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Local companies in command of Fifth-Forbes development

By Ron DaParma
Sunday, January 8, 2006

Local developers finally hold the keys to unlocking the economic potential of Pittsburgh’s deteriorated Fifth-Forbes retail corridor.

That’s a good thing, says Arthur P. Ziegler Jr., president of Pittsburgh History & Landmarks Foundation, the preservationist organization that developed Station Square.

Ziegler has long advocated giving a variety of companies a role in developing the area in and around Fifth and Forbes avenues.

He applauds the fact that Washington County-based Millcraft Industries Inc., headed by members of the Piatt family, now has the lead in trying to find new uses for the former Lazarus-Macy’s department store, and that the J.J. Gumberg Co. of Braddock Hills owns and is spearheading efforts to redevelop the former Lord & Taylor department store building.

Ziegler also salutes Oxford Development Co.’s involvement in PNC Financial Services Group’s recently announced plan to build a $122 million office/hotel/condominium building along Fifth Avenue that will be home to Reed Smith, one of the city’s largest law firms.

“I think those are major steps and a breakthrough in efforts to develop Fifth-Forbes,” said Ziegler, who has suggested the city should copy a plan that helped Baltimore revitalize part of its downtown.

In Baltimore, an $800 million project driven mainly by private investment and fueled by historic preservation tax credits is being used to renew a 26-block area.

The city developed a package of buildings, specific uses and quality levels, and offered the packages to developers on the open market, he said.

If Pittsburgh’s leaders adopt a similar plan, more local and national developers might be persuaded to take a look at redeveloping pieces of Fifth and Forbes, Ziegler believes.

“This demonstrates the fact that there are other local developers who would possibly be willing to get involved in Fifth-Forbes if the opportunity were available,” he said, referring to the involvement of Millcraft, Oxford and Gumberg.

Three out-of-town developers have considered becoming the master developer for city-owned properties Fifth-Forbes, only to walk away, and now the private-led Pittsburgh Task Force is currently working with Madison Marquette, a company based in Washington, D.C., on a development plan for Downtown.

Ziegler has hopes that project also will be successful, but if it is not, then he believes the city should open up the field to other developers.

New Mayor Bob O’Connor already has said he would consider allowing other private developers to buy Downtown properties owned by the city’s Urban Redevelopment Authority if the Madison Marquette plan fails.

In the meantime, Pittsburgh History & Landmarks has offered to help the city preserve several deteriorated buildings Downtown, including 439 Market St., an historic three-story building off Market Square.

Last month, the city’s Historic Review Commission approved a plan to preserve the unique facade of the 130-year-old structure while demolishing a majority of the rest of the building.

The plan is for the city’s engineering and construction department to shore up the building’s side walls with bracing and put up a temporary roof and rear wall that would be replaced once a development plan is in place for the area.

Landmarks, which joined with the historic preservation group Preserve Pittsburgh to support partial demolition of the building, has offered the city a no-interest loan of up to $75,000 to help pay for the work.

Real estate notes:

Funding for construction of 15 second-floor, loft-style condominiums over retail space and rehabilitation of seven houses on Penn Avenue and North Fairmount Street in the city’s Garfield neighborhood has been approved by the Pennsylvania Housing Finance Agency. The project will get $660,000 in Neighborhood Revitalization funds. The agency also approved $2 million for Peebles Square in Wilkinsburg. These funds will be used to build 12 new single-family detached three-bedroom homes and to rehabilitate eight existing owner-occupied homes and create a regional park.

Construction activity in the six-county Pittsburgh region increased substantially in November compared to the same month last year. Total new contracts issued reached $178.3 million, a 94 percent increase over the $92.1 million a year ago, according to the Research and Analytics unit of McGraw-Hill Construction. For the 11-month period, total contracts issued reached $2 billion, an 11 percent decline from $2.26 billion for the same period a year ago.

The management office of Station Square, South Side, has relocated to Suite 317 in the Landmark Building, which is on the opposite side from where it was formerly located, said Tom Schneck II, Station Square’s director of marketing.

James P. Kelly, Grubb & Ellis vice president, has been given the job of finding tenants for the Mon Valley Community Health Center in Monessen, since the current occupant, Southwestern Pennsylvania Human Services Inc., plans to relocate 200 of its employees into the former Montgomery Ward building in Charleroi.

Wells Real Estate Investment Trust II Inc. has selected Jeremy Kronman and Tom McDonald of CB Richard Ellis/Pittsburgh to market 2000 Park Lane, a seven-story office building it purchased in North Fayette. Computer Associates International Inc., former owner of the building, will lease about 25 percent of the 231,213-square-foot building, and Fisher Scientific Co. LLC occupies about 64 percent. Brad Heming of Jones Lang LaSalle represented the seller, and Jeff Gilder of Wells Real Estate Funds represented the buyer.

Several members of Holliday Fenoglio Fowler’s Pittsburgh office participated in the sale by Simon Property Group Inc. of Cheltenham Square, a 638,098-square-foot regional shopping center north of Philadelphia. Thor Equities LLC paid $71.3 million for the property, plus assumption of an existing $54.9 million bank loan, and Chris Turner and Claudia Steeb with John Pelusi, executive managing director and managing member, were involved.

An office building at 100 Commercial St., in the Bridgeville Industrial Park, Bridgeville, has been sold by Proud Mary LLC to Great Lakes Warranty Corp. for $700,000, according to a deed filed in the office of Allegheny County Recorder of Deeds.
— Contributor: Sam Spatter

Ron DaParma can be reached at or 412-320-7907.

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This article appeared in the Pittsburgh Tribune Review © Pittsburgh Tribune Review

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