Developers meet with Gainey administration over increased zoning review fees

PITTSBURGH (KDKA) — Times are tough for economic development and developers say the Gainey administration isn't making things any easier. 

The city is losing both jobs and population, but instead of welcoming business, developers say the mayor is putting up roadblocks, increasing project fees by more than 1,000 percent. On Friday they came to city hall to tell the mayor face-to-face.

About a dozen of the city's major developers descended on the mayor's office to try to negotiate a change in tone and policy -- starting with an astronomical increase in zoning review fees for major projects. 

As KDKA-TV first reported, the city is raising its zoning review fee on projects like Walnut Capital's plan to build apartment houses and a hotel across from UPMC Magee-Womens Hospital on Halket Street in Oakland. That fee would jump from $15,000 to $285,000, which the developer calls the highest in the nation. 

While only a small percentage of the total project cost, developers say they're struggling to get projects like it off the ground. With interest rates climbing, the economy slowing and a growing glut of office space, they say they need all the help they can get. In addition to the fees, they say they're faced with more restrictive zoning and requirements for affordable housing.

"We met with him about the fees and the broader economic development within the city of Pittsburgh," said Brandon Mendoza, the executive director of NAIOP Commercial Real Estate.    

About an hour later they reemerged saying while they did not reach a resolution, the mayor had an open ear to lowering the fees and to having more receptive policies toward development and they resolved to meet again.  

"What we have is an agreement on to go forward as to have this ongoing dialogue. Not just on the fees but on economic development in general," Mendoza said. 

"The mayor, to his credit, received us, heard from our group on some ideas and there's an agreement on a dialogue going forward," Mendoza added.

"Pittsburgh is open for business," said Maria Montaño, the mayor's press secretary. 

The city has said the fee increase is necessary to cover costs and the mayor has pushed the need for affordable housing in most residential projects but Montaño says there can be common ground. 

"We had a great meeting with the developers, with folks in affordable housing and market-rate housing," Montaño said. "It was very productive and we look forward to continuing this conversation moving forward."

But privately the developers say they want to see a greater shift in policy -- a more welcoming tone and incentives to bring jobs, business and development back to the city.