Newest Fifth-Forbes plan built on housing – Retail still present but scaled down

By Mark Belko,
Pittsburgh Post-Gazette
Thursday, January 20, 2005

The latest attempt to inject life into the downtrodden Fifth and Forbes shopping corridor Downtown will include lots of housing and some street-level retail, but not nearly as much as in previous proposals, Pittsburgh Mayor Tom Murphy said yesterday.

During a Rotary Club of Pittsburgh speech at the Omni William Penn Hotel, Murphy said he expects the newest plan aimed at reinvigorating the faltering retail district to be formalized within the next few weeks.

It is one of two major Downtown development pieces that could get renewed focus in 2005, Murphy’s last year in office.

Murphy also said he expects, by the end of the month, an agreement in principle with Cleveland developer Forest City Enterprises on the construction of a $104 million, 500-room hotel adjacent to the David L. Lawrence Convention Center.

Murphy said the latest make-over of properties along Fifth and Forbes avenues will be quite different than the retail-laden plan he unveiled nearly eight years ago, one that collapsed amid objections from Downtown property owners and the loss of Nordstrom, the proposed department store anchor.

The mayor said the newest version will be heavy on residential — up to several thousand new units — with ground-level retail serving as a complement.

One reason for the de-emphasis of retail, Murphy said, is that many of the major retailers or restaurants that had been considering Downtown have since chosen other locations, such as the SouthSide Works or The Waterfront in Homestead. One he mentioned was The Cheesecake Factory, which ended up at the SouthSide Works complex.

“I think we’re feeling more optimistic than we’ve felt in awhile,” Murphy said of the Fifth and Forbes project. “I think we had a window to do retail and I think that’s gone now, I mean, [as] a significant dominant driver of the deal. There’s still going to be retail — I expect mostly all the first floors to be retail — but the focus will be more on housing.”

While Murphy’s original proposal involved extensive demolition of existing buildings, many of which Pittsburgh History & Landmarks Foundation officials considered historic and worth saving, the mayor said there would be an effort to preserve some buildings under the new plan.

Herb Burger, the Pittsburgh Downtown Partnership founder who is heading the ad hoc committee putting together the latest Fifth and Forbes initiative, said the intent is to preserve as many historic buildings as possible.

“Nobody’s interested in destroying beautiful buildings where they exist,” he said.

The committee’s work is being driven primarily by private interests, which banded together after Murphy’s first plan and a subsequent initiative collapsed.

Burger said most of the residential component would be concentrated in lower Fifth Avenue, from the vacant Lazarus-Macy’s department store to Liberty Avenue, and would involve a number of city Urban Redevelopment Authority properties acquired for development purposes. One of the buildings that is expected to house residential units is the old G.C. Murphy’s store near Market Square.

Burger’s committee is working “hand and glove” with Philadelphia residential developer Carl Dranoff on the latest plan.

Burger said the earliest phases of the project would feature 600 to 800 residential units, with expansion from there. The retail would be “complementary,” geared toward meeting the needs of Downtown residents, such as groceries and dry cleaning.

The Murphy administration wants to give Dranoff a chance to develop a comprehensive plan for the corridor before considering other approaches, including the possibility of selling off URA-owned properties.

Both Murphy and Burger believe that there’s a better chance of doing quality development if a developer has a large bank of properties to work with.

Federated Department Stores, the owner of the closed Lazarus-Macy’s, also has been open to a series of possible investors. But Burger said that to date he did not know of any sale or resolution of that property.

As for the convention center hotel, Murphy and Allegheny County Chief Executive Dan Onorato have set an end-of-January deadline for finalizing an agreement with Forest City on the hotel, which has been stuck in neutral for nearly two years.

Murphy said he is optimistic about getting an agreement, noting that Forest City and the city-county Sports & Exhibition Authority “are down to very few issues,” most of them involving design or minute contractual details.

“The broad parameters of the deal we all agree on,” he said.

If no agreement is reached, the city and county could end up rebidding the project, but Murphy said that is currently not under consideration.

“There would have to be substantial and irreconcilable differences for us to proceed to [rebid it] because we’ve come so far on the deal at this point. It’s been a lot of years of discussion,” he said.

The hotel project was stalled for a long time because of funding shortfalls. But that changed when the state Legislature earmarked $44 million for it from a $2 billion tourism and economic development fund to be financed through slot machine gambling revenues.

(Mark Belko can be reached at mbelko@post-gazette.com or 412-263-1262.)