posted by Mike Madison at 9:07 PM /
How did we miss this? From the August 2 Post-Gazette:
Authority, hotel ready to sign deal
The best news? "The developer is not asking for any tax assistance for the $10 million to $12 million project, Mr. Kratsa said. The project will put the parcel back on the tax rolls."
Link
Authority, hotel ready to sign deal
A developer with more than a dozen national chain hotels in the area is planning to build an all-suite hotel on Washington Road on land currently owned by the Mt. Lebanon Parking Authority.
Kratsa Properties, based in Harmar, plans a 98-room, seven-story hotel on what is called "Parcel A" on Washington Road. The land is now a metered parking lot.
The best news? "The developer is not asking for any tax assistance for the $10 million to $12 million project, Mr. Kratsa said. The project will put the parcel back on the tax rolls."
Link
Labels: economic development
28 Comments:
Yes, it is good news that tax assistance is not being requested or a condition of the project going forward;however, for anyone curious or concerned about how our local government works,consider the following facts about this particular project:
1)this site is a " Kreiger Plan "site, the responsibility for development of which was given to the Mt. Lebanon Economic Development Council (EDC),a minicipal advisory board. The EDC has been by-passed on this hotel project -- it has been crafted by a few behind-the-scenes, non-public meetings between public officials and the developer. Why?
2)the site property is owned by the Mt. Lebanon Parking Authority (MLPA).The property should have been put out for bid for a highest and best use development that would yield the highest value or financial return to the MLPA as well as the most appropriate use for the site. Instead we have this hotel project. Does the MLPA have a current (2007)certified appraisal of this property? If so,what is the highest and best use and what is the appraised value of the property for such a use? If no current appraisal, why not? What is the price for the property the MLPA and Kratsa have agreed to? How does it compare to the appraised value?
3)the Mt.Lebanon Zoning Ordinance, Section 304.2 indicates that a hotel on this site is not a "use by right", that is, it has to receive special consideration under very specific procedures because in Section 304.3.4,a hotel is a Conditional Use subject to conditions set forth in Section 1002 of the Zoning Ordinance, as well as Section 1003 , etc..What this suggests is how could a "signed deal" be imminent when Sections 1002 and 1003 have not been conformed with, certainly not in their entirety? Would a competent,experienced and successful developer enter into a sales agreement without assurances or an implicit understanding that all neccessary approvals would be forthcoming? Where/when have the required public hearings been advertised and held?
4) further in this regard, there is a very specific off-street parking requirement for a hotel project. This requirement eventually caused another developer to abandon a hotel on this site some 3 years ago. It appears that Kratsa will not build the required off-street spaces on or under the parcel, but will rely on public spaces owned by the MLPA in nearby lots or garages in order to comply with the Code(law).The Code, or Zoning Ordinance, in Section 817.5 Vehicular Parking, specifies that a hotel requires 1 off-street parking space per sleeping unit plus 10 spaces per 1,000 SF Gross Floor Area of rest/lounge/meeting rooms.This means that for the proposed 98-room hotel, at least 98 off-street parking spaces will be required--more if restaurant,lounge and/or meeting rooms are planned. Kratsa will be required to enter into a long term lease for all required spaces with MLPA -- unless the Commission cuts Kratsa a monumental break, which they will. Bet on it! There are some relief possibilities in Sections 817.13.3.1, 817.13.3.2 and 817.13.3.5 that would be a stretch; but, the Commission will likely ask the Traffic Engineer (a paid outside consultant) to "study" the matter-- which means find a way to justify relief.
Enough for now. There will be more, but this is an example -- a taste-- of how things work in good old LeboLand -- and a message to Commission candidates who aspire to lead us in the future. This is an example of how we do not want to be "governed". Back-room politics are a non-starter.
Finally, a place for the in-laws to stay when visiting us in Mt. Lebanon!
A hotel may very well be a good thing - but when you are selling public land there should be a public process.
Here is the extent of the EDC's involvement - From the May 9, 2007 minutes:
Other Business: Mr. Feller noted that the Land Use Group was working with a hotel developer who is interested in a project in the Uptown area.
This appears to be nothing more than a comment in passing - no meaningful discussion took place.
Then on June 11, the Commission discussed the topic. And the project was moved forward. (Not approved, just moved forward.)
And again - Without any meaningful input from the EDC.
Good points, Bill. There should be public involvement in an issue like this involving public land. That said, it's not like there are folks clammering to build and/or buy up the properties that are already in the market in downtown Mt. Lebo so a project like this should be welcomed with open arms.
Bill,
I'm pretty sure that there is to be off street parking provided by the owenr of the Hotel. You may want to re-check your facts. Also as stated before, no one else is trying to do anything up there on Washington Rd, so this is a welcoming project. This spot has been debated since I was a kid here in High school. Remember when it was going to be a mixed used retail/office/residential spot back in the 80's to tie into the T Station? That would have been a great idea but after all this is Mt Lebanon.
Tired of playing politics as usual around here and that is why nothing ever changes and stays stagnant. What would you propose MLPA do with that land Bill? They haven't even paved that lot like in 16 Years that I have been taking my kids to the peditrician's office in the Howard Hanna Building next door.
Build it and build it big!~
Joh T -- suggest you check these facts. The MLPA has owned the "Parcel A" site, a/k/a the North Lot, since 1987... purchased from PAT with funding via a 10-year, interest free loan from Mt. Lebanon.PA law prohibits local governments from buying land for future development (ie."landbanking"); but, parking authorities can buy land if they utilize the land for interim public parking -- which is what the MLPA did at Mt. Lebanons' instruction and with an interest-free loan. The site,along with others on that side of the street, were to be developed as part of a monumental "Towne Square or Center" project in late 80's that never materialized because of funding and tax law changes. Since then, Kreiger, the "world renowned" urban planner from Cambridge, MA ,hired by Mt. Lebanon in 1993, advised us in 1995 that that site should be developed as part of or in conjunction with a massive air rights development over the PAT rails and what is called Parcel B.
From 1995 to about 2000, no action was taken on the Kreiger recommendation because the MLPA will not sneeze without MUNI permission, and the MUNI was too absorbed with other matters, and the EDC was spending all its' intellectual assets on the "Bannow project".. 8-years worth for nothing. In 2001 or so a local architect/developer (Murovich)proposed a hotel site on Parcel A. After 3 years of trying to deal with the MUNI and PAT,he walked away. Since then a local public offical/developer proposed a retail building to house a secret but "well known nation-wide firm" (possibly Trader Joe's), but the deal evaporated. Another local developer proposed an apartment building, but was informed by the MUNI that they didn't want an apartment building on that site.Amazing ! The MUNI is now pursuing the the air rights recommendation with vigor (and tax $)in what they're calling a TRID Project, but it is unclear whether Parcel A as a hotel is a defined or optimum use of the site viz-a-viz the grand plan or scheme.
Given the history, Joh T,a lesson that should have been learned but hasn't is that government & politics should not interfere with the free market. To answer your question as to what should be done with the land --(1) follow the Kreiger recommendation... make it an integral part , not an independant hotel or whatever, of a master plan for a TRID development ( Parcels A & B air rights)and determine the highest and best use of the site on that basis. If the TRID plan is unworkable, then open the site via an RFP with no strings attached and no governmental/political interference or conditions, for a highest and best use development, by a private sector developer with no TIF or other tax shams made available. The MLPA is an impediment to progress , is excess baggage and should be made to stand aside in this entire process. The 10-year, interest free loan to the MLPA ended up being a 15-year deal, by the way.Taxpayers picked up the actual "interest free" cost of the loan.Ain't government wonderful.
What would be your suggestion for the site, Joh T, given the historical facts and current realities associated with it ?
Sure, let’s build it BIG! Just like the Cyclops building. The price was $4,450,000 in 1989 and they paid ZERO TAX in 2004, 2005, 2006 and 2007. If our government were not so busy with back room politics we would be collecting tax on that building – tax YOU PAY because they pay nothing.
The TIF for Washington Park helped get things going again, just as planned. Finally, some growth. The TIF was the best thing Lebo has done in a while.
Bill, I said to check your facts about the parking issue. That there is to be space provided by the Hotel devolper.
As for the rest of what you stated, I was trying to say that unless something - anthing starts to happen up there on Washington Rd to bring in a new business than nothing will ever happen. The original idea behing the 1980's project would have been fantastic. But this is Mt Lebanon and Pittsburgh and Pennsylvania. Hard to approve anything that may involve tax changes, etc. Like I said politics as usual.
The TRID idea is basically the same thing that PAT had wanted to do and still is a great idea, but come on really. Do you honestly think that that thing will ever move forward in your on my lifetime? People around here have absolutely no forward thinking so nothing will ever change.
What should be there in my opionion? I still think that the original idea was the best. I look at places that have Transit hubs like in the DC metro area and the devolpment that surrounds them and think of what Mt Lebo could be.
Look at places Like Bethesda or Alexandria and that is what I feel would be great. As far as a "Trader Joes" been there and done that in the east end. Sorry to say that with the laws of PA it has minimal appeal to me and also to them. Check them out in states where there is no LCB as here in PA and the stores are fantastic.
What do you propose that we do with Parcel A? If this thing is opened again to the public debate it will be another 20 years with no action and still a vacant metered lot, that still needs paved.
A public process would have assured the Parcel A development is married to the TRID development.
A public process would have put the site out for bid to assure the cash starved and desperate MLPA gets the most $$ for its property. Not just accept any old unsolicited offer that comes along.
If the hotel goes in - the metered lot next to the Howard Hanna office is gone and the hotel may have to lease spaces in the Academy Avenue lot to meet the Zoning requirements. This could be a net loss of parking for the balance of the business district.
But with Starbucks getting free parking up the street, funded with diverted school taxes who will notice?
John T -
Yes, Kratsa will have some parking spaces on site. Do you know how many and where they will be? I don't! Permit me to speculate :
If the building will house 98 all- suite rooms plus a lobby and ancillary rooms, and the building is to be no more than 7 stories high from the Washington Rd. elevation (ie. Kreiger-specified height limit), the parcel size would not likely be able accomodate parking spaces on the street level. The only likely off-street parking "on site" will be from a Parse Way entry into the property. This would be a lower-level or underground single level garage-like facility similiar to that under the North Garage.This might hold up to ,say,20 cars at best? That would leave at least 78 more spaces to arrange or for the MUNI to forgive as a quid-pro-quo for not having to cough-up a TIF ?
If this hotel is built, Howard Hanna will lose the sweetheart parking deal they have had for years on the site -- the MLPA gave them an open-ended lease on a square foot area close to the 615 Executive Office Bldg. large enough to park 4 cars, but allows them to park up to 8 vehicles. When Murovich and the MUNI announced plans for the Murovich hotel on the Parcel A site several years ago, Howard Hanna said they would move their offices out of the 607 building (they do not own it)next door. Since they have "walked" from the Washington Park deal, maybe they'll leave LEBO altogether if Kratsa builds ? An alternative would be the Kossman office complex underway on Castle Shannon Blvd.-- they need tenants and will have far more on-site parking than the Code calls for. Kossman didn't ask for a TIF,but he's ruined a pristine woodland. Thats another 50-year history lesson on MUNI governance.
John T -
Just got around to reading the 8/2/07 P-G article on Kratsas' hotel. Underground parking for 98 cars ? Interesting. That could require perhaps a 5-story underground parking garage --very expensive! The MLPA's Academy Ave. 89-space surface lot cost over $25,000 per space to build (of course thats the MLPA,and they just don't know any better).The MLPA's North Garage cost $18,500 per space 12 years ago. Zamagias representations and documents claim that underground parking for Washington Park will cost $30,000 per space to construct (but they would sell for $15,000 to condo buyers, which might explain why things are a bit confused over there). If one would use $20,000 per space for Kratsa, 98 spaces might cost upwards of some $1.96 million!Wonder what Kratsa will end up charging for daily or overnight parking for guests, and what his break-even occupancy rate will have to be? Everyone should invite their in-laws to visit and stay there next year to "help the cause".Maybe the MUNI will sponser a fundraiser?
Bill,
I'm no civil engineer, but I'm not sure your cost estimates work out the way you said. All the cases you mentioned involved dedicated construction for parking, while the cost of building the parking would obviously be shared with the cost of building the hotel itself, since they share the same foundation. Or, in other words, once the parking garage is built, the marginal cost of building a hotel on top of it may be much lower than the total cost of building a hotel.
BTW, did MLPA really pay over 2 million dollars for a surface parking lot? ($25k x 89 spaces = $2.225M) Where on earth did the money go?
If that's true then even if every space is filled 10 hours per day, 365 days per year, it will take almost 7 years to break even at $1/hr.
As a follow up note, it was mentioned by some one as to what would happen with the parking situation if there is a restaraunt at the hotel. Well the article I read stated that the new owner wants to try his best and partner with the existing business that are on Washington Rd. That means as stated in the article there are no plans to have a restaraunt on site as the owner stated he wants to encourage people to visit the existing restaraunts on Washington Rd.
As far as Howard Hanna is concerned, do they or we need their presence right there on Washington Rd? Having used Hanna 2 times with with real estate trnasactions in the past 7 years I would have to tell you that I hate it. If I was them just for the mere convience for my customers I would move to a place that has ample free parking like the Kossman plan for Castle Shannon Blvd or Manor Oak. True Washington Rd provides great visibility for them, but they sell more homes here and around Pittsburgh than anyone else. And all of their offices are not quite as visible as this one. So I think they will survive. I know that I would. Lord knows that it would be easier to walk down the sidewalk there without fear that some agent from their office may back over me from that over crowded spot that was mentioned for 4 cars but yeilds 8.
Look people, we need to move forward and welcome devolpment here and not try to hinder things. The suggestion of opening things up again for the TRID is great but can we as a community wait another 10-15 years while all the government agencies for local,county and state try to figure something out? We need to welcome new ideas that make sense. If people want to attract new businesses here for a Technology hub etc, then where will they stay? This really is important to get things started in some sort of direction.
Think about this- if the city gets a large convention and there are no rooms the beneift for the hotel is that it is right there on the T an 20-25 minutes to town. Point A to Point B, in minutes and a great neighborhood, a great chance of exposure for Mt Lebanon because if they stay here they may actually venture out and see what we really have to offer etc, etc etc. When I travel I do not just sit idle in my room and play with my computer or hang in the "lounge" of the hotel. I want to see what that city and surrounding area have to offer. It could be the start of a great incubator for more business and more residents.
Hello Jefferson--- I'll respond to the second comment you entered today first. The outrageous cost of the MLPA's Academy Ave. lot is primarily attributed to the costs the Authority was willing to pay for the 6 residential properties acquired for the surface lot-- the roughly $1.5 million of such costs consisted of(1)paying property owners more than the appraised values,(2)paying owners closing costs for both the sale of their properties as well as their buyers closing costs for purchase of replacement properties,(3)paying property owners' interim living costs for any hotel/motel time between moving out of the old & into the new accomodations, and finally,(4)paying for owners moving costs, house-to-house.The original plan was for 100 spaces, but Zoning restrictions, etc. required a cutback to 89 and added costs for retaining walls, landscaping, etc. as part of the remaining $800,000, or a grand total of about $2.3 million, possibly not including the two newfangled payment machines -- anyone knows that you lose $$ when you allow credit card payments under $5.00 or more ! Thats the MLPA -- the lot operates at about 20% occupancy on a good day. Bill Matthews did a proforma breakeven analysis last year that shows more dire results than yours, and presented it to both the MLPA board and the Commission. Their response? SILENCE (it was deafening).
Perhaps you and others ought to start coming to public meetings and study whats going on around here. I've got to run to a meeting--will respond to your construction cost comments later tonight. Cheers!
The MLPA board has an opening right now. It seems like there are a lot of people that like to bash them. Maybe one of you should apply?
Anonymous 7:08 when does your term expire?
Jefferson, re: your 12:18 entry --
I have an engineering degree and ran a curtainwall systems business (commercial,institutional,monumental buildings) for several years; however, I lack the expertise to offer a qualified opinion on the cost/technical aspects of your comments today.
That being said, however, I will point out that (1)the North Garage has a retail component that is not insignificant -- what I'm saying is that it is really a mixed-use structure (and intentionally designed that way)that also features an open public area in front of the street level retail that combines with a covered stairway and elevator connection down to Parse Way leading to the LRT station and the underground, leased parking area of the garage. Yes, its a garage but something more as well.(2) The Zamagias Washington Park complex consists of two mid-rise codominium buildings that will contain a total of 72 condo's, some 14,000 sq.ft. of street level retail space and two (2) levels of underground parking under each building, plus some ground level parking and what they call a "public park" -- it is definitely not just a dedicated parking construction project.
Perhaps a qualified construction cost estimator working independently, or for an architectural,, or structural engineering, or construction management, or general contracting firm can address your marginal cost comments.
fyi - saw it on the mt. lebo website.
anon 7:08
I have attended 2+ public meetings a month for almost 8 years. Last night I was the only resident to attend and speak at the MTL Planning Board meeting where the Capital Improvement Plan was discussed and recommended. We had a very constructive discussion. I appreciate all the volunteers that sit on the Boards and Authorities.
There are many ways to participate in our Community and I support them all. Folks should do what they can, when they can - it is our home and nobody else is going to take care of it.
One “poster” thinks the TIF is the best thing LEBO has done in a while. Let us all move!
Business owners, I would think, should be happy. Hotels book conferences. Conferences bring people. People bring business.
:-)
I know we'll utilize it for autism conferences. Last time we had one, we drew in 500 people. That's a good bit of business for the folks on Washington Rd.
Cindy W.
Cindy W -- would be surprised if this hotel will be booking any conferences.... don't think they will have any meeting or break or conference rooms in the building, nor will there be a restaurant, lounge, business center,fitness center,or coffee shop either on site. Some of these amenities are available down the street a block or two; but, this is not a draw for conferences. Check it out with pro meeting & event planners in town. Could be a draw for visiting guests for off-site weddings, reunions, bar & bat mitzvahs,funerals and all the regional and national swimming meets the Acqua Club says will be coming to LeboLAND as soon as we build the big new outdoor pool with the 750 stadium seats.
On the parking issue - I remembered, about 3 years ago, the MLPA borrowed $800,000 from the Municipality to build a public parking facility in the previous hotel project on this site. That $800,000 was soaked up somewhere else leaving the MLPA to rely on the School District to subsidize its new parking facility across from St. Bernard's.
Parking is a team sport in MTL.
Yeah Bill Matthews, you're right again as usual! The MLPA diverted the $800,000 loan from the MUNI to pay for the cost over-runs at the Academy Ave. boondoggle lot. The MLPA budget for the lot was $1.5 million , attested to by the MUNI Engineer with his professional stamp; however, the MUNI permitted the shift when things went out of control (as usual),which led to the 89-space lot costing $2.3 million (or over $25,000 per space)all of which is owed to the MUNI.
Contract signings on existing homes fell by 12.2% in July -- the largest drop since the pending homes sales index started in 2001, the National Association of Realtors reported Wednesday. The index hit its lowest level since September 2001. The index had gained 5% in June. Pending sales are 16.1% below July 2006. A decrease in pending home sales was seen in all four major regions of the United States, the group said. In July, pending sales fell 13.1% in the Midwest and 6.6% in the South. Pending sales fell 20.8% in the West and 12.2% in the Northeast.
Credit is tight. Where is hotel financing coming from?
Anonymous 3:58, I'm sure that our commissioners and school board directors will be more than happy to reach into your pocket, and mine if this developer has any trouble with financing. It's the Mt. Lebanon way!
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