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City Neighborhoods
Pieces falling into place for new hotel Downtown

Tuesday, June 04, 2002

By Tom Barnes, Post-Gazette Staff Writer

Oxford Development Co.'s plan to create a 182-room, "moderately priced" hotel on Penn Avenue from four buildings near the new convention center took a significant step forward yesterday.

The Sports & Exhibition Authority board approved the sale -- for $825,000, plus moving expenses -- of a building it owns at 951 Penn Ave., Downtown, to Penn Avenue Hotel Limited Partnership, an Oxford subsidiary.

Oxford President David Matter said his firm already controlled three buildings next door on Penn that it needed to create the hotel, which could open by November 2003 and rent rooms for $100 to $110 a night.

Oxford will close on all four buildings later this month and expects to begin renovation work late next month or early in August.

Matter didn't have a total price for the hotel project but said his firm expected to complete the necessary private financing this month. The hotel will be part of a "nationally recognized" chain, but he wouldn't divulge the name.

He said the four side-by-side buildings at 945, 947, 949 and 951 Penn were attractive for a hotel because of their proximity to the David L. Lawrence Convention Center, which is expected to attract many more conventioneers than the former center, and because they are within the Downtown cultural district, which draws many people to theaters and other attractions.

The new hotel "will fill a niche in the Downtown hotel market," said Matter, who was the top aide to former Mayor Richard Caliguiri in the late 1970s and most of the 1980s.

Sports & Exhibition Authority spokesman Greg Yesko said the hotel was a dividend of the public investment in the $354 million convention center.

"We certainly need the additional hotel space," Yesko said. "The new convention center is driving a demand for hotel rooms."

He said some authority-related operations, such as the offices of convention center architect Rafael Vinoly, and the offices of contractors working on the project, including Turner Construction Co., will have to move out of 951 Penn. He wasn't sure how much that would cost.

Yesko declined, however, to say anything yesterday about an even bigger project: a proposed 500- to 750-room hotel that officials would like to see built at Penn and 10th Street, a key site that's adjacent to the convention center.

That hotel, estimated to cost $90 million to $110 million, is seen as a major step toward capitalizing on the convention center by generating many more visitors.

Many groups have said they wanted to have a large hotel right next to, or possibly attached to, the convention center in order to consider Pittsburgh as a site for their conventions.

So far, however, disputes over its design that have gone on between local officials and Forest City Enterprises, owner of the nearby Westin Convention Center hotel, have kept the large hotel from progressing.

Another problem is financing, with county Chief Executive Jim Roddey still looking for state funds to increase the public subsidy for the hotel to between $20 million and $30 million.

Officials had hoped the large hotel would be ready by March, when all of the convention center is completed, but that won't happen because of design delays and financing problems.

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