A Beer Summit: Mayor Peduto, Mario Lemieux Spurred Penguins’ Hill Development

“He made it known he wasn’t happy with some of my comments in the paper.”

City of Pittsburgh Mayor Bill Peduto smiled broadly as he recounted his suprise October meeting with Penguins owner and Hockey Hall of Famer Mario Lemieux over beers at the Shadyside hangout — and awesome little dive bar — Cappy’s.

The Cappy’s get-together between Peduto and members of the Penguins organization was part of a series of meetings to spur development of the Forbes Avenue property adjacent to PPG Paints Arena, currently owned by the Penguins as part of the 2007 arena deal which kept the team in Pittsburgh.

Previous to last year’s productive meeting, the Penguins and the city had been at odds over the Penguins’ development of that land, or lack thereof.

“When I walked in (to Cappy’s), I noticed there were four people at the table. I realized the uninvited guest was Mario Lemieux,” said Peduto, also a Penguins season-ticket holder.

“I reminded him sometimes you have to throw an elbow,” Peduto said with a mischevious smile. “He said, ‘I can throw an elbow, too’. And I just said, wow, threatened by the great,” Peduto laughed.

Currently, the former Civic/Mellon Arena site is an assortment of parking lots, which creates a profit for the Penguins but does little to spur economic growth to one of the most predominantly minority neighborhoods in the city, the Hill District. The Penguins have controlled the property since 2007.

In December, not long after Peduto and Lemieux traded elbows and beer, the two sides announced a new agreement which includes 935 residential units on the former arena site. First-phase plans are to break ground in November for a mix of affordable and market-rate housing, built by St. Louis based developer McCormack Baron Salazar. The second phase is scheduled to include 450 market-rate units.

Under the new agreement, the Penguins have until 2023 to develop nearly 11 acres of the 28-acre site or will lose 40 percent of the parking revenues generated. The Penguins and the city also agreed to waive the Penguins’ $15 million credit to buy the parcels of land, and instead, the Penguins will receive them for free. Had the original deal stood, the city could have been forced to pay the Penguins cash for credits left over from the property sales.

In a robust conversation with Pittsburgh Hockey Now, which started with hockey chatter and economics of playoff games, the mayor explained in great detail the city’s hopeful expansion and development of the upper, middle and lower Hill District.

A “wedding cake” three-tiered approach is how Peduto described it. The upper Hill District and the middle area, around the old arena site, are supposed to lead the way. Housing, with “an affordable-housing component” should be complete on the upper Hill within three years, Peduto said. The housing will consist of shorter buildings, according to the Mayor, in order to maintain Pittsburgh’s skyline and views.

The city is still working on the financing packages and low-income tax credits for developers, in addition to infrastructure plans. Peduto conceded some of the development will be consumer-driven. In other words, venues will be built to suit demand, not to create it. Which means a vibrant entertainment district, despite the best-laid plans, could be the driver of the redevelopment.

The city needs the Penguins to spur the entertainment district around the arena. With all due respect to Shale’s, Buford’s Kitchen and the Souper Bowl, those are three small bars and rarely destination stops for entertainment dollars.

“We’ve already been in discussion with (the Penguins) to simultaneously see the entertainment be built during that same time frame,” Peduto said.

Taller buildings with office space and retail are slated for the lower Hill, to blend with the current city skyline. However, that timeline is 10 years away.

The city and Penguins also agreed to specifically include a minority-owned contractor to build at least 250 of the housing units on the former Civic Arena site. The Penguins selected Intergen Real Estate Group, a group of local contractors who formed specifically for the Civic Arena project.

Before the Civic Arena separated the Hill District from Downtown Pittsburgh, the Hill was a stop for the greatest Blues and Jazz musicians of the 1950s. It was the epicenter of Black culture. Pittsburgh’s halfway position between Motown (Detroit) and New York City made it the perfect stop for musicians like Ella Fitzgerald and Duke Ellington. The Hill District earned the nickname ‘The Crossroads of the World.’

But after the Civic Arena opened in 1961, the Hill District was cut off from Downtown. Its economy withered. An estimated 40 percent of Hill District residents now live in poverty. Simple things, like attracting a grocery store, proved difficult. Part of the mayor’s infrastructure plan calls for re-connecting the Hill District with the highways.

Hill District development and creating a more vibrant Fifth and Forbes corridor have been on the wish list for several mayoral administrations. In 2002, former Pittsburgh mayor Tom Murphy considered invoking eminent domain and sought developers to revitalize the arena area.

The Penguins have until 2023 to complete the work on the Civic Arena site.

The Penguins organization did confirm the Mayor’s broad outline, but as a matter of organizational policy declined to provide additional information regarding the development, until the team has news or an official announcement. Additional information was obtained from previous news sources and public forums. Pittsburgh Hockey Now will have additional civic stories from our conversation with the mayor, during the next couple weeks.