A parcel of land on the North Shore eyed by the Steelers and Pirates for retail development is worth between $900,000 to $2.6 million, according to an appraisal of the property.
The lower end value, as determined by Integra Realty Resources, is nearly double the $466,760 the teams would have had to pay for the land under an old agreement renegotiated this fall. It is far less than the $10 million offered by parking magnate Merrill Stabile for the parcel and an adjacent one.
In his analysis, Douglas Herold, Integra director, said the proposed retail development is not the highest and best use for the land but is the only one that would be "marginally financially feasible" at this time.
He said better uses would be office, residential or hotel, but none of those are financially feasible given the current market.
The city Stadium Authority renegotiated a nine-year-old option agreement with the teams after they missed deadlines for developing parcels between Heinz Field and PNC Park.
The teams are now proposing a two-story retail and office development to meet the next deadline. Development must begin by March 2013.
However, in his presentation to the stadium authority board, Mr. Herold said the deadline in essence limits the potential for the site given current market conditions. He said building guidelines requiring a steel frame for construction also serve to reduce the land value because they are more costly to implement.
He said the land is worth $900,000 based on those standards; $2.6 million if wood or masonry construction is used.
Mr. Stabile of Alco Parking offered $10 million for a 3.3-acre site that includes the subject parcel. Mr. Herold said that translates into about $4.8 million for the 1.3-acre site the teams want to develop.
However, Mr. Herold said comparing the two is like comparing apples and oranges because Mr. Stabile was not constrained by a development deadline and also could continue using the land for parking after he bought it, which the teams are not permitted to do.
The appraisal and accompanying analysis have prompted some stadium authority boards to rethink development objectives on the North Shore.
Also today, the board approved an agreement that will allow for free light rail transit rides between the West General Robinson Street garage and Downtown once the T extension to the North Shore opens next year. Alco and the Stadium Authority will split the $160,000 cost for the free rides.
Mark Belko: firstname.lastname@example.org or 412-263-1262.