The Pittsburgh Penguins are learning a painful economic development lesson: The public trough sometimes isn’t the all-you-can-eat buffet they hoped it would be.
The venerable National Hockey League franchise announced last week that it was halting development of the 28-acre former Civic Arena site in the city’s Lower Hill District.
Why? Per Pens CEO David Morehouse, the process has become “increasingly impossible” because of the “changing demands and delays” of the city’s Urban Redevelopment Authority.
Of course, the Mighty ‘Guins were given a sweetheart deal to develop the tract once home to “The Igloo.” That, after an initial sweetheart deal diverted public dollars to build Mario Lemieux a new hockey arena across the street from the old arena. (Yes, friends, the gambling dollars used are “public dollars.”)
But now, as this billion-dollar development appeared to be finally gaining significant traction after a decade-long slog, self-anointed “stakeholders” in the project – those loath to allow a “beneficent” government intervention to go to waste in demanding their “fair share” – nitpicked to project suspension the latest “community benefits” part of the plan.
Indeed, the Penguins have invested significant time and capital into this project. But, in addition to being handed those development rights, they’re also beneficiaries of significant tax breaks.
And given the players in this development game, and past being prologue, the franchise cannot feign naivete. Why else would they hire a former top city and authority honcho to guide them through the bureaucracy?
But that said, it’s unlikely the Penguins will walk away from this project. And they and all the government-blessed “stakeholders” will, somehow, come to terms.
But this blip in the Lower Hill’s redevelopment saga hardly will be the last. The marketplace that this project wholly perverted faced significant operational challenges before the coronavirus pandemic hit – think new premium office space in a climate of already extraordinarily high top-notch office space vacancies — and the post-pandemic economic environment only adds multiple layers of new challenges.
The bottom line remains, however, that if the marketplace had been embraced instead of being “sweethearted,” and with a tangled mass of attached strings intermingled with spider and cob webs to boot, the Lower Hill redevelopment likely would be nearing completion, if not completed years before.
As we are wont to say in instances such as this, “Oh, what a tangled web we weave when first we practice to intercede.”
Colin
McNickle is communications and marketing director at the Allegheny Institute
for Public Policy (cmcnickle@alleghenyinstitute.org).
