$10M in tax incentives OK'd for ex-Nabisco site
Pittsburgh City Council on Wednesday gave preliminary approval to a $10 million tax-incentive package for the Bakery Square project in East Liberty.
A unanimous vote on two bills authorizing tax increment financing to support the $113 million development along Penn Avenue paves the way for a final vote to be taken Monday.
Walnut Capital Partners of Shadyside hopes to convert the former Nabisco bakery on Penn Avenue into a retail, office and residential development. The project has been tied up in a debate over whether a 120-room hotel would benefit from the tax break.
The developer and the city's Urban Redevelopment Authority have said the hotel, which will be built using "air rights" above one parcel of the development, is not part of the financing plan.
That is disputed by Unite Here, a union representing area hotel and restaurant workers, and some members of City Council.
If the hotel is included in the tax break financing, it would be subject to a city ordinance requiring Walnut Capital to agree to take a neutral stance in any attempt by the union to organize hotel workers.
"The city law department has determined that the hotel is separate from the special financing and that Walnut Capital is not required to follow the city code," Councilman Bill Peduto said after the session.
During the meeting, the financial plan was approved without comment.
Council's action is "disappointing" to United Here, said Sam Williamson, its spokesman. "We will continue to talk to council members about this issue."
The union has yet to decide on what action it may take next, if any, he said.
Tax-increment financing allows the property tax dollars generated by a development to be used to pay off bonds issued for construction of items such as roads, sewer and other improvements to support development projects.
Councilman Len Bodack had raised concerns about approving the tax break in November, and council on Dec. 6 voted to delay the preliminary vote until yesterday.
Bodack has said he believes the financing applies to the hotel, and thus subjects it to the city law.
The ordinance in question was approved in 1999. At that time, another dispute arose over union representation at another hotel, the Pittsburgh Renaissance, which opened in 2001 in the renovated Fulton Building, Downtown. The ordinance requires hospitality operations, receiving a city tax break, to reach a so-called "neutrality agreement" with a union trying to organize workers.
It also requires the union agree not to strike, picket or boycott during the length of any such agreement.
Walnut Capital already has started work at the former Nabisco site, demolishing a portion of the complex and starting to renovate the remaining structure.
