- Associated Press - Tuesday, May 6, 2014

PITTSBURGH (AP) - The state attorney general and a redevelopment authority are urging a judge to reject the proposed sale of the bankrupt August Wilson Center for African American Culture to a New York developer that wants to put a hotel on top of the building.

Both Attorney General Kathleen Kane and the Pittsburgh Urban Redevelopment Authority said in court documents filed Monday that a sale to 980 Liberty Partners would violate deed covenants that require that the building be used as a center for African-American culture and bar changes to the exterior without the development authority’s approval.

Kane said the covenants related to the center’s use as an African-American culture center “go to the very mission and purpose for AWC’s existence” and the developer’s proposal lacks detail to its use as a cultural center.

The documents were filed after a court-appointed conservator last week asked a judge to approve the sale to the developer, which submitted a $9.5 million bid.

The center, named in honor of the late Pulitzer Prize-winning playwright, who grew up in Pittsburgh, opened in 2009 and hosted jazz concerts, plays, dance, art exhibits, films and other cultural events but was hampered by construction costs and poor attendance. A judge recently approved selling off its downtown building to settle a mortgage default and other debts totaling about $10 million.

Conservator Judith Fitzgerald, a former bankruptcy judge, said in an interim report that the developer’s bid could be “very attractive to the city, the county and the African-American community in Pittsburgh,” because the proposed commercial addition could subsidize arts-related programing. Fitzgerald said the developer is offering free gallery, office and storage space to the center, which would be able to use the theater for at least 120 days a year at a nominal fee.

Dollar Bank, the primary mortgage holder, has argued that some of the covenants ended when the building was completed, but the development authority said those relating to use and exterior alterations run until June 2021.

The development authority favors a lower bid submitted by the several foundations, and Kane also said they were the only bidder committed “to continuing the mission of African-American culture” in compliance with the covenants. The foundations withdrew their bid last month, saying it was clear that the highest offer was favored, but the mayor and county executive have urged them to remain in contention.