When the Pittsburgh Penguins were negotiating with the city/state for a new arena during the years of 2006-2008, they made numerous promises in return for significant taxpayer money to build their new arena, now called PPG Paints Arena. According to the Penguins, the opportunities for economic development with their new arena were “limitless”.
Promises such as:
- A plan to “revitalize the area surrounding the team’s (arena)”.
- Creating “retail and office buildings along that edge” of the new arena.
- This new arena would be an “important catalyst for urban redevelopment”.
All that was left was how much taxpayer money would be involved. In 2001, the Pittsburgh Pirates paid just 18% of the construction costs for their new ballpark. The Penguins wanted this type of deal. Therefore, the city/state agreed to borrow $293.5 million (including $13 million annually in interest) for the construction of the new arena. Meanwhile, the Penguins only had to pay $8.5 million upfront.
Clearly, the city would want some sort of revenue stream from this new arena, right? Of course not:
“Under its lease, the Penguins, after expenses, will be able to keep all revenue from NHL games and other events, as well as concessions, the sale of luxury suites and premium seating, merchandise, novelties and programs, and the sponsorships and advertising.”
When the arena was being built, construction costs increased by $31 million. Unlike every other business in Pittsburgh or Pennsylvania, the Penguins were required to pay just $15 million of these expenses, while the state picked up $10 million and the city paid for the other $5.5 million.
Fast-forward to two years ago. How is that massive retail/office/housing developments coming along?
“The land immediately adjacent to PPG Paints Arena in Pittsburgh is currently large surface parking lots”
“Punch Bowl Social, a large restaurant, bar, and entertainment center, was announced as the first tenant of the Lower Hill project … but the company ended up filing for bankruptcy … On the other side of PPG Paints Arena, there are two large restaurant spaces — formerly occupied by TGI Fridays and Bufords — near the arena on the Uptown side that are currently looking for new tenants.”
So, pretty much nothing. In fact, not only has there been little economic development, but in 2015, the Penguins were reportedly considering whether to sell land around the arena or to take on investors, meaning additional money for the team owners. Remember, this land was given to them at the expense of taxpayers. If that had happened, which it didn’t thank goodness, shouldn’t the city and state have requested back their public subsidies?
Now let’s move to 2022. Surely, the Penguins have gotten their act together with redevelopment plans. Not quite. When the Penguins and their development team went in front of the city to request help building a music venue, a few things were missing. Such as any financing documents and a required plan for minority participation in the project.
As one city council member said hilariously:
“I could sit here and ask questions but we literally don’t have the answers to them,” Lavelle said.
The Penguins development team made a number of decisions last year:
- The entertainment venue will be smaller
- The retail and commercial space will be smaller
- A planned outdoor amphitheater was cancelled.
- An outdoor venue was also cancelled and now will be a six-story parking garage.
Now, let’s move to today. After years of being unprepared and/or doing little to actually change the area around the new arena, Penguins developers are demanding that a decision for a music venue must be made soon before, and let me get this straight, “international events destabilize economic calculations”.
In reality, they just want the city to approve this development so that they can receive tax breaks without the public being able to understand digest the news. I have written several times in the past about teams constantly needing their projects done quickly and out of public site.
But one community organization is asking a good question. Are the Penguins actually keeping to the community investment promises they made as part of a 2014 Community Collaboration and Implementation Plan? This plan, briefly, says that the Penguins developers will “address many community concerns” told to them by the local community.
When a developer for the Penguins and other team officials went in front of the city recently, zero concerns were addressed, and we found out some new things:
- The Penguins are keeping to their word. How? Well, they partially paid for a recreational development center to be updated and “further plans are underway”.
- Asking the Penguins to do more is “moving the goalposts” and is therefore looked upon as a new demand.
- Anyone who believes the Penguins should invest millions of dollars in a new local theater is “selfish” and “unrealistic”.
- When the CEO of a community organization reminded the developer about the community agreement, which the Penguins signed, requiring any development in this area to follow a number of conditions, the developer said that fulfillment of the promises were “in progress”.
It shouldn’t be a shock to anyone that these developers only care about making money and saving the Penguins from having to pay for anything. This year, when the city proposed adding a $2 surcharge to paid tickets to the proposed music venue to help finance the Greater Hill District Neighborhood Reinvestment Fund, the developers “balked” at it. They eventually agreed.
As one local newspaper wrote, the new arena “never became the cultural district the city envisioned”.