Pittsburgh Business Times
Sharing the wealth
SouthSide Works, Walnut Street vie for city's upscale retailers, shoppers
Tim Schooley
January 10, 2005

For years, upscale shopping within the city of Pittsburgh has often been the retail equivalent of a clown car.

Think of the four short blocks of Walnut Street in Shadyside as an old Volkswagen. Then try to cram every well-known retailer you can think of into its limited space.

"There are retailers that want to come to the street that we just don't have the space to accommodate," said Tony Dolan, a principal of Walnut Capital Partners, which owns some key property on Walnut Street.

"Had there been more space zoned commercial, I'm sure the whole street would've been able to fill up with retailers."

The city's most upscale shopping neighborhood continues to thrive despite its limitations. However, now major retailers have another choice in the city.

While Downtown retail continues to languish and Station Square functions more as a haven for nightlife, Shadyside and the rest of the city are witnessing new upscale retail emerging at SouthSide Works. With new construction making available large floor plates, giving major retailers the space they need, SouthSide Works is drawing the kinds of high-end and new-to-the-market retailers that once would've considered only Walnut Street.

Just this week, the Soffer Organization, the developer of SouthSide Works, confirmed the leasing of two new retailers that in another time might have been more likely to set up shop in Shadyside.

Those include a Steve Madden shoe store, which will open next door to an already open Urban Outfitters location within the building that houses the 10-screen SouthSide Works theater. Also confirmed by the Soffer Organization is BCBG, a fashion retailer led by Max Azria. Cole Haan, a high-end leather retailer, is also expected.

Are the two shopping districts shaping up to be new competitors for both retailers and shoppers, along with the city's limited retail dollar?

Principal Damian Soffer has consistently marketed the project using Walnut Street as a retail status quo from which his SouthSide Works will be different.

"Ten years ago, Walnut Street was a combination of nationals and locals," said Mr. Soffer, in a prepared statement. "Now, it is primarily national and doesn't have the same flavor that we are trying to create." Mr. Soffer admits the two retail districts are very different types of developments. One is an established city neighborhood that has taken shape gradually over time; the other is ground-up construction of a mixed lifestyle community, with both new residential homes and larger-scale stores sized to contemporary selling space needs.

"We have responded to what we believe is a real hole in the market and are doing our best to retain young people in Pittsburgh with a lifestyle development, not just shopping," said Mr. Soffer.

Of course, close observers will note there are plenty of chain retailers at the SouthSide Works.

Privately, at least one Walnut Street retailer noted how Mr. Soffer has been attempting to woo some of Shadyside's mix of retail tenants to his project. They also note the public subsidy the SouthSide Works has received, both in the parking garages provided and for preparation of the site.

Mr. Soffer was unavailable for further comment.

So far, look for at least three retailers to offer stores at both projects within the next year -- providing opportunities to compare the sales strength of both retail centers. Italian fashion chain Benetton, a Walnut Street staple, is opening at SouthSide Works, as is its shopping sibling Sisley. Word has it that Ann Taylor, another Shadyside standby, also is coming to the SouthSide Works development. And a local independent, Roberta Weissburg Leathers, has opened a new store at SouthSide Works to complement her Shadyside location.

Ms. Weissburg is bullish about the prospects of both neighborhoods given her willingness to pay rents at both locations, where local brokers say it costs more than $40 per square foot, among the city's highest.

Having operated her store on the South Side several years ago, she admitted that, "a big part of my decision was I would pull my South Hills customers back."

While not a store that had any designs on Walnut Street specifically, REI's decision to go to SouthSide Works was a big win for the Soffer Organization, considering that Mayor Tom Murphy was touting the coveted outdoor recreation outfitter for the East End.

Harry Levine, the outgoing president of the Shadyside Chamber of Commerce, doesn't fret that retail is beginning to realize its potential at SouthSide Works.

An architect, Mr. Levine was conspicuously on-message in touting Shadyside's ongoing strengths.

"We're virtually fully leased. And we're pulling the highest dollars per square foot rentals in the Pittsburgh area. We're surrounded by the most highly educated, most affluent demographic, which also assists Walnut Street in being a premier shopping location," he said.

Indeed, Walnut Street has added some high-profile tenants in the past year. They include a large new J.Crew store, the region's only Apple computer store and L'OCCITANE, a French fragrance retailer.

Of course, with each new chain retailer that finds space there, Walnut Street faces the slur that it's becoming an outdoor mall with shops that are available in the suburbs.

This criticism about Walnut Street is one Mr. Dolan said his firm hears often. That's despite the fact that only two of Walnut Capital's tenants on Walnut Street -- Banana Republic and Pottery Barn -- are national chains. Recently, Walnut Capital leased a central location on Walnut Street to Toadflax, a local independent flower and gift shop highly respected for its distinctive merchandise.

"If you look at our street, we have an incredible diversity of independents and national types of retail," said Mr. Dolan, adding that a solid retail district "needs a little bit of both."

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