Deer Creek Crossing court battles resume
PITTSBURGH: The next round of legal battles begins today in the costly and protracted war being waged against the proposed Deer Creek Crossing shopping mall in Harmar by environmental group PennFuture.
Texas-based developer Orix-Woodmont is seeking to build the $169 million shopping complex on 243 acres in the township owned by Pittsburgh businessman W. Duff McCrady. The property is bordered on the east by the Pennsylvania Turnpike and on the south by Route 28. It is bisected by Route 910.
Construction of the mall initially was slated to begin in spring 2000 and be completed this year.
But led by Harrisburg-based nonprofit organization Penn Future, the project’s detractors have used legal tactics to fight progress on Deer Creek Crossing on two fronts: environmental and economic.
In October 2002, PennFuture appealed a decision by the state Department of Environmental Protection to grant Orix-Woodmont a water obstruction and encroachment permit.
The permit would allow the developer to fill over about 6 acres of wetlands surrounding Deer Creek and build a culvert to channel about 330 feet of the stream in order to build the mall.
Trial begins today in Pittsburgh before the Pennsylvania Environmental Hearing Board to determine whether the DEP abused its discretion in issuing this project a wetlands permit.
The Environmental Hearing Board functions like a court to review DEP actions. It is comprised of five members, one of whom — administrative law Judge Thomas W. Renwand of Upper St. Clair — will preside over the Deer Creek Crossing case. The trial is scheduled to last for about four weeks.
Due to the volume of testimony and hundreds of exhibits that must be reviewed, Renwand’s opinion probably won’t be published until late winter or early spring 2004, according to his assistant counsel, Mary Anne Wesdock.
If the judge rules in favor of PennFuture, he either can revoke the permit or send it back to the DEP to take corrective action, Wesdock said.
Orix-Woodmont also has the right to appeal Renwand’s decision to the state Commonwealth Court, and possibly to the state Supreme Court, she said.
PennFuture alleges that Orix-Woodmont’s wetlands permit should be revoked because the DEP acted arbitrarily when it accepted the developer’s “alternatives analysis.”
This type of analysis is required whenever a developer seeks to disturb wetlands. The purpose is to prove to the DEP that an alternative site couldn’t be found that would accomplish the project’s same basic purpose with less environmental impact.
“The critical question is what is the basic purpose of that development and whether Woodmont could have build it elsewhere,” said Jody Rosenberg, senior attorney for PennFuture. “And it’s a rare incidence where there is no other alternative.”
Rosenberg said she will argue before the Environmental Hearing Board that Orix-Woodmont failed to present a clear and convincing alternatives analysis. In addition, Rosenberg will attack the methodology Orix-Woodmont used in ruling out alternative sites, which she said too narrowly defined the basic purpose of their project.
“Woodmont says they came to the Route 28 corridor directly because they wanted to build a 1.2 million-square-foot development there,” Rosenberg said. “But the idea that they wanted to do just this in this one particular place just isn’t true.”
The developer considered several commercial sites throughout suburban Pittsburgh, among them a tract of land in O’Hara across from the Waterworks Mall and sites in Monroeville and Robinson Township, Rosenberg said.
The potential ramifications of this case extend beyond just the proposed Deer Creek Crossing mall, Rosenberg said.
“If the Environmental Hearing Board recognizes that the wetlands on this piece of property need to be preserved, then any future plans on the property beyond what Woodmont wants to do would have to take that into account,” she said.
Stephen Coslik, chief executive officer of The Woodmont Co., said he doesn’t expect the wetlands permit to be revoked. According to a pre-hearing memorandum filed with the Environmental Hearing Board in August, attorneys for Orix-Woodmont will argue before Judge Renwand that the developer’s alternatives analysis was thorough and sound.
“We believe the (DEP) acted properly in conjunction with the issuance of the permit,” Coslik said. “Our permit is valid and in full force and effect, and that allows us to undertake any development associated with the site subject to the Township of Harmar and other governmental approval processes.”
But if, as Coslik contends, PennFuture’s challenge to the wetlands permit is not delaying construction, then why has Orix-Woodmont yet to break ground in Harmar?
This is the multi-million-dollar question officials in the township are struggling to answer.
Project faces lawsuit, too
In addition to challenging Orix-Woodmont’s wetlands permit, PennFuture also filed a lawsuit in state appeals court that challenges the tax diversion the developer intends to use to pay for road improvements needed for the mall.
Oral arguments in this case are scheduled to begin next Wednesday, Oct. 8, in Commonwealth Court in Pittsburgh.
Together with Allegheny Valley School District and Allegheny County, Harmar approved a $25 million tax increment financing plan, or TIF, to pay for a new interchange between Routes 28 and 910 and to expand and reroute Route 910.
Under the plan, a portion of the property tax dollars generated by the development over 20 years would be diverted to pay off county-issued bonds floated in 1999 to fund the road improvements.
If construction of Deer Creek Crossing had proceeded on schedule, Orix-Woodmont would’ve had about 17 years worth of new tax revenue to pay down its debt service.
But almost five years have ticked away on the 20-year TIF clock without any new tax dollars to divert — and there’s no sign of revenue pouring in soon.
Concerns about whether the TIF will generate an adequate revenue stream prompted the Harmar supervisors to hire a private consultant this summer to perform an economic analysis of the plan.
“We need to make sure that this development doesn’t turn into something that costs our residents money,” Harmar board chairman Robert Seibert Jr. said.
Coslik has yet to apply for a grading permit from the township or appear before Harmar’s planning commission and board with revised site plans for approval, both of which are required to move forward, Seibert said.
Developer: Planning has been the holdup
Making the preparations necessary to seek these additional permits and approvals is what is holding up Deer Creek Crossing, not the TIF lawsuit or the Environmental Hearing Board trial, according to Coslik.
“It’s just a very time-consuming project,” he said.
If Orix-Woodmont loses the challenge to its tax diversion agreement, Coslik has indicated that he has a substitute financing plan in place. But he refused to discuss what that might be on Monday with a reporter from the Valley News Dispatch.
“I call it the ‘Steve Coslik Big Secret Plan,'” Seibert said. “He tells you there’s an alternative, but he never tells you what it is. I suspect that it’s private placement of the bonds.”
Seibert said he is skeptical about Coslik’s insistence that litigation isn’t stalling Orix-Woodmont and would like to see the developer make a decision soon.
“If there is any delay in this project, I want to make it clear that the delay is not on the Harmar Township side,” he wrote in a recent township newsletter. “We have told the developers exactly what they need to do to get on the fast track, and they have failed to do it.”
This delay is hurting existing retail in the township, Seibert said.
If the Deer Creek Crossing project goes through, then Giant Eagle has indicated that it would move its store on Freeport Road into the mall. If the project fails, then the grocery store will likely expand into the vacant site of the former Ames Department Store next-door, according to Seibert.
But until Orix-Woodmont acts either way, the Ames storefront will remain empty, Seibert said.
“We’re currently in limbo because the developer is dragging his feet,” Seibert said. “We’d like to get a decision one way or another so we can move our township forward.”
Environmental Hearing Board trial
When: Starts today at 9:30 a.m. and is expected to continue for about four weeks. Call ahead for exact times and dates.
Where: State Office Building, Room 1507, 300 Liberty Ave., downtown Pittsburgh.
Commonwealth Court trial
When: Starts Wednesday, Oct. 8, 9:30 a.m.
Where: City-County Building, 8th floor, 414 Grant St., downtown Pittsburgh.