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Big ideas

By Andrew Conte
Tuesday, May 23, 2006

The developer selected to revive Downtown has bigger ideas than previously disclosed.
Millcraft Industries’ sweeping $270 million vision includes reviving Warner Centre as a nightclub, putting a playground at Market Square and adding boutique offices, lofts and a three-story bookstore along Wood Street.

The company eventually would like to extend a trolley line to Oakland, the North Shore and South Side Works.

The Washington County developer is pitching its ideas this week at the country’s leading retail convention in Las Vegas. Its proposal includes nine locations within a five-block area of Downtown.

“Those are things we want for Pittsburgh,” said Lucas Piatt, Millcraft’s vice president of real estate.
The first phase, a $51.7 million renovation of the former Lazarus-Macy’s building into Piatt Place, includes a high-end grocer and national chain restaurant on the first floor, condominiums and offices above, and townhomes on the roof.

The lobby and model apartments are scheduled to open Wednesday, in time for an evening Downtown walking tour.

“The feeling is about as positive as it’s ever felt,” said Don Carter, president of Urban Design Associates, a Downtown company hired to propose overall changes for the business district. “It’s no longer a plan. Now we’re getting projects built. … The momentum is building.”

Millcraft first unveiled its plan in a private meeting with Mayor Bob O’Connor last month, but officials did not make the details public. The proposal extends beyond projects Millcraft already has committed to — and includes properties it does not yet own.

The development would take place in three phases and, when completed, would include 852 condominiums and apartments, 1,203 parking spaces and nearly a half-million square feet of retail and office space — about the size of Parkway Center Mall or Two PNC Plaza, Downtown.

Under the plan, cars and trucks could no longer drive through Market Square, where Millcraft proposes installing dancing fountains and a children’s playground. The company suggested holding a naming contest for the area and giving a scholarship to the winner.

“What we’re doing is trying to create the 89th neighborhood in Pittsburgh, which is what Downtown really is,” said Ira Morgan, a local developer who has partnered with Millcraft in a group called Downtown Streets Pittsburgh LP.

After seeing the proposal, O’Connor recommended the partners get exclusive rights to purchase 19 Downtown properties owned by the city’s Urban Redevelopment Authority. The company has a temporary agreement with the URA, allowing it to market the properties to potential tenants, said Brian Walker, Millcraft’s chief financial officer.

The group has offered two proposals for the URA properties: Either acquiring title to the properties and then sharing profits with the city, or entering into a long-term lease with the option of buying the properties later. A third option combines the two.

The URA will consider all of the options at its June 8 board meeting.

“We’re not asking for city or county subsidies,” Walker said. “We’re not asking for the properties for free. We want to pay back fair market value to the city for their investment. They’ve had to spend money to get those properties. Now it’s time for us as developers to come in and finish the job.”

Millcraft’s second phase includes three projects, mainly involving the URA properties: Market Place Square, a renovation of the former G.C. Murphy’s building; Forbes Village, a building with apartments and first-floor retail space; and Piatt Place Apartments, next to the former Lazarus-Macy’s building.

A third phase was undisclosed until now. It calls for turning Warner Centre into a film and entertainment complex, adding loft apartments next to the theater, building a $6.5 million three-level bookstore at the corner of Forbes Avenue and Wood Street, and putting boutique offices — smaller structures with high-tech amenities — across Wood Street.

Millcraft does not own all of the buildings it would need for phase three, but is talking with property owners about joint ventures, Walker said. It has not yet approached JJ Operating Co., the New York firm that owns Warner Centre, a theater turned into an office complex and food court in 1985.

“We don’t turn anybody away,” said Gary Roberson, a broker with Grant Street Associates-Cushman & Wakefield, which manages and leases office space at Warner Centre.

“If it were revived as a theater, it would help become a traffic generator,” said Arthur Ziegler Jr., president of the Pittsburgh History & Landmarks Foundation.

A final conceptual phase of Millcraft’s Downtown plan includes a $76 million college housing and retail complex on Forbes Avenue for Point Park University. The school already has started a separate student housing project and has not committed to Millcraft’s proposal, a spokeswoman said.

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