Developer may pass up bid for Fifth-Forbes job

By Andrew Conte
TRIBUNE-REVIEW
Tuesday, May 9, 2006

Yet another national retail developer appears to be losing interest in Pittsburgh’s main retail corridor after spending months studying ways to bring the area back to life, Mayor Bob O’Connor said Monday.
Madison-Marquette, based in Washington, D.C., would become the fourth suitor to pass on remaking the area since 1999. A company spokesman declined to comment.

“I don’t think Madison-Marquette is interested any more in the project,” O’Connor said.

That would leave two local developers — Millcraft Industries in Washington County and a group headed by Pittsburgh businessman Ralph Falbo. O’Connor said he does not know of any other group seeking to redevelop the Fifth and Forbes corridor.

Shortly after taking office in January, O’Connor said he wanted to be “wowed” by Madison-Marquette’s proposal. But the city’s Urban Redevelopment Authority has been unable to set up a meeting for the company to present its plans to the mayor.

Herb Burger, who headed a task force that helped bring Madison-Marquette to Pittsburgh, said he would be disappointed if the company decides not to work on the project. He served on the Pittsburgh Task Force, a group created by former Mayor Tom Murphy.

“The Downtown market needs all the intelligent development it can get,” Burger said.

The city’s retail center has faced a series of setbacks dating to 1999, when Murphy dropped a $522 million proposal by Urban Retail Properties, of Chicago. The plan fizzled under pressure from existing Downtown businesses and historic preservationists.

Kravco Co., of King of Prussia, Montgomery County, took a shot at redevelopment next, but bowed out in January 2004 when it was bought by mall developer Simon Properties. A Philadelphia group, Dranoff Properties, studied the Downtown core for months before passing on a bid to redevelop it last summer.

In the meantime, two department stores — Lord & Taylor and Lazarus-Macy’s — failed despite receiving large public subsidies to open Downtown locations.

Millcraft’s plan for Downtown includes a $269 million project with 852 housing units, 200,000 square feet of retail space and 45,000 square feet of office space. The proposal includes Piatt Place, a $49 million renovation of the former Lazarus-Macy’s department store already under way.

The developer wants an exclusive deal to develop 19 URA-owned properties in time to make a May 24 presentation at the International Shopping Center Convention in Las Vegas.

“We need time to prepare for that convention,” said Lucas Piatt, Millcraft’s vice president of real estate. “It’s really close. We might lose a year.”

Falbo has proposed a $75 million to $100 million development that would place a food market on the first floor of the former G.C. Murphy Co. building and up to 40 rental and/or condominium units above.

“The difficult part is how big, national firms look at it — as a one-shot deal to do the whole corridor,” Falbo said. “I happen to think it’s going to take a lot of work. This is not developing a mall in the suburbs.”

Andrew Conte can be reached at aconte@tribweb.com or (412) 320-7835.