Penguins ‘restorative development’ project aims to repair Pittsburgh’s famed Hill District

PITTSBURGH – Sixty-five years ago, this sports-obsessed city seized land from one of the nation’s most important Black neighborhoods, the Hill District, to build an arena that later became the home of the Penguins hockey team.

Eight thousand people were displaced, many into public housing. Four hundred and thirteen businesses vanished. Majestic structures such as Bethel AME Church, which once was a station on the Underground Railroad, fell to the wrecking ball.

What remained of the Hill District fell into desolation. Cut off from investment by real estate redlining and from downtown by the arena and a new highway, what was once a mecca of Black sports, music and culture found itself in recent years with a 21% unemployment rate, 45% of residents living in poverty and more vacant lots than businesses.

The team belatedly is acknowledging its impact on a neighborhood that has little love for the Penguins. “What happened 60 years ago was a travesty of epic proportions,” said David Morehouse, president and CEO of the Penguins. “That is a black stain on the soul of Pittsburgh that no one can erase.”

As the decades passed, the Penguins convinced the city and state to help pay for a new arena next to the old one, where they sold out every game for 12 consecutive seasons on their way to a total of five Stanley Cups. As part of the negotiations with the city for that new arena, the team obtained the right to redevelop the old arena’s 28-acre site.

Today, as the Penguins begin a new season with an away game against the Philadelphia Flyers, the Hill finally has a chance to be made whole. After years of wrangling, an uneasy alliance between the city, the team and Black community leaders is poised to begin redeveloping the Lower Hill District. The first phase includes a $234-million, 26-story tower that will be the headquarters of First National Bank; a $120-million parking garage and Live Nation music venue with small-business incubator storefronts; and 300 units of housing with an $80 million price tag. It’s the start of a project they hope will revitalize the entire Hill District and boost the upward trajectory of Pittsburgh, the former steel town that survived the Rust Belt era by transforming itself into a hub for medicine, education and tech.

But the ghosts of the demolished Lower Hill linger.

“The jury is still out as to whether or not this development will reconcile the harm and trauma and costs to the Hill District community,” said Marimba Milliones, president and CEO of the nonprofit Hill Community Development Corp.

“It’s really just about accountability,” Milliones said. “It’s about restorative development.”

That sounds awfully close to another word that starts with R, a word that makes many white folks snap their purses shut. But if reparations are what the Hill needs, Pittsburgh and the Penguins might be recognizing that the whole city will be better off as a result.

In 2014, Milliones, then-Penguins chief operating officer Travis Williams, Mayor Bill Peduto, Allegheny County executive Richard Fitzgerald and city councilman R. Daniel Lavelle signed an extensive agreement called the Community Collaboration and Implementation Plan (CCIP). It outlines a process to ensure that the Hill District shares in the anticipated ownership, profits, jobs, tax revenue and investment expected to come from the redevelopment of the old arena site. But each step of the plan – which in this early stage means things such as choosing a builder, obtaining financing, providing tax breaks and setting up zoning – requires its own set of partnerships and negotiations, which require good faith and compromise.

Which means there have been arguments, recriminations and lawsuits. In May, the Penguins briefly backed out of the deal. Some final details must still be approved before the first shovel can hit dirt later this year.

If the process continues to move forward, the arranged marriage of a hockey team and a Black neighborhood could become a national model for equitable development. It could offer a path forward for other cities still suffering from the last century’s federally funded “urban renewal” projects that rammed not-so-freeways through Black neighborhoods and replaced their homes with housing projects. It could be a reimagination of gentrification.

“This is the turning point,” Morehouse said. “We stuck with this. We could have just turned around and sold this to somebody, could have given up on this, but we believe that it’s worth it. This is going to be the best type of community development plan, where we take private investment and deliver it for the social benefit of the community. It will be the model for the country, an example of how you can use the power of sports to leverage investment in a community that’s desperately in need of help.”

But only if the uneasy alliance – including Milliones, Morehouse, entrepreneurs and city officials – can hold.

Lavelle, the city councilman, was born and raised in the Hill District. His family has owned a real estate firm there since 1951. “I was sworn into office in 2010, and there’s probably not a month that has gone by where I haven’t dealt with the Lower Hill in some form,” Lavelle said.

The Lower Hill was razed in the late 1950s to build the Civic Arena, nicknamed “the Igloo,” a structure that opened to oohs and aahs in 1961 as one of the first retractable-roof stadiums in the world. With a seating capacity ranging from 10,500 to more than 18,150, the arena hosted events from rock concerts to Muhammad Ali’s 1963 knockout of Charlie Powell to Sonny Vaccaro’s annual Dapper Dan high school basketball all-star game. In 1967, it became the home ice of the Penguins when they entered the NHL as an expansion team.

In the 1983 and ’84 seasons, the Penguins had the league’s worst records and flirted with bankruptcy. They tanked in ’84 to secure the No. 1 draft pick and superstar-in-waiting Mario Lemieux. He and rookie Jaromir Jagr delivered the franchise’s first championship in 1991, and the Penguins won another Cup in 1992. But by the end of that decade, the Penguins were in bankruptcy, not just flirting with it. Lemieux was the team’s largest individual creditor, owed millions in deferred salary, and he parlayed that debt into a controlling ownership interest in the team. In 1999, Lemieux and the supermarket magnate Ron Burkle took over the Penguins.

Using the standard pro sports playbook, Lemieux and Burkle leveraged relocation offers from other cities to squeeze Pittsburgh and the state of Pennsylvania into helping pay for a new arena, Consol Energy Center, next to the old Igloo. The Penguins moved into Consol in 2010 – Lavelle’s first year in office.

The Igloo was demolished in 2012 and replaced by a field of parking lots. Consol was renamed PPG Paints Arena. Those lots, along with a span of Interstate 579, cut off the Hill from downtown Pittsburgh as sharply as the red lines bankers once drew around the Hill on maps to delineate where they would not make loans.

Lavelle, mentored by Jake Wheatley, a Black state representative who also represents the Hill, saw opportunity in those empty spaces. “My interest is in creating Black wealth,” Lavelle said. “What is every contract that is going to be utilized? What is every dollar that’s going to be spent? Predevelopment, development, postdevelopment. We should be looking at every one of those.”

That’s why the CCIP includes provisions calling for 30% of contractors to be minority-owned and 15% to be women-owned. Seventy-five percent of contracted labor or similar services must be provided by minorities or women. Twenty percent of new housing should be sold at below-market rates. The CCIP also requires, among other things: local job creation and workforce training programs, homeownership initiatives such as down payment assistance, and grants to help Hill residents create new businesses that would serve the bank tower.

“Who’s providing toilet paper for the First National Bank tower? Who gets that contract?” Lavelle said. “Whoever does that is good to go with sending their kids to college. If we have a Black company that supplies toilet paper, they should get that contract. If we don’t have it, let’s create it.”

The Penguins don’t own the land outright, just the development rights. The land is owned by the city’s Urban Redevelopment Authority (URA) and the Sports and Exhibition Authority, which both must approve development plans. It’s a delicate balancing act: The team needs community buy-in to succeed. But the Pens are under no obligation to proceed if they don’t get the tax breaks or other terms they want.

“At times it’s been a very real struggle,” Lavelle said. “With that being said, currently as we sit here today, the Penguins’ organization is working with us.”

“I think they’ve come around to just realizing that not only is this the right and equitable thing to do, but that they’re still going to make millions of dollars off of it. There’ll be no loss for them. And I do think that they want to leave behind their own legacy of what they were able to accomplish in the Lower Hill.”

As broad as the CCIP’s ambitions are, at the top of the list is a requirement to include Black- and women-owned businesses in the biggest pieces of the development. That means contracts to build the bank tower and residential units, and a piece of the ownership, too.

The Penguins have been through several developers as the project wavered over the years. Now they have a commitment from the Buccini/Pollin Group, a white-owned firm from out of town. But construction on the 300 housing units will be handled by Intergen Real Estate Group, led by Black developers Keith Key, Robert Agbede and Bomani Howze. Buccini/Pollin recently made Howze a vice president.

“What I said to Bomani was, ‘You’re sort of the spook who sat by the door,’ ” Lavelle said. “ ‘You gotta help deliver for us.’ ”

Asked how it feels to be on the cusp of making things right for the Hill, Howze said, “I’m trying to channel my grandparents.”

Mary and William Howze were among the 8,000 people displaced in the 1950s when the Lower Hill was razed. Howze keeps a picture on his phone of the building where they lived, a second-story walk-up on Fulton Street. When that was torn down, they moved their 12 children (including Howze’s father, former city councilman Sala Udin) into the housing projects being built farther up the Hill.

Now Howze’s development can bring folks back down again. About 60 of the 300 apartments will be available to Hill residents at below-market rates.

Howze is less interested in the physical features of what he is building than how they are being built: 45% of predevelopment contracts will go to minority-owned enterprises, with similar percentages planned for later stages. Which is only right, Howze said, given that the whole situation began when the Lower Hill was “gifted” to the Penguins.

“It was more of the same type of historic practices of how real estate and land is transferred from white men in power to white men in power, from the public sector to private developers,” Howze said.

“The frustrations are there,” he said. “But the outcomes are going to be so much greater than any frustration we can experience along the way. It’s all worth it.”

Morehouse grew up with his divorced mother in Beechview, an Italian working-class neighborhood in Pittsburgh. He worked as a boilermaker before graduating from community college and then Duquesne University. He started at the bottom of Bill Clinton’s 1992 presidential campaign and worked his way up to high-level positions in the Clinton administration and Al Gore’s 2000 presidential campaign. Penguins owner Burkle was a prominent Democratic donor, and after Gore lost, he hired Morehouse to consult on the Penguins’ arena deal.

The deal went so well that Burkle hired Morehouse full time, and he ascended to CEO in 2010. Now the Penguins’ franchise is worth $650 million, up from the $107 million Burkle and Lemieux paid in 1999. Last season, the Penguins’ $159 million in revenue and $14 million in operating income were more than 21 of the 31 teams in the NHL, according to Forbes.

“I understand the significance of what was done to the Lower Hill,” Morehouse said. “And in reality, there’s nothing we can do to erase that. But what we can do is recognize it and do the best job that we can to use our position and the platform we stand on as a professional sports team, to help the neighborhood, help create wealth in the Black community, help create jobs.”

The Penguins helped build the first supermarket on the Hill. (It didn’t survive.) They held a Black Hockey History Day. They agreed to a special Lower Hill tax district, which can reinvest millions in tax revenue from the development in the Hill instead of being provided as an abatement to the developer. They invested $100,000 in the Hill District Federal Credit Union and the same amount in the local Ammon Recreation Center. They hired Black scholars, architects, engineers and athletes as consultants and project managers. Their deputy general counsel and director of human resources, Tracey McCants Lewis, is a Black woman. The list goes on.

“There’s been a lot of promises made, and there’s a lot of promises broken,” Morehouse said. “So I think the Hill is indicative of Pittsburgh in a broader sense, where it’s, you know, show me. Don’t tell me. Do something.”

The city agency overseeing the CCIP is the Urban Redevelopment Authority. The five-member URA board, which includes Lavelle, is appointed by the mayor. The URA’s deputy executive director is Diamonte Walker, a lifelong Hill District resident. As the project draws closer to breaking ground, she feels both challenged and energized by the magnitude of her responsibility to her neighborhood. The special tax district could pump an estimated $40 million into the Hill, she said.

“Right now, the impact is all just conversation. It’s all just conjecture,” Walker said. “Once we actually get to the brick-and-mortar development we can actually say, ‘Did they meet the mark or didn’t they?’ … Right now, when you’re in the process, the process is ugly and brutal at times. But I don’t think we can shy away from that.”

Walker worked at the Hill Community Development Corp. before coming to the URA, where she is the first Black female director. It’s no accident that she uses the same term as Milliones – “restorative development” – to describe her goals for the Hill.

“I don’t think that this is a moment that we can get wrong,” Walker said. “This is a highly emotional moment for everybody involved, particularly for residents and practitioners in the Hill District. It’s going to say a lot about the city, by how it honors that community voice and responds to those community needs.”

As a young girl, Milliones picketed downtown jewelry stores that sold apartheid South Africa’s krugerrand coins and knocked on doors to get out the vote. Her mother, Margaret, was an activist and school board member who died of a stroke when Milliones was 3. Her father, Jake Milliones, held a doctorate in psychology, worked for desegregation as a member of the school board and was the first Black person elected to city council from a district. The Hill District, of course.

So Milliones is not impressed by bullet points or swayed by promises. If Morehouse says the Penguins will do something, Milliones says, “show me.”

On Dec. 28, 2020, Milliones posted a story to Facebook about Burkle buying Michael Jackson’s Neverland Ranch for $22 million. “The next time you see an article about 100k going to Ammon, or a Catapult store that will be located on the Lower Hill, remember this story,” Milliones posted. “The next time you hear about how huge $40 million going to the Hill District is, remember this story. The next time you see a headline praising community reinvestment focused only on jobs but not ownership and equity, remember this story.

“In 2021, we’re going to stand up, shoulder to shoulder, and demand what is rightfully ours in this here Hill District. We will not fall for the okey-doke, but instead, we will hold those responsible for the distribution of our tax dollars and public resources to the highest standard. We will hold the Pens and private developers to the highest standard. We’re worth it, and don’t let anyone tell you differently or throw slick marketing in front of you to rearrange reality. The Hill District will be made whole.”

The executive management committee of the CCIP, of which Milliones is a member, has asked the URA to require the Penguins to be more specific about the timing of their investments. “Instead of you kind of throwing these benefits out there as we go along, randomly, without appropriate metrics to determine whether or not it’s a commensurate investment for the development that you’re doing,” Milliones said in an interview, “let’s align the reinvestment with the part of the site that you’re developing at that moment. If you’re going forward with Block B, we want to coordinate the document that shows what your reinvestment commitments are for Block B.”

That’s not all she wants. In 2021 and beyond, Milliones will hold everyone to the highest standard. That is what is demanded by those 8,000 residents, by those 413 businesses, by the dust of the original Bethel AME Church. The price tag for all that is incalculable.

“And yet,” Milliones said, “we must calculate.”