Conflict of Interest Note: The author has a conflict of interest. He is on the McKees Point Development Group. See previous coverage of this issue and the note at the end of this story.
An architect's rendering depicts the former Penn-McKee Hotel as part of a shopping and entertainment district attached to McKeesport's waterfront. (Nina Chase/Merritt Chase Architects via Young Preservationists Association of Pittsburgh)
Download sections of the marketing and feasibility study (PDF reader required)
Up to $141 million in tourism money that could be spent in McKeesport is leaving the area, and at least part of that could be captured along the city's riverfront if the right attractions were in place.
That's according to a study of the area around the Penn-McKee Hotel that was done for city officials by the Young Preservationists Association of Pittsburgh.
The report concludes that reusing the long-vacant hotel is "costly" but feasible, and recommends that funds be raised to mitigate environmental problems, prevent the building from further deterioration, and make it more presentable to investors.
The study was released Tuesday night during the regularly scheduled city council meeting and is available for viewing at the mayor's office.
McKeesport Mayor Michael Cherepko said the YPA's report has already attracted interest from one developer.
"We had one proposal for approximately $13 million to $14 million for housing, but that area is no longer zoned for housing and it was not part of our vision," he told council. "We have other people knocking on our doors as well."
The study's authors --- Matthew Craig, executive director of the Young Preservationists, and Doug Skowron, a Pittsburgh real estate developer --- ask "does it make sense to save the Penn-McKee Hotel, and will it be cost-effective to do so?" The answer to both questions, they conclude, is a qualified "yes."
Redeveloping the Penn-McKee, they write, "is costly," especially for use as a hotel, and should only be considered as part of a larger strategy to improve the area around the McKees Point Marina, the Palisades ballroom and the Great Allegheny Passage hiking-biking trail.
"The reuse of the Penn-McKee can serve as a launch pad for further planning and redevelopment of the Fifth Avenue commercial corridor," the study says.
The authors' recommendations for the neighborhood include re-connecting Strawberry Alley, Sixth Avenue and Seventh Avenue to Water Street (Joe Bendel Way). The streets are currently fenced off and used for boat storage.
An environmental cleanup of the Penn-McKee site would cost about $500,000 and a full restoration of the building would cost roughly $13 million, the study says. It notes that a more limited re-use of only two floors would cost around $4 million.
Jennifer Vertullo, assistant to McKeesport Mayor Mike Cherepko, presented the study to council members and encouraged them to review it.
She said the report has a "strong focus on retail and hotel service for area residents" as well as for visitors to the trail, marina and Palisades, as well as UPMC McKeesport hospital and Penn State Greater Allegheny.
"Fifth Avenue is an area of our city that often gets forgotten as we make strides in economic development," Vertullo said. "Now, we have an increased interest in Downtown property with the Tube City Center at the former Daily News building, the People's Building and several vacant parcels where development is set to take place."
Vertullo is one of the members of the McKees Point Development Group, a volunteer committee convened by Cherepko that also includes Angelia Christina of the McKeesport Housing Authority; Shaun Kennedy, owner of Barrier Protection Systems; Michele Matuch, retired executive director of the McKeesport Hospital Foundation; James R. Miller, an attorney and insurance broker with ties to the city; Mark O'Hern, CEO of UPMC East and UPMC McKeesport; A.J. Tedesco, the city's community development director; and Jason Togyer, executive director of Tube City Community Media Inc.
Vertullo told council that the group has obtained a corporate charter and two weeks ago was ruled a tax-exempt charitable corporation by the Internal Revenue Service.
To raise awareness of the potential along the city's riverfront, the development group on May 24 held a free concert at Gergely Park featuring a local group, The Seams. The next concert is scheduled for Friday and will feature Johnny Cardo at 6 p.m. and Mark Rose, formerly of The Spitalfields, at 7 p.m., Vertullo said.
About 200 people attended the Seams concert, Cherepko said.
The study lists a variety of local, state and federal sources for funding that could be leveraged to rehabilitate the Penn-McKee, including the county's Community Investment and Tourism Fund, federal tax credits, the state's Redevelopment Assistance Capital Program and the newly created Federal Opportunity Zone Program.
In addition, the study recommends outreach to foundations and financial institutions that invest in economically distressed areas.
But Craig and Skowron caution: "The path to reuse of this site will not be a short one."
The Penn-McKee, they note, "has sat vacant for 25 years. Generating the momentum and the $12-million-plus of funding to finance renovation will take at a minimum two years. Funds are needed for project management and to develop budgets based on architectural and engineering evaluation."
And, they write, "asbestos abatement will need to occur before any renovations can begin" but add that completing that work --- as well as any interior demolition --- will make the building "much more presentable to potential users or investors."
"There's been a lot of buzz surrounding the report on social media because the Young Preservationists announced its completion," Vertullo said.
City officials did not want to release the study publicly until it was presented to council, she said.
She encouraged council or residents to contact Cherepko's office for additional information or to discuss the report's funding.
Vertullo also noted that the McKeesport Regional History & Heritage Center has scheduled a panel discussion for June 29 called "The Past, Present and Future of the Penn-McKee Hotel" to talk about the report.
Jason Togyer is editor of The Tube City Almanac and volunteer executive director of Tube City Community Media Inc. He may be reached at firstname.lastname@example.org.
CONFLICT OF INTEREST: The author is a member of the McKees Point Development Group, mentioned in this story. No one associated with the city or the group reviewed this article prior to publication and neither the city nor any employee has any editorial control over Tube City Almanac. This article was held until after the public release of the report to all media outlets.
Originally published June 05, 2019.