University Times

Pitt has been sued in federal court by the developer of Oak Hill (formerly known as Allequippa Terrace), an 80-acre public housing residential area adjacent to the upper campus.

The suit was filed May 1 in U.S. District Court for the Western District of Pennsylvania on behalf of Beacon/Corcoran Jennison (B/CJ) Partners, LLC, a Boston-based residential real estate development company.

Last September, B/CJ filed a similar civil suit, which is still pending in Allegheny County Common Pleas Court. (See Sept. 29 University Times.)

The federal suit contends that B/CJ, which acted as guarantors on various federal notes issued in 1996 that helped finance the project, would be liable for some $15 million if the Oak Hill housing development project should prove unsustainable.

The federal suit alleges Pitt is trying to thwart existing legal agreements between the developer and the city mayor’s office, the Housing Authority of Pittsburgh, which owns the land, and the Oak Hill Resident Council.

B/CJ claims the right to continue with Phase II of building housing units at Oak Hill, Pittsburgh’s largest housing project. Phase I of the residential construction project resulted in 639 apartment and townhouse units completed in 2002. The developer wants to add another 200 public housing and market-priced units, while Pitt wants to purchase some of the undeveloped land — about 15 acres — to build athletics fields.

“Without the completion of Phase II and the likely economic failure of the one-half completed redevelopment project, [B/CJ] are exposed to the liability of their guarantees of the approximately $15 million of indebtedness,” the suit maintains. “Likewise, any significant deviation from the plan, approved by HUD in 1996, will result in Phase I being regarded as little more than the next generation of public housing and not as an integrated segment of the larger West Oakland and Hill District neighborhood in which it is located.”

The federal suit alleges that Pitt has offered “inducements to certain representatives” of the Oak Hill Resident Council to undermine the council’s relationship with the developer.

Specifically, the suit alleges that Pitt officials in August 2004 offered economic benefits to members of the residents’ council, including “full-tuition scholarships,” “entrepreneurial opportunities,” construction of a co-op grocery store and a dry cleaners and a resident-controlled concession in the Petersen Events Center.

The Oak Hill Resident Council is not a party in the suit.

The federal suit also avers that Pitt used its role as host of the June 3-18, 2005 Senior Olympics as an opportunity to influence some Oak Hill Resident Council board members and their families and friends by employing them as parking attendants at an undeveloped portion of Oak Hill. Seventeen people earned a total of $10,221, the suit alleges.

“Although the University of Pittsburgh owned and managed a multiple story parking garage [in the immediate area] it devised a plan to conduct parking by using the tenants as employees … which made absolutely no economic sense for the University with its own garage located immediately adjacent,” the suit charges.

In addition, according to the suit, in a September 2005 letter Pitt promised to reimburse the Oak Hill Resident Council $152,000 — $1,000 for each of an estimated 152 housing units that would not be developed should Pitt acquire the land.

The suit further contends that Pitt has used political influence on the Housing Authority of Pittsburgh.

“The University, exercising its network of alumni and relatives of employees that held elective or appointed offices of authority, launched its campaign to persuade the [Housing Authority] that it could realize substantial funds for the sale [to Pitt] of a portion of the site where Phase II was to be built,” the suit alleges.

The suit asks for damages in excess of $75,000.

The University has acknowledged interest in purchasing the undeveloped portion of the disputed land to construct sports fields for its athletics teams, particularly soccer and track and field, which were displaced when Pitt Stadium was razed in 1999.

University officials said last fall that Pitt had offered the Housing Authority $3.5 million to purchase the 15 acres.

Regarding the federal suit, Pitt spokesperson John Fedele said, “We have not been served with legal papers, but in any case, it is the University’s policy to decline public comment on pending litigation.”

-—Peter Hart