01) noted, there is a long menu from which to choose. To be sure, PNC is no stranger to the RACP. After all, it was the funding source the state used to build PNC Park.
Much like the North Shore Connector, a project that defies all common sense, this PNC building is proceeding against every notion of good public policy.
