Pittsburgh's Pirates and Steelers hope to increase revenue and reduce rent by developing the land between their new stadiums.
Sixteen acres of publicly owned land stretch along the Allegheny River between the location of the Pirates' $225 million PNC Park and the Steelers' $250 million stadium. The property is owned mostly by the Pittsburgh Stadium Authority, with some parcels owned by the city of Pittsburgh.
The deal is early in the discussion stages, but officials with the city and the teams say they are eager to make it work.
"Down the road, we will most likely have a plan to purchase the property," said Dick Freeman, chief operating officer for the Pirates. "We want it to be developed to stimulate our own businesses."
The development also could help the Pirates and Steelers reduce — and maybe eliminate — $150 million in rent they collectively owe the state.
When the Pennsylvania Legislature approved spending $75 million on each stadium, it attached a rent provision. The stadiums must generate at least $75 million in additional taxes over 30 years or the teams make up the difference.
Rent will be collected in 10-year intervals after the stadiums open. For example, by 2011 each stadium must have generated one-third of its total rent, or $25 million. If the stadiums have only generated $20 million in additional taxes, then the Steelers and Pirates must pay $5 million.
The tax revenue to be considered by the state includes state sales taxes, personal income taxes, liquor taxes and corporate net income taxes.
Paul Tufano, general counsel for Gov. Tom Ridge, has been reported as saying the teams don't get credit for new restaurants, hotels, shops or other commercial businesses on adjacent land. But a spokesman for Ridge said the teams may get credit if they are the developers.
"If it is part of the same facility contract, part of the complex, that would be a clear indication that it was connected with the tax agreement," said Steve Aaron, deputy press secretary for Ridge.
Freeman said the Pirates don't have specific plans for developing the land around PNC Park.
Officials with the Steelers have said they are interested in building a 5,000-seat outdoor amphitheater near where Three Rivers Stadium now stands. The amphitheater would be operated by Pace Entertainment of Houston.
Currently, neither team owns land along the riverfront known as the North Side, and several questions must be answered before the land can change hands.
The 16 acres between the stadium sites are owned by the stadium authority, but much of the site is parking lots leased to Alco Parking Inc.
"One thing we'll have to look at is buying out that lease," said Greg Yesko, spokesman for the Public Auditorium Authority. The auditorium authority was formed to implement "Plan B," which is the construction of the two stadiums plus expansion of a convention center.
Last Thursday, the stadium authority transferred its stadium construction contracts to the auditorium authority. Soon the stadium authority also will transfer its property titles.
Once the land is transferred, then the auditorium authority needs to determine whether the teams get a first shot at developing the property or the offer is made to developers, Yesko said.
