Penguins Surrender $15 Million In New Civic Arena Site Deal

PITTSBURGH, PA - Pittsburgh officials and the Pittsburgh Penguins have reached an agreement that hopefully will jump-start the stalled development of the former Civic Arena site. The deal is expected to be approved Thursday by the city Urban Redevelopment Authority and the Sports & Exhibition Authority.

Under the agreement, a $15 million credit available for the team to purchase the 28-acre site is being eliminated. The Pens will get the property for free, but will be required to develop at least 6.45 acres by 2020. If they do not, the team will forfeit a third of the parking revenue currently being generated on the former arena site, with the money going toward a Hill District improvement fund.

The agreement calls for the entire arena site to be developed by 2025.

“This has been a complex negotiation, and we reached an agreement that makes the Option Agreement better for the public,” Mayor Bill Peduto said in a statement. “The Penguins agreed to eliminate the public’s obligation to pay $15 million, and we agreed to reasonable adjustments to allow more flexibility to deliver development on site that builds more affordable housing and creates substantial value for the middle and upper Hill District, and for the entire city.”

Pens president and CEO DAvid Morehouse said, “This agreement will pave the way for $750 million in private investment that will be truly transformative for Pittsburgh, creating a dynamic development that the region can be proud of – in addition to jobs, small business opportunities, affordable housing and community programs.”

The development will include over 1,000 residential units (20 percent of which will be affordable housing), 500,000 square feet of office space, and 250,000 square feet of entertainment and retail.

Infrastructure work on roads and utilities at the site is almost completed. The Penguins have retained major national developers McCormack Baron Salazar (retail) and Clayco (office), and have an agreement with a minority developer (for residential) that will be announced soon. The Penguins also are working on destination entertainment development and have worked with internationally-renowned BIG on an open-space plan.

Civic Arena file photo via Associated Press.