Pittsburgh’s Planning Commission didn’t approve this controversial project in East Liberty. Here’s why.

You may know it as the development proposal with the *second* Whole Foods.

Penn Plaza

Penn Plaza

Jasmine Goldband / The Incline
Sarah Anne Hughes

How many Pittsburgh Planning Commission meetings feature a standing ovation?

Tuesday’s did, as some people in the room rose to applaud after the commission unanimously voted to deny approval for a controversial development proposal in East Liberty.

At issue: the demolition of Penn Plaza, home to low-income and Section 8 tenants in a part of Pittsburgh that is seeing rapid growth, and the buildings’ proposed replacement, a mixed-use development with market rate apartments anchored by a Whole Foods … about two blocks from another Whole Foods.

Jonathan Kamin — an attorney representing developer Pennley Park South, a subsidiary of LG Realty Advisors — argued in vain that the company had made a good-faith effort to engage with the community and had met the requirements set forth by the city.

But Commission Chair Christine Mondor and other members raised a number of concerns about the plan, from the proposal’s traffic study to the replacement of a public park but especially focused on community engagement. Mondor zeroed in on the one “fully public” meeting Pennley held on the project a day before the December presentation to the commission, which ended in a vote postponement.

“That is not robust community process, which was our condition put on this,” Mondor said. “That is not representative of good faith in communication with the community. And that is disappointing.”

Kamin in turn said a lot of progress had been made on reaching a consensus and pointed a figurative finger at a “small, vocal minority that wants to see the project killed.”

The attorney told reporters after the vote that his client would evaluate its options, including possible legal action, adding that he was “disappointed” by the commission’s decision.

“They came in with a predisposition against the plan that is inaccurate,” he said of the commissioners, adding that “we don’t believe the objective criteria was utilized to determine whether or not we have a plan that complies.”

Tuesday’s vote followed a four-hour meeting in December, where tenants, advocates for affordable housing and backers of a nearby park testified against the proposal. The Planning Commission decision comes more than a year after the first eviction notices went out at Penn Plaza.

This is how we got here.

The residents

In summer 2015, Pennley Park South began issuing 90-day eviction notices to residents of Penn Plaza. Approximately 200 households were living in the two buildings — at 5600 Penn Ave. and 5704 Penn Ave. — at the time.

Fifty-five households had Section 8 vouchers, per the Post-Gazette, and some of those tenants later struggled to find another landlord willing to accept the voucher.

Where am I going to go? Because prices are now market rate and very few units are designated for low-income,” tenant Lillian Grate said at a community meeting shortly after the eviction notices went out, according to KDKA.

After local officials including Mayor Bill Peduto got involved, the plaza owner agreed to a 60-day stay on evictions. In September, the city, the Urban Redevelopment Authority, Penn Plaza Tenant Council and Pennley Park South signed an agreement that provided some assistance to the tenants.

As part of that memorandum of understanding, Penn Plaza’s owner agreed to help the tenants with relocation costs and allow some residents of 5704 to move into 5600 until the latter building is demolished. 

Today, Lillian Grate is a proponent of the project. As president of the Penn Plaza Tenant Council, she signed the MOU and has sent two letters of support to the Planning Commission. Dozens of others sent letters to the body opposing the project ahead of Tuesday’s meeting, including East Liberty Development Inc. Executive Director Maelene Myers

Molly Nichols, director of Pittsburghers for Public Transit, also opposes the proposal, writing to the commission, “You may want to create mixed income neighborhoods, but the only way to do that, without displacing long-time residents, is by building more affordable units into the new developments.”

The residents of the since-demolished building 5704 had to be out by February 2016. The tenants left in the other building — fewer than 40 a month ago, according to an advocate, with around 25 still looking for housing — must be out by March of this year.

The affordable housing

Pennley Park South is not required by law to make any of the units that will replace Penn Plaza affordable.

As City Paper detailed, LG Realty Advisors bought the property from the Urban Redevelopment Authority in the 1960s. The Federal Housing Administration financed the mortgage, which was paid off at the beginning of the new millennium, meaning LG was no longer under any obligation to cap the rent.

The 312 units in the buildings made up 12 percent of East Liberty’s rental housing, according to East Liberty Development Inc., a significant chunk of the neighborhood’s affordable stock. In 2015, 68 percent of East Liberty’s rental units were market rate or affordable without a long-term guarantee they would stay that way. 

While the MOU between the city and developer doesn’t require any affordable units, it does state that, should Pennley Park South get a tax abatement, a portion should go into a fund for affordable housing. Kamin estimated that amount at between $10 and $12 million Tuesday. As the city explained in a release:

The agreement provides the City new tools to make further long-term investments in affordable housing across East Liberty and adjacent East End neighborhoods. It includes plans — subject to approval by area taxing bodies — for a new Local Economic Revitalization Tax Assistance (LERTA) district in East Liberty, similar to one created last year in the Hill District.


Pennley Park South, which plans to build a mixed-use retail and housing development at Penn Plaza, agreed to commit 50 percent of the tax increment created by the redevelopment to the LERTA fund, which would be devoted to affordable housing and small business in Greater East Liberty district (including East Liberty, Larimer, Lincoln-Lemington and Homewood).

At Tuesday’s commission meeting, Kamin said the LERTA has not yet been approved.

“We haven’t asked for subsidy,” Kamin said. If an abatement is granted, LG would make the 50 percent contribution as required, “a commitment that no other developer has made.”

Should the Planning Commission require housing developers include affordable units? After a December meeting on the proposal, Commission on Human Relations Executive Director Carlos Torres released a statement “urging members of the City’s Planning Commission to consider its fair housing obligations as it makes deliberations related housing and land use developments.”

“All development plans with a housing component must take into account whether the housing will effectively be made available to members of protected classes, not only in theory, but intentionally,” Torres wrote. “Housing developments that perpetuate segregation or that effectively exclude members of protected classes cannot be found to create a favorable social impact.”

The parklet

The public Enright Park became what TribLive described as a “bargaining chip” between the city and the developer in late 2015.

It’s a 2.2-acre site located near Penn Plaza with basketball courts, a playground and a cement whale with a functioning blowhole.

As part of the MOU, the city agreed to sell the land to the developers, a decision that birthed the Enright Park Neighborhood Association’s campaign to save the park.

In October 2015, the Planning Commission approved the rezoning of Penn Plaza and Enright Park for a mixed-use development. And in April 2016, Pittsburgh City Council voted to approve the zoning changes after the city announced that a replacement park would remain publicly owned.

Enright Park 2.0 as proposed by Pennley Park South

Enright Park 2.0 as proposed by Pennley Park South

Preliminary Land Development Plan

As part of the MOU, Pennley Park South is required to replace the 2.2-acre park with a 2.2-acre park. Commissioner Julie Butcher Pezzino asked Kamin about the requirement that it be “of equivalent size and function.”

While she conceded that the proposed replacement may be the correct size, Pezzino raised concerns about losing a basketball court and the narrowness of part of the replacement space.

“I’m thinking about function,” she said.

The Whole Foods

In July 2016, Whole Foods announced that it had signed a lease to anchor the redevelopment — located about two blocks from the store it opened more than a decade ago.

“We love the East Liberty community and are as committed to this neighborhood today as we were in 2002 when we first opened in the area,” Scott Allshouse, Whole Foods Market mid-Atlantic regional president, said in a press release. “This larger building will broaden our footprint, offer more parking and allow us to create new opportunities to surprise and delight our expanding base of shoppers in Pittsburgh.”

In that release, and in subsequent news stories, Whole Foods’ rep did not state whether the company would close the older location after the new one opens. The Incline sent a request for comment on that question, as well as a broader one on the future of the project in light of Tuesday’s vote.

That email was not immediately returned, and Kamin declined to comment on the deal after the commission vote.

That July 2016 press release also touted the developer’s plan to “start construction in the first quarter of 2017 on East Liberty Marketplace.”

That is now.