Developers say Mayor Ed Gainey's office throws up roadblocks to economic growth
PITTSBURGH (KDKA) — At a time when the city is losing jobs and population, could the Gainey administration be seen as throwing up roadblocks to economic development?
KDKA-TV's Andy Sheehan spoke with developers who said the city's sending out the wrong message, raising fees and making it harder to put shovels in the ground.
Faced with rising interest rates and a slowdown in the local economy, Walnut Capital has scaled back its ambitious Oakland Crossings development. But Walnut Capital still wants to move forward with transforming a city block into a hotel and apartment building and has been looking to the city for help.
"It's difficult out there," said Todd Reidbord of Walnut Capital. "The markets are tough, the office markets are tough, the interest rates are difficult and this is a time when government really needs to step to the plate and encourage development."
But instead, the Gainey Administration is slapping developers with much higher fees. The price for Walnut to get a zoning review from the city has jumped from $15,000 to $255,00, an increase of nearly 600 percent. And that's just one of more than a half-dozen other city reviews it will need.
Sheehan: "Is it the right message to be sending out when we're losing population and jobs in the city?"
Jonathan Kamin: Not only it's it the wrong messages, it's illegal."
Kamin, Walnut's attorney, said he got no response after sending the city a letter demanding the fees be rolled back, saying they violate Pennsylvania law by exceeding the city's actual costs of review and will stymie all development in the city.
Millcraft Development says it will be paying in excess of $400,000 for a zoning review of its proposed Esplanade North Shore redevelopment project.
"Everybody is getting sucker punched the same way by these fees," Kamin said.
"We're talking about fractions of overall project value that this city is charging for a fee," said Maria Montano, the mayor's press secretary.
In reviewing its old fee schedule, the city says it found it was actually losing money in its review process. By increasing the fees, Montano says the city will increase its efficiency and speed up the reviews and actually help foster development.
"Pittsburgh is open for business," Montano said. "We want folks to come here, we want more businesses here, we want more development here. But what the city also needs to do is ensure we have the capacity and the staff to go through the changes on an efficient process."
The developers don't see it that way.
"We expect to have to file a suit in the near future because this is an illegal act by the city, and it's essentially putting all development stuck in the mud," Kamin said.
But instead of working together, it appears both sides will be squaring off in court, putting projects on hold for the foreseeable future