Pittsburgh City Council, after a 50-minute debate on Wednesday, approved a $40 million bond issuance and an agreement with two city authorities to purchase and renovate a Downtown building that would serve as new headquarters for the authorities and several city departments.

The two resolutions passed 5-3 with one council member abstaining.

Council members Darlene Harris of Spring Hill, Deb Gross of Highland Park and Corey O’Connor of Swisshelm Park voted against the deal, saying they felt the cost was too high and the city was moving too quickly on buying 420 Boulevard of the Allies.

Councilwoman Theresa Kail-Smith of Westwood said she abstained because, “I didn’t feel comfortable with it just yet.”

A final vote is scheduled for Tuesday.

Gross urged council to postpone Wednesday’s vote until the public can offer input during a public hearing scheduled for Monday.

“It is a tremendous amount of money, which, again, may be a really excellent opportunity, but when we’ve been given only a week or so advance notice, and we haven’t had a public hearing, I think we should hold all this without giving approval until we hear from the public,” she said.

Gross said other, much larger Downtown buildings, have sold for less per square foot than what Pittsburgh would pay for the building.

Harris objected to the borrowing, noting that overwhelming debt 20 years ago nearly drove Pittsburgh into bankruptcy and was one of the reasons that Pennsylvania assumed fiscal oversight of the city under a state law known as Act 47.

“Pretty soon we’ll be in Act 47 again,” she said.

The city, Pittsburgh Urban Redevelopment Authority and the Housing Authority of the City of Pittsburgh are splitting the cost of purchasing the building and repaying the bonds. They would share joint ownership and intend to move offices sometime next year from their longtime home at 200 Ross Street, which they also own jointly. They plan to sell 200 Ross.

The URA previously approved the purchase. The housing authority board of directors has scheduled a vote for Tuesday.

Sam Ashbaugh, the city’s chief financial officer, said Pittsburgh council has approved fiscal policies that restrict annual debt repayment to 12 percent of the general fund budget. He said the city’s share of repaying the bonds would fall within that limit.

“I think it’s important to note that this is consistent with and well within our debt policy,” he said. “It will not affect the continued capital plan over the next six years.”

Robert Rubinstein, the URA’s executive director, said officials were aware that the building cost was higher than the price of other, larger, Downtown buildings that sold in recent years. He said comparisons were not fair because those buildings were either too large or did not meet city and authority requirements.

“This is the only building that we’ve identified with 10 years of due diligence and enhanced due diligence in the last three years that meets our needs,” he said.

M&J Wilkow, the Chicago firm that owns the building, recently completed an $11 million renovation and originally intended to lease it as office space. The building was most recently home to the Pittsburgh Art Institute.

Rubinstein said city officials negotiated an agreement that requires the three public agencies to take official action by Aug. 1.

Officials want to dump 200 Ross because the city has not maintained it for years. The building is a firetrap that does not comply with city building regulations and has chronically malfunctioning heating and cooling systems, broken down elevators and a dysfunctional floor plan prohibitive to providing public services, among other things.

“This is a substandard building, and we are a first-class city, and we have city workers who deserve first-class amenities, so I will be supporting this,” said Councilman Ricky Burgess of North Point Breeze.

Bob Bauder is a Tribune-Review staff writer. You can contact Bob at 412-765-2312, bbauder@tribweb.com or via Twitter @bobbauder.

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