The news headline read "Penguins on the Clock for Civic Arena Site". The article is referencing the development project on the 28-acre site that the team "won" in a 2007 agreement with the Sports and Exhibition Authority (SEA). The team negotiated the development rights to the publically owned property without any competition from private developers who may have been willing to pay for those possibly very valuable rights.
Not only will taxpayers not see a dime from the sale of the property, all indications are that the area will ask for and receive tax increment financing (TIF) to put in the necessary infrastructure. A TIF for the project will divert any property taxes generated by the development to pay off the bonds floated for the infrastructure work and other costs covered by the TIF plan. In a City strapped for cash and constantly complaining about a shrinking tax base, here is a wasted opportunity to get much needed tax revenue.
Supporters will be quick to point out that the project, likely a mixed-use development of office, retail and residential, will bring in jobs. But what type of jobs and are they net new jobs? Any construction jobs will be over once the project is completed. One rumor has US Steel building a campus like corporate headquarters on the site. These jobs will be merely transferred a couple hundred yards from their current Grant Street location-not much of a benefit to the City. As we have pointed out many times before, using TIFs for retail is a very bad idea-one for which the City has experience in the form of the defunct Lazarus department store. Retail jobs just move activity from one part of the City to another and benefit those retailers who get them at the expense of those who don’t.
Finally, planners are salivating at the chance to develop these 28 acres the "right way". That is, they want to direct what type of mix will go in, instead of letting the private market determine the best use. If the past is any indication, the success of this project will be suspect. Developments that led to the Civic Arena and East Liberty circle a half a century ago have admittedly been mistakes and are now being cleared. Can Allegheny Center Mall or the new Lazarus be far behind? As for the present, one needs to look no further than the proposed grocery store in the Hill District to see how well that has gone-nearly four years of planning and talking and still no grocery.
The team has a deadline to start development and ten years to finish. It seems the Penguins, after getting a new, glitzy and very profitable and non-taxpaying arena at very little cost to themselves, are lined up for more largesse from the taxpayers.
