Pittsburgh settles court battle over Penn Plaza Apartments

The City of Pittsburgh and a Downtown realty company settled a long-running legal battle Friday over an East Liberty apartment complex with a deal designed to fund low-income housing, rehabilitate a parklet and bring another high-end development to the neighborhood.

The city, LG Realty Advisors and four civic groups spent more than 1,000 hours arguing in court over the fate of land along Penn Avenue that once housed the now-demolished Penn Plaza Apartments, according to the Pittsburgh Mayor's Office.

“All litigation is settled, and we are moving forward,” said Downtown attorney Jonathan Kamin, who represents LG Realty.

Pennley Park South, a subsidiary of LG Realty, had planned a $150 million mixed development including a Whole Foods grocery store, a parking garage, offices and about 400 apartments.

About 200 residents, many of whom were classified as low-income, were displaced last year when the complex closed.

The company has scaled back and now plans a two-phase development, including offices and stores with underground parking instead of a garage, according to Pittsburgh Solicitor Lourdes Sanchez Ridge. Original plans called for up to 200 apartments.

“The community groups, the developer and the city, we all compromised,” Sanchez Ridge said.

LG Realty has agreed to dedicate 50 percent of increased tax revenue generated by the project over a set period into a fund to finance housing that's affordable for low-wage earners.

It will use the remaining 50 percent for infrastructure and landscape improvements in and around the development.

Mayor Bill Peduto said the fund should provide enough housing to accommodate all of the displaced Penn Plaza residents.

“We'll be developing more affordable housing through this development fund than existed at Penn Plaza,” the mayor said. “More people who need housing will be given it in East Liberty in a one-mile proximity to (Penn Plaza).”

The new development is expected to generate millions in tax revenue.

More than $2 million will be dedicated to affordable housing and up to $1 million for Enright Parklet next to Penn Plaza, according to the agreement.

The new park will consist of 2.28 acres and be designed by the city with input from residents. Sanchez Ridge said the city is planning a series of community meetings for residents to discuss the park.

“The community along with the city are going to get together and (will) be the designers of the park,” Sanchez Ridge said.

Neighbors and affordable housing activists have opposed the development, saying it would diminish the popular parklet.

They also complained the Penn Plaza development displaced poor residents who have limited options to relocate and further gentrifies East Liberty, the site of much high-end development in recent years.

Rents in the neighborhood reach as high as $3,000 per month.

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