PNC Financial Services Group sought and received permission from banking regulators to build a $170 million complex Downtown. But it doesn’t mean PNC is getting into the development business — just improving its neighborhood. So said PNC and analysts on Monday, after a bank regulator’s letter concerning the construction project raised some eyebrows. The bank sought a legal opinion from the Comptroller of the Currency last month before making its development plans official Dec. 19, PNC spokesman Brian Goerke said. PNC plans to invest $122 million of its own capital into a new complex adjacent to its headquarters Downtown on Fifth Avenue. It will consist of 158 hotel rooms, 32 condominiums and 360,000 square feet of office space, which is to be anchored by the Reed Smith law firm. “We don’t consider ourselves to be in the development business at all,” Goerke said. He said the office complex represents “a future expansion of our campus” and that PNC sought regulator approval to make sure it was “in sync with regulators.” “The residual effect is for the betterment of the core of Pittsburgh and hopefully a catalyst for further development of the Downtown core,” Goerke said. Regulators generally prohibit banks from acting as developers, rather than simply lenders, unless the bank will occupy at least half of the new space, “but it’s not a hard-and-fast rule,” said Kevin Muckri, a comptroller spokesman. (PNC workers are to fill about 25 percent of the office space.) Otherwise, such developments subject banks to economic swings that can put them on risky ground. “This project is not going to end up being a large percentage of PNC’s total portfolio,” said Gary Townsend, analyst for Friedman Billings Ramsey & Co., Arlington, Va. “The project allows for different types of occupancy, but it’s principally a bank building that will be occupied by a bank.”

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