(PITTSBURGH) Nov. 6 Mayor Luke Ravenstahl announced today that the $5.25M Schenley Center Tax Increment Financing (TIF) note has been paid off, five years earlier than scheduled, and directed the Urban Redevelopment Authority (URA) to initiate action to formally dissolve the TIF district at their November board meeting.
In December 1997, a TIF district was created in order to partially fund a parking garage and site preparation activities for the Schenley Center project in Oakland. The 20-year TIF District and associated debt was originally scheduled to be paid off in 2017.
“This is a win-win for everyone and proof that Tax Increment Financing does work,” Ravenstahl said. “Now the taxing bodies will receive the entire tax increment five years early, property values have significantly increased and the number of jobs created by this project has exceeded our goals.”
Before the TIF, the Schenley Center parcels generated $1,531 annually in taxes to the City, County and School District. During the TIF, the taxing bodies received $204,336 annually. Now that the TIF debt has been paid off the taxing bodies will receive $612,232 annually in taxes.
In 1997, the properties were assessed at $56,800 and it was estimated that 110 new jobs would be created. Today, those properties are assessed at $20,132,600 and 180 full-time jobs have been created.
“I was involved in this project since its inception and applaud the Kossmans for their vision and high-quality development of this difficult site,” said Robert Rubinstein, URA acting executive director. “I can’t point to a better example of ‘but for the TIF, this project would not have occurred.’”
The project along Bigelow Boulevard was undertaken by Schenley Center Associates, L.P., a partnership of the Kossman Development Company. They constructed a 176-room Residence Inn extended-stay hotel, the 156-room Schenley Gardens Assisted Living Center with an Alzheimers unit, and a 273-space parking garage. The $42.2M project was constructed in 1998.
Due to extraordinary site preparation costs, and the need for structured parking in this high density development, TIF funding was used to help offset the funding gap. Some of the challenging site conditions included the construction of an emergency access drive to the rear of the assisted living center, and the construction of a foundation system, including soil retention walls.
The TIF note was repaid using 75 percent of the increased real estate tax increment realized by the three taxing bodies from the increased assessed value of the project.
Once its Board votes to dissolve the TIF district the URA will seek the approval of the three taxing bodies. The URA Board of Directors meets on Thurs., Nov. 8 at 2 p.m. in the URA offices at 200 Ross Street, Downtown.
Tuesday, November 6, 2012
Office of Mayor Luke Ravenstahl
512 City County Building | 414 Grant Street
Pittsburgh, PA 15219
telephone: 412-255-2626 | facsimile: 412-255-2687