Pittsburgh Post Gazette
Contact: Mark Belko 412-263-1262.
mbelko@post-gazette.com
January 15, 2010
East Liberty building site gets attention of developers for fifth time
By Rob Stephany's count, four developers have tried and failed over the years in bids to redevelop the historic Highland Building in East Liberty.
Mr. Stephany, the city's Urban Redevelopment Authority executive director, is hoping a fifth attempt finally will be the charm.
A team of developers led by Walnut Capital, the same firm redeveloping the former Nabisco plant in nearby Larimer, yesterday unveiled a $23 million proposal to put 130 market rate apartments and 10,000 square feet of street level retail into the Highland Building and two adjacent properties.
Walnut Capital and partners Massaro Properties and TKA Architects were selected by the URA over the team of Trek Development Group and Vista Host, which proposed a hotel project, to get the latest crack at redeveloping the long-vacant Highland Building, built 100 years ago by industrialist Henry Clay Frick.
Mr. Stephany believes they have a great shot at succeeding where others have failed, particularly given the emergence of a retail district that includes Whole Foods Market, Borders bookstore and Home Depot as well as a soon-to-come Target store.
"The market's really come to the building, finally," he said. "The building's not an island."
The URA board voted unanimously to give Walnut, Massaro and TKA an exclusive six-month negotiating period, with an option to add another six months, to develop architectural plans, a budget, and financing for the project.
While the team is requesting no public funding, the URA will be on the hook to develop a 140- to 145-space parking garage with an estimated cost of $4 million to serve residents and shoppers. All believe it is critical if the project is to be successful.
"For 20 years, developers have come and gone because they weren't able to get parking," said Robert Rubinstein, the URA's director of economic development.
In addition to the Highland Building, which is listed on the National Register of Historic Places, the development site consists of the Wallace Building and a former PNC bank.
Todd Reidbord, president of Walnut Capital, said he believes the apartments, mostly one-bedroom units, will be "highly desirable" to those who work at nearby hospitals and universities.
"Our vision for this property is really to bring residents to this area," he told the URA board.
Ernie Hogan, deputy director of East Liberty Development Inc., said there's currently a waiting list of about 200 people who are looking for market-rate apartments in the area.
"This totally supports that and goes in keeping with building a 24-hour district," he said.
One-bedroom apartments are expected to average 650 to 700 square feet. Two-bedroom units should average 1,000 square feet. Rental rates have yet to be determined, Mr. Reidbord said.
The development team hopes to complete due diligence and have financing in place in nine to 12 months. A 14- to 16-month construction would follow.
Mr. Reidbord said one of the key financing hurdles will be securing historic tax credits, which could cover up to 20 percent of the cost of converting the Highland Building, with 112 apartment units, and 10 percent of the Wallace Building, with 18 units.
"This doesn't get done without the tax credits," stressed David E. Massaro, president of Massaro Properties LLC.
Mr. Rubinstein said the biggest reason the Walnut Capital proposal was chosen over the one submitted by Trek was the residential component.
Adding 130 residential units to the core of East Liberty, he said, will mean "a transformation for that neighborhood."
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