By Mark Belko / Pittsburgh Post-Gazette
The Allegheny Regional Asset District served as the rich uncle Monday to three local foundations in their $8.49 million deal to buy the August Wilson Center for African American Culture.
Asset District board members, in a 6-0 vote with one abstention, approved a $1.5 million grant to help the Pittsburgh Foundation, the Heinz Endowments and the Richard King Mellon Foundation buy the Downtown building.
The grant represents part of the $3.15 million in public funds going into the transaction. The city’s Urban Redevelopment Authority is contributing $1.65 million.
In voting to approve the grant, Dan Griffin, board vice chairman, said the foundations’ ownership “gives us comfort” that the center won’t repeat the mistakes of the past that led to millions of dollars of debt and a default on its $7.9 million mortgage.
He said the asset district contribution was justified given that more than $30 million in public and foundation money was poured into the building’s construction. “I kind of felt it was a situation where the public had built this,” he said. “To lose that, without giving it a fair chance, would have been a big mistake.”
Mr. Griffin expressed concern about the foundations’ plan to set up a new nonprofit to handle programming for the center. He said he wouldn’t support additional asset district funding for the center “until I see a solid board and business plan.”
He said the programming also must change “because what occurred previously didn’t work.”
As part of their plan, the foundations will set up one nonprofit for programming and a second, led by African-Americans, to own and operate the building. They also intend to contract with the Pittsburgh Cultural Trust to manage the building, at least at the start.
Carolyn Duronio, an attorney for the foundations, told board members the consortium will provide $4.5 million over the next three years to operate the center.
The foundations won’t ask the asset district for help in covering the $4.5 million, but that does not preclude them from making funding requests in the future, she said. The asset district routinely had provided operating support for the center, which opened in 2009, before it got into trouble.
It has been holding $525,000 in escrow since the center defaulted on its mortgage last year, triggering a foreclosure by Dollar Bank and ultimately the judicial sale handled by court-appointed conservator Judith Fitzgerald and approved last week by Judge Lawrence O’Toole of Allegheny Common Pleas Orphans’ Court.
That $525,000 is part of the $1.5 million asset district is providing. Another $975,000 will come from the $20 million reserve at the agency, which is funded with a 1 percent sales tax surcharge.
The foundations will contribute $5.7 million toward the purchase, including $500,000 from a private donor. Robert Rubinstein, URA acting executive director, said closing is expected to take place Friday.
With no debt, the center should thrive in the future, he said. “I’m confident that no one’s going to let it fail this time,” he said.
Mark Belko: email@example.com or 412-263-1262. First Published October 27, 2014 5:58 PM