$24M tax-increment financing plan sought for Summerset development

Developers of the last phase of a Squirrel Hill housing development are seeking approval of a $24 million tax-increment financing plan to complete the project.

The Urban Redevelopment Authority of Pittsburgh last week approved the TIF for the undeveloped portions of Summerset at Frick Park.

Allegheny County, Pittsburgh and the city school district must approve the TIF, which dedicates portions of the new tax revenue to help fund the development. Tax-increment financing can be a thorny issue because money that would otherwise be paid in taxes goes toward the project.

Since 2001, hundreds of houses have been built in two phases on a reclaimed 244-acre slag heap that overlooks the Parkway East near the Squirrel Hill Tunnel. The third and final phase could bring the total to more than 700 homes.

Craig Dunham, project manager for Summerset Land Development Associates, said that without the TIF, the final phase wouldn't be feasible.

“We have to build roads, build a bridge to get there, then grade the site, all new utilities. There's no possible way to sell a house for money that someone would buy it (without the TIF to help pay for the infrastructure),” Dunham said. “It's a public subsidy to create public infrastructure.”

High-end homes there can sell for upward of $650,000, according to the Summerset website.

URA board Chairman Yarone Zober, who is also Mayor Luke Ravenstahl's chief of staff, said the TIF is warranted because it is helping to build public areas that include trails.

“So far it's been a wonderful development that's brought people and a tax base to the city,” Zober said. “It's on a slag heap, and it costs them more to develop it than if they would have done it at a suburban site.”

The state's Redevelopment Assistance Capital Program gave $17.5 million earlier in the development. Summerset is seeking a 75 percent TIF on portions of the second phase and a 45 percent TIF on the third phase.

Dunham said the public's $24 million is half of the estimated $48 million to construct streets, trails and necessary utilities. The developer is picking up the remaining costs, he said.

County Council could consider the plan as early as next week. Dunham hopes to have approval from all three taxing bodies by July.

Bobby Kerlik is a staff writer for Trib Total Media. He can be reached at 412-320-7886 or bkerlik@tribweb.com.