Wilson Center future to be decided July 1

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Common Pleas Judge Lawrence O’Toole said he will rule on the sale of the bankrupt August Wilson Center for African American Culture by the end of the month.

Last month, O’Toole tentatively approved a sale to New York-based 980 Liberty Partners, pending an evaluation of the building’s structural ability to support a 200-suite luxury hotel the firm would build over the center. It bid $9.5 million for the bankrupt center.

While that bid is the only one that would pay off all the center’s creditors, including $7 million owned mortgage-holder Dollar Bank and the city’s Urban Redevelopment Authority, several arts groups, community activist, Pittsburgh Mayor Bill Peduto and Allegheny County Executive Rich Fitzgerald and the URA favor a bid half that size made by a group of local foundations, which has no clear plan for operating income or debt resolution.

To that end, after O’Toole gave 980 Partners 60 days to complete its engineering study, the URA cited covenants in the original funding agreements that forbid the use of the building for any purpose other than an African-American arts center and forbid any renovations without URA consent.

Dollar Bank immediately said the covenants don’t apply to the 980 Partners plan because the original agreements also gives the building’s owner the right to 500,000 square feet of air space above the center. The bank then told O’Toole it would foreclose on the building if the sale isn’t completed by June 30, which would likely render any covenants moot. But a prolonged legal battle could make the foreclosure more expensive.

Authority Board Chair and Peduto Chief of Staff Kevin Acklin said the public and foundations did not initially invest in a “hotel with an ancillary cultural center.”

During its June 12 meeting the board voted 4-1 to pay the law firm of Clark Hill Thorp Reed up to $60,000 to continue to fight the 980 Partners sale.

“We intend to keep it as a public trust,” he said.

Neither the city nor the county, however, has authorized funds to purchase the center.
State Sen. Jim Ferlo the one authority board member voting no, called the center a “bottomless pit.”
Fitzgerald agreed with Acklin and Peduto, saying the covenants should be enforced.

In addition to paying off the center’s creditors, 980 Partners’ local representative Matthew Shollar said its plan would also keep the center’s mission alive and would provide use of the theater and “significant gallery space” for at least 120 days of the year.

The center is $10 million in debt. It owes Dollar Bank more than $7 million, most of that for a mortgage on which the center never made a payment. The bank has also been under court order to cover the center’s insurance premiums, utilities, security and other costs until June 30.

On June 9, court-appointed receiver Judith K. Fitzgerald submitted expenses totaling more than $78,000 for herself, her counsel, and her financial consultant. Fitzgerald has also been granted a lien against the center in the event she is not paid.

(Send comments to cmorrow@newpittsburghcourier.com.)

 

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