Developer Forest City Enterprises wants to demolish Station Square’s East Warehouse, the building that once housed the likes of Matrix, Hooters and Woodson’s All-Star Grille. But one thing is standing in the way — Whim Pittsburgh.
The nightclub is refusing to leave its spot in the former railroad warehouse after Forest City terminated its lease. The Cleveland developer plans to raze the building to make way for parking and an eventual residential development.
The club has sued in Allegheny County Common Pleas Court, claiming the developer has yet to get what it needs to terminate the lease — approval from the city planning commission for the redevelopment plans.
But in a countersuit, Forest City argued that it met that standard earlier this year when it received approval from the city’s zoning board of adjustment for a variance to change the property use to commercial parking. The developer accused Whim of breaching the lease.
The developer urged Common Pleas Senior Judge Joseph James, who held a hearing on the dispute last week, to declare the variance approval “is an approval of the East Warehouse Redevelopment Plan for purposes” of the lease.
Forest City wants to get moving on the demolition by July 1 so new parking there can be ready by Sept. 1, as required under the developer’s agreement with its lender.
Whim is the only tenant left in the East Warehouse, which for decades had served as one of the city’s top night spots. The razing would clear the way for the completion of a new surface parking area with 316 parking spaces.
That lot would complement about 1,130 existing parking spaces that surround the warehouse on the east side of Station Square. Forest City expects to need the new spaces when it moves forward with plans to build apartments or condominiums on the property.
The developer has toyed with the idea of doing a residential development on that land since 2006, when it proposed building up to 1,200 condos as part of its unsuccessful bid for the Pittsburgh casino license.
In deciding against selling the Station Square complex last year, Forest City said it was actively seeking a partner to help develop a “meaningful” number of apartments or condos. The move to raze the warehouse is the first evidence that it’s prepared to move forward with that plan.
The chief issue in the dueling lawsuits is an amended lease negotiated between Forest City Station Square Associates LP and Moe G Enterprises LLC, Whim’s parent company, in 2012.
The amended agreement extended the term of the lease three years at a reduced rate and gave Forest City the right to terminate with 120 days’ notice if it “intends to redevelop the property and has obtained approval from the city of Pittsburgh ... for such redevelopment plan(s).”
Whim maintains “approval” means a redevelopment plan submitted to and approved by the city planning commission.
It argued that the zoning variance was approved in anticipation of the “eventual submission of redevelopment plans.”
But Forest City countered that the variance approval “is an approval” of its plan to redevelop the property.
Jeff Linton, a Forest City spokesman, said the developer has “done everything by the letter” of the amended lease and now wants Whim to fulfill its lease obligations.
Thomas Gricks III, one of Whim’s attorneys, declined comment pending a ruling by Judge James.
In arguing for an injunction to block the lease termination, Whim stated that despite its efforts to accommodate Forest City, it has been unable to find an acceptable alternative location. The nightclub added that if Forest City succeeds in forcing it out, it will suffer damages in the form of lost profits, potentially higher rent elsewhere, moving expenses, downtime of business operations, lost customers and lost goodwill.
As for the fate of the East Warehouse, Arthur Ziegler, president of the Pittsburgh History and Landmarks Foundation, which was responsible for turning the former Pittsburgh & Lake Erie railroad station into Station Square, said he had no problem with Forest City demolishing the building.
“We don’t object to that. It’s not a building of architectural distinction and we feel the site could be put to much better use,” he said.
Mark Belko: email@example.com or 412-263-1262.