Oct. 16--With PNC Park and Heinz Field open and the new David L. Lawrence Convention Center two-thirds complete, the Sports & Exhibition Authority is focusing on two new projects -- a hotel next to the convention center and a North Shore parking garage between the stadiums. 

The goal is to have the 500- to 600-room hotel at Penn Avenue and 10th Street under construction by summer, and the new garage, with 900 to 1,000 spaces, completed by late 2004, Stephen Leeper, director of the city-county agency, said yesterday. 

In the spring, Leeper said, Frank Kass, chairman of Continental Real Estate Cos. of Columbus, Ohio, will begin building on one or more of the vacant North Shore parcels, which contain several hundred parking spaces used by commuters and sports fans. 

Kass said he expects to begin construction on as many as four new buildings -- two for offices and two with apartments, with retail space on the ground floors. The office buildings would house "corporate headquarters-type stuff," he said. Each of the buildings will have six, seven or eight stories. All will be located between the stadiums and between the Allegheny River and North Shore Drive. 

The Steelers could begin work next year on a new riverfront amphitheater on a North Shore Drive parcel just east of Heinz Field, a project that would wipe out several hundred more parking spaces. 

Those construction projects "make it urgent to replace the parking spaces that will be lost," Leeper said. He and Kass spoke yesterday Downtown at a riverfront development forum sponsored by the Urban Land Institute. 

The sports authority has already picked a location for the new parking garage: a Y-shaped parcel along General Robinson Street, directly below existing eastbound and westbound ramps leading from the Fort Duquesne Bridge. 

Kass agreed on the garage location, saying it isn't an attractive site for an apartment building or offices because the highway ramps obstruct views of the riverfront. 

Leeper couldn't give a cost estimate for the new garage, but said it cost $27 million to build the 925-space garage on General Robinson, just east of PNC Park. That is in addition to $54 million that the sports authority has spent on infrastructure on the North Shore, including new roads and moving North Shore Drive 50 feet farther from the riverfront to allow for development. 

One reason the garage cost so much, he said, was because sufficient entrances and exits were needed to accommodate pregame and postgame traffic. The authority also spent money on a facade to make the garage attractive because of its prominent North Shore location. 

As for the convention center hotel, Leeper said he's still talking with Forest City Enterprises of Cleveland, owner of the nearby Westin Convention Center hotel and Station Square, as a potential developer. 

But he disclosed that an alternative financing proposal is being explored -- creating a nonprofit agency that could float tax-free bonds to use in building the hotel, which is expected to cost $100 million to $120 million, depending on how many rooms it has. 

Leeper said that one such nonprofit agency, one based in Dauphin County in Central Pennsylvania, arranged financing for the 300-room Hyatt Hotel at Pittsburgh International Airport. He said hotels in Chicago, Denver and Austin, Texas, have also been built by such nonprofit agencies. 

One advantage is that using tax-free bonds can help hold down the cost of financing. A disadvantage is that city and county property taxes can't be collected on the hotel. 

Leeper said some property taxes would likely be forgone even if a private developer like Forest City is chosen to build the hotel. The sports authority is likely to use tax increment financing, in which future property tax revenues are diverted from city and county coffers to help pay off bonds sold to build the project. 

To ensure the success of the new $354 million convention center, a large supply of nearby hotel rooms is needed. 

Leeper said he hopes to have as many as 1,400 rooms adjacent to the new center: the existing 615 rooms at the Westin, 500 to 600 rooms at the new convention center hotel and nearly 200 more at a small hotel that Oxford Development Co. plans to create out of four existing buildings on Penn Avenue, between Ninth and 10th streets. 

Leeper said the state Legislature still has to act on a new 3 percent tax on car rentals in Allegheny County as a way to raise sufficient funds to both build the hotel and subsidize operations at the convention center. He hopes the Legislature will act in November. 

City officials originally wanted to have the new hotel ready when the convention center is fully open in April, but problems with design and financing have slowed its progress. 

The new hotel would be physically linked to the convention center on its Penn Avenue side, which could affect activity at the center. 

"We think we can build it so that it won't hurt the operation of the convention center," Leeper said. 

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(c) 2002, Pittsburgh Post-Gazette. Distributed by Knight Ridder/Tribune Business News.