Free The August Wilson Center

The ongoing saga of the bankruptcy sale of the August Wilson Center is an embarrassment to Pittsburgh and hearkens back to the bad old days of industrial city machine politics.  Except that the “machine” in this case is a quasi-government agency, the Urban Redevelopment Authority.  As Pittsburgh grows into an attractive investment location for private development, the value of the URA has diminished.  But the URA, instead of realizing that their admirable efforts in previous decades have helped make this possible, is instead using this particular case to block the Center’s recovery from initial missteps in a bid to preserve their political power.

As Dollar Bank has stated in its most recent court filing, a high rise tower of some sort was always contemplated as part of the overall development.  Early in my career life I was a banker on Wall Street, schooled in the logic of lending.  I can absolutely imagine Dollar Bank staff viewing their initial loan for the Center as an investment that would ultimately be taken out – that is, paid off – by proceeds from a more fully utilized development.  I suspect it was the faith Dollar Bank placed in the ultimate growth of the downtown market that led them to make this risky loan.

The URA has already “peed on its own shoes” as they in sales situations.  By making this overall process so difficult for Dollar Bank, I can say with confidence that no other credible financial institution will ever again enter into a lending situation where the URA is involved.  By reaching for a one-sided solution they have ensured their own demise.  Further, they are denying downtown Pittsburgh the chance for a new “luxury hotel” to be built.   Think of the possibilities. We know there is demand downtown for another 4 or 5-star hotel property given the success of The Fairmount Hotel.  Marriott’s Ritz Carlton brand as well as The Fairmount’s fellow Canadian chain The Four Seasons, have holes in their listing with no properties in Pittsburgh.  Either one of those or any number of others are a natural for that space.

But the worst indictment of the URA’s actions is the obvious abuse of public funds that are involved.  That’s taxpayers’ money they are playing with and Pittsburgh and Allegheny County taxpayers should be outraged given the many budget shortfalls still coming their way.  And as part of the URA’s plan, they want the Pittsburgh Foundation to chip in some millions of dollars; money that could be put to other uses not as attractive to private investors.  Sadly I believe there is not much to be done at this point other than let this soap opera play to the end.