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What Will Happen to the August Wilson Center?

September 23, 2014

by Matthew Smith, Associate

augustwilsonThe August Wilson Center for African American Culture is at the center of a legal battle in the Allegheny County Court of Common Pleas, Orphan Division. The stunning Center is housed in a 65,000 square-foot location at 980 Liberty Avenue in Downtown Pittsburgh’s Cultural District. The location was built in 2006 using a nearly $8 million loan from Dollar Bank. As collateral for the loan, Dollar Bank has a mortgage on the property. However, by September, 2013, the Center had become delinquent in its loan payments, and Dollar Bank began foreclosure proceedings. By November, 2013, former Chief Bankruptcy Judge for the Western District of Pennsylvania Judith K. Fitzgerald was appointed as a conservator.   A conservator is a guardian and protector appointed by a judge to manage the financial affairs and/or daily operations.

Since the Center has entered into conservatorship, a New York development company, 980 Liberty LLC, has put forth a $9.8 million bid for the Center. 980 Liberty proposes to convert roughly half of the Center’s square-footage into a 200-room luxury hotel. Local foundations have resisted this overture. Instead, the local foundations prefer to allow a sheriff sale of the property scheduled for October 6, 2014 to proceed. However, former Judge Fitzgerald filed a motion on September 17, 2014 with the Allegheny Court of Common Pleas seeking to delay the sheriff sale. However, Judge Lawrence O’Toole rejected this motion, yesterday.

Now, the fate of the Center will likely be determined at a critical hearing on Monday, September 29, 2014. The Court is set to review the covenants on the property put in place by Pittsburgh Urban Redevelopment Authority when it granted the right for the Center to be built. These covenants may restrict the use of the Center solely to promotion and advancement of African-American arts and culture. The covenants also require the approval of the city for any changes to the exterior of the complex. If Judge O’Toole upholds the covenants, not only will the offer of 980 Liberty become moot, it could jeopardize the viability of the sheriff sale on October 6th. In such an instance, local foundations would likely be the only bidders, and Dollar Bank would be left with millions in losses. However, if Judge O’Toole strikes down the covenants, then the path would be cleared either for the bid from 980 Liberty or for the sheriff sale.

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