Buncher Plans Project for Strip District’s Fruit Auction Terminal Building

Pittsburgh Business Times – by Tim Schooley

Date: Thursday, December 9, 2010, 10:27am EST

In a bid to spark a transformational wave of development in the Strip District, Pittsburgh’s Urban Redevelopment Authority will vote on a plan to beat a path to the Allegheny riverfront this week through the red brick walls of the Pennsylvania Railroad Fruit Auction Terminal Building.

At its board meeting scheduled for Thursday, Dec. 9, the URA is expected to vote for the city to enter into an agreement in which it would lease the six-block-long building to the Buncher Co., giving the local development company an option to buy the property. A vote of approval by the mayor-appointed board is expected to provide Buncher with the opportunity to develop the building in tandem with a 75-unit apartment project on riverfront land Buncher owns behind the building, according to URA Executive Director Rob Stephany.

Stephany described the plan as a key move to kick-start development of approximately 55 acres Buncher owns that extend along Smallman Street and the Allegheny River from 11th to 23rd streets, a tract of largely undeveloped urban land he believed is as large as any of its kind in the country.

“The produce terminal is kind of at the end of its useful life. It needs to be part of something bigger,” Stephany said. “My gut tells me there’s a real strong appetite by the Buncher Co. to really begin this project in earnest.”

Calls to Buncher were not immediately returned.

Stephany said Buncher has demonstrated its commitment to push forward with development there by hiring MacLachlan, Cornelius & Filoni Inc. to handle the preservation and design for the renovation of the 130,000-square-foot terminal building, a project he estimated will cost from $7 million to $10 million. The redevelopment of the terminal building, now home to number of produce wholesalers as well as the Pittsburgh Public Market, which opened a few months ago, will serve as a gateway project that should allow Buncher to being to develop the 12 to 15 acres behind it that have been largely blocked from any new plans by the building.

The redevelopment will include building two access routes through the property, Stephany said, which he said was a requirement for making any new project behind the building viable.

“It’s so big and so long, if you did two penetrations to it, it’s almost negligible from an impact standpoint,” Stephany said, predicting the changes will concern preservationists.

Art Ziegler, president of Pittsburgh History & Landmarks Foundation, said his organization is supportive of the goal of redeveloping the building as well as establishing access through the building to enable development behind it, as long as that access is for pedestrians.

“We think that the building can be a landmark for the new project. It frames and defines the project,” Ziegler said. “We do not object to a pedestrian passage and maybe two. Our only objection is to make roadways (for cars) through the building.”

The building transaction is part of a larger collaboration between the city and Buncher. In the summer, the city reached an agreement with Buncher for a swap of properties that included the terminal building, a riverfront warehouse building in the 9th ward of Lawrenceville and the former Tippins steel property on the riverfront at the 62nd Street Bridge in Lawrenceville’s 10th ward.

Stephany said the URA continues to work with the building’s established produce wholesalers to identify potential new locations for them. He expects the building will be redeveloped for a host of office users, restaurants, studios and other uses, noting the terminal’s four-foot elevation above Smallman Street likely won’t work for retail. The infrastructure costs for the project have not yet been determined, Stephany said.

The URA also is working to establish a district for tax increment financing and redevelopment for the Strip District. Those proposals drew strong neighborhood criticism at a planning hearing on Dec. 7, and Stephany emphasized the TIF district and redevelopment zone are under consideration to improve the neighborhood’s eligibility for state and federal funds — and not for eminent domain.

Stephany said there is nothing in the city’s agreement with Buncher that guarantees the new Pittsburgh Public Market will remain in the building but that both the URA and Buncher are excited about its start and see it as part of a larger redevelopment plan. The time frame for Buncher’s development is not yet set.

“The end result of this isn’t going to be known for a while,” Stephany said.

Chuck Hammel, an owner of the nearby Cork Factory apartment building, described the URA’s plan to turn the terminal building over to Buncher as an important step in bringing new development to the neighborhood’s riverfront. One possible hurdle, he said, will be reaching a final agreement between Buncher and the Allegheny Valley Railroad over right-of-way issues, something Hammel hopes will be resolved for the good of everyone involved.

Hammel is working to develop a 90-unit apartment project near the almost fully occupied Cork Factory and said there is a steady influx of would-be tenants for more housing in the area.

“We have probably 20 to 30 people who look at the Cork Factory each week,” he said. “There’s a fair amount of out-of-town people being located here.”