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Originally Posted by SkyPittsburgh
This might be just a bit of bitterness coming out of the politicians. They sunk millions of dollars into this and it will be an embarrassment to see it fail so quickly.
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It may not even be coming from the politicians themselves, since they were not really personally involved. I think the foundations feel entitled to take over the building because they invested so much in it (there is no legal merit to that position, but this is politics), and since they are politically potent in their own right, they are bringing the politicians along with them.
The politicians may also be worried that a for-profit entity taking ownership of the building looks worse than the foundations doing so. I don't think it is at all clear that the former outcome would actually be worse for the cultural program in the long run, but experience has shown it is pretty easy to demagogue any sort of transfer of public or quasi-public assets to for-profit companies, even if that would represent a good deal for the public and good public policy.
Edit: Speaking of what is really in the program's best interests, here is a very interesting perspective from a former chairman of the AWC (he became chairman in 2010, after the AWC was already in dire financial condition, and apparently was still in that role when the foreclosure process began):
http://pittsburghurbanmedia.com/PUM-Excl...n-A-Walton-Former-Chairman-of-the-Board/
The whole thing is very interesting, but this was some very useful background:
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A huge thank you goes to the patience of Dollar Bank and many other creditors who did their individual and collective best to help; however, the mountain of debt was just too high. In a last ditch effort to preserve the mission of the Center, and salvage the efforts of so many over time, the Board voted to pursue other options. One such option was the identification of an entity that would loan and/or give the Center sufficient capital to satisfy all outstanding creditors, establish an operating reserve, and allow the Center to re-tool and implement a new business model. The incentive to the perspective investors was granting the right of first refusal for the air rights needed to potentially build a hotel above the Center. Unfortunately, the board was within 30 days of finalizing that opportunity (under a non-disclosure agreement) when the Dollar Bank had no further recourse, given banking regulations, but to petition for foreclosure.
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So I actually wonder if the entity they had been talking to is the same developer who made the bid. Among other things, that would explain why that developer felt confident in making a bid that would come so close to paying off all of the outstanding debts on such short notice.
Anyway, here is the upshot:
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I view the 9. 5 million dollar offer is more closely aligned with the best interest of all stakeholders, especially those of the African American Community. Approval of the 9.5 million dollar offer would:
· Essentially eliminate the debt of approximately 7-8 million dollars owed Dollar Bank and the banks in the consortium
· Eliminate the .5 million dollar debt owed the Urban Redevelopment Authority of Pittsburgh
· Pay something toward the $1 million dollar debt owed various vendors and individual supporters( many of which are small businesses)
· Preserve the name and mission and of the AWC by allowing it to continue as its own governing organization without the burden of ongoing debt
· Provide the opportunity for an economic development enterprise that would create at least 100 jobs in the case of a proposed hotel
· Leave a legacy of which the African American Community could continue to be proud
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Some interesting implicit criticisms of the foundation plan in there.