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Release Date: Tuesday, April 26th 2011

Post Gazette: What's up with Downtown? Key sites are in limbo.

One is a fenced-in vacant lot next to the halls of power. Another is a once majestic banking hall stripped of its grandeur and purpose. A third is a one-time Downtown night spot still empty eight years after last call.

For every property that has been transformed Downtown, there are those still in need of work. Some can't attract development money. Others are waiting out the economy. A few are a step away from a new start.

They range from the Lord & Taylor building, a historic bank whose elegance was lost to failed redevelopment a decade ago, to the site of the former jail annex on Ross Street, where a proposed $32 million hotel project has been on hold for the past three years.

Others blemish the Golden Triangle like pockmarks: A run-down section of Forbes Avenue between Wood Street and Market Square; a vacant lot on Fifth Avenue next to the redeveloped Lazarus-Macy's building; the former Froggy's restaurant on Market Street; and the empty State Office Building near the Point.

The Lord & Taylor building has been shuttered since November 2004, when the department store closed its doors because of declining sales.

Four years earlier, former Mayor Tom Murphy enticed Lord & Taylor to set up shop in an elegant Mellon Bank building at Fifth Avenue and Smithfield Street as part of his effort to revitalize the commercial corridor. The city sank $11.8 million into the deal, turning the bank's majestic interior, with its marble columns and floors, into a nondescript multilevel department store, much to the dismay of preservationists.

The property is now in the hands of the J.J. Gumberg Co., the Forest Hill developer that purchased the building in February 2005 for a mere $2.5 million. It has been empty since then.

While Gumberg came in hoping to land a department store or general merchandise retailer like Target, that has not happened. At one point, the developer had marketed the "Shoppes at Smithfield," something akin to minimall, on its website, but to no avail.

For the past few years, the building has sat stone-faced on Smithfield Street, next to department stores Saks Fifth Avenue and Macy's. If Gumberg has any plans for the structure, it isn't saying. A representative did not return phone calls.

Yarone Zober, chief of staff to Mayor Luke Ravenstahl, said the city was not aware of proposed reuse for the building.

One of the city's goals is to attract a third retail anchor Downtown to supplement Saks and Macy's. Mr. Zober believes that the Lord & Taylor building would be the perfect spot for such a tenant.

"I think at this point that should be the strategy for the Lord & Taylor building. I don't think it can be converted into residential," he said.

About half a dozen blocks away, Froggy's, a legendary Downtown hot spot that once drew the likes of Mario Lemieux, Howard Cosell and Jack Nicholson, stands mute, except for the no-trespass warnings posted on the facade. It's a stark contrast to the days the restaurant was packed to the rafters with revelers, some spilling onto a rooftop deck, where bands played into the night.

Froggy's closed in March 2003, and there has not been a happy hour since. Troy Development Associates, a company formed by Downtown restaurateur and parking operator Julius Troiani, bought the property for $344,250 in 2004. His family still owns it.

At one time, Mr. Troiani, who died last year, considered converting the building and several other adjacent properties into student housing or apartments with first-floor retail.

His son, Michael, said last week that the family still had an interest in doing so or in using the property for some other purpose when the time is right. "We're just waiting for the right purpose. Once you have a purpose, the work is easy," he said.

Mr. Troiani said he received calls once a week from someone interested in buying the building. Right now, it's not for sale, in part because of the family's other property holdings in the area.

"To sell that one property would not be something we're interested in," he said.

At the site of the former Allegheny County Jail Annex on Ross Street, developer Kratsa Properties proposed building a $25 million, 156-room Hilton Garden Inn nearly three years ago.

But the Harmar builder, which bought the property for $1.55 million, has yet to deliver. Today, visitors looking to check in or dine at a proposed first-floor restaurant will find a fenced-in vacant lot instead, directly across the street from city hall.

Kratsa representatives did not return phone calls. However, Dennis Davin, the county's economic development director, said the firm had had trouble securing financing for the project. It hopes to see a break in that later this year, he said.

"They've spent a lot of money, so they have great incentive to get it started as quickly as they can," he said.

Mr. Davin added that Kratsa was still committed to the work. "There's no doubt they're going to do it," he said.

Not every redevelopment hole to be filled is as deeply in limbo.

Perhaps one of the more intriguing ideas for reuse involves a vacant lot owned by the city Urban Redevelopment Authority on Fifth Avenue, next to Piatt Place, the former Lazarus-Macy's department store, at the corner of Fifth and Wood Street.

Millcraft Industries, the Washington County developer behind the Piatt Place redevelopment, has talked to the URA about building an automated parking garage at the site.

Lucas Piatt, Millcraft's chief operating officer, said the garage would use robotics to stack and store cars while their owners are working or shopping.

Mr. Piatt believes that the garage would be the first of its kind in Pittsburgh. He said it would be a perfect use for the long and narrow lot that once housed a Revco drugstore.

"We think there's enough demand to support it, and we think it would be a great showcase for technology," he said.

Mr. Zober, the URA board chairman, said the agency was "very open" to the idea. "We're open to any discussions about the use of that relatively small site," he said.

Millcraft also has plans for two other sites in need of redevelopment -- the former State Office Building on Liberty Avenue, near Point State Park, and the south block of Forbes between Wood and Market Square.

The developer bought the 16-story State Office Building overlooking the Point for $4.6 million in 2009, drawing objections from state Auditor General Jack Wagner, who argued that the price was too low and the deal was a bad one for taxpayers.

As part of the transaction, state employees were moved to leased space in other Downtown office buildings, including Millcraft-owned Piatt Place. As a result, the State Office Building has been empty for more than a year.

But Mr. Piatt said that was about to change. He expects work to begin within the next month on a $45 million project to convert the structure into 218 apartments, with two-story townhouses on the top floors.

Millcraft hoped to get final approval from the U.S. Department of Housing and Urban Development on the financing for the project last week, clearing the way for construction. The first units should be completed eight to 10 months after work starts.

A short walk away, in a run-down section of Forbes, Millcraft is pitching a plan to replace a series of URA-owned properties, including a vacant lot, a variety store, a record store and the George Aiken restaurant, with a $70 million, 15-story high-rise.

It would feature a 175-room Hilton Garden Inn, office space, parking and street-level retail. Mr. Piatt said Millcraft was trying to complete design and lock up financing for the project. "Our goal is to get started by the end of the year, if possible," he said.

Millcraft wants to have the high-rise finished by mid-2013.

While it might not technically qualify as redevelopment, one Downtown landmark could also be undergoing a makeover of sorts.

The 13-story Macy's building, the one with the famous clock, has been for sale for nearly a year. While the store itself will stay in the Smithfield Street building even if it is sold, shoppers could see fewer floors available for browsing.

Macy's has already started the work by shutting down the seventh floor and consolidating home and houseware merchandise on the sixth floor.

Spokesman Jim Sluzewski said more consolidation would be "in the cards at some point but we just don't know what it will look like yet." Much will depend on what space a buyer or someone leasing floors might need.

"We are keeping ourselves flexible. We're exploring options for the building," he said. "We want to make sure that store is the right size for the customer and make it as convenient as we can."

And finally, there is the woebegone construction -- or lack of it -- at the former Hilton Pittsburgh. For nearly two years now, the work has been stalled because of financial woes at the bankrupt hotel, leaving visitors to gaze at a rust-colored structural steel frame as they drive into Downtown.

Could this be the year an eyesore becomes an asset?

It could all depend on whether the hotel's creditors approve a plan that would bring the property, now known as the Wyndham Grand Pittsburgh Downtown, out of bankruptcy. A confirmation hearing is scheduled May 12.

Money has been set aside in the plan to finish the work. Construction should take about 10 months, said Frank Amedia, the hotel asset manager.

"Obviously, we're in a holding pattern waiting for plan confirmation," Mr. Amedia said. "That's where all the focus is right now. Then we'll be able to shift over to [construction]."

Given the history of the project, it might be best to keep your fingers crossed, too.


Mark Belko: mbelko@post-gazette.com , 412-263-1262.


Read more: http://www.post-gazette.com/pg/11114/1141330-53-5.stm#ixzz1KeCjBq84

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