Target expected to drive East Liberty resurgence

New retail, housing, offices next on tap



The grand opening of the Target store today in East Liberty is a "big moment" in the neighborhood's resurgence, but it's not by any stretch the conclusion of the community's bid to reinvent itself.

Next on tap for the re-emerging commercial center could be offices, hotels, apartments and even more retail, as developers, public officials and community groups seek to capitalize on the momentum created by Target, one of the nation's most successful discount retailers.

In fact, Rob Stephany, city Urban Redevelopment Authority executive director, believes the neighborhood has the potential to recapture its past, when it was one of the busiest commercial corridors in the state.

"East Liberty was the center of the East End at one point and it could be there again," said Mr. Stephany, who was instrumental in the community's revitalization during his tenure as director of development for East Liberty Development Inc.

Economics aside, the opening of the Target also has symbolic value for a neighborhood that has worked hard to overcome failed urban renewal and years of neglect and decay.

Audrey Guskey, an associate professor of marketing at Duquesne University, said the fact the retailer chose East Liberty over many other areas shows that it is a viable, economically growing market.

"It's almost a stamp of approval," she said.

Even before the paint has dried on Target's trademark bull's-eye, other retailers are expressing interest in locating near the 145,000-square-foot store, which will feature traditional offerings as well as an expanded grocery section.

Steve Mosites, president of the Mosites Co., the developer responsible for bringing Target and Whole Foods to the East End, said he is fielding calls from fashion retailers and junior department store retailers similar to T.J. Maxx and Kohl's that have an interest in being in the neighborhood.

"Target will drive retail around it," he said. "You see it everywhere. I know three or four family restaurants that are interested in being across from Target. We're talking to some of them."

But retail is by no means the only redevelopment in the works.

East Liberty Development Inc. is negotiating with Ace Hotel, a trendy chain with boutique hotels in New York, Seattle, Portland, Ore., and Palm Springs, Calif., to occupy the former YMCA building.

Skip Schwab, the development organization's director of operations, said the parties are trying to assemble financing for the $14 million project. They are looking at new market and historic tax credits.

Ace apparently was drawn to the neighborhood by search engine company Google, whose offices are located at Bakery Square in Larimer near the East Liberty border. Mr. Schwab said Ace liked the former Y's public space, which includes a ballroom, gym and swimming pool.

"They use their facilities as a way to do arts and arts-related activity to create traffic and to create a revenue stream," he said.

Alex Calderwood, Ace Hotel co-founder, said in a statement, "Although we are very interested in Pittsburgh and inspired by the city, no plans for an Ace hotel have been finalized or formalized."

According to its press material, the chain likes to remodel old buildings in emerging locations and link its hotels to local culture.

Mr. Schwab said East Liberty Development hopes to have a final deal with Ace in place by the end of the year. He said the chain, in part, was drawn to the Y by the development organization's plan for a town square concept in the core of the business district near the East Liberty Presbyterian Church.

The agency envisions a gathering spot awash with retail, restaurants and entertainment similar to town squares in Europe. Mr. Schwab believes such potential exists, given the new restaurants that have popped up in the vicinity, such as Paris 66, Spoon and BRGR.

"It's amazing that there are two Ethiopian restaurants in East Liberty. That's phenomenal. That's head-scratching," he said.

In East Liberty's center core, there's still plenty of lower-end retail, but that is gradually changing as new restaurants and other businesses move in.

Mr. Stephany doesn't envision the center core ever becoming a "Disneyland shopping experience," but he stressed that it doesn't have to be.

"The goal here is just a cool, quirky kind of place," he said. "It could be one of the neatest main street experiences in the region."

With Target under its belt, Mosites is concentrating its efforts on its proposed Eastside III and Eastside IV developments near the store and the East Busway.

At Eastside III, it is pitching a plan for either a hotel or apartments. At Eastside IV, the plan is to erect two office buildings in the 45,000- and 80,000-square-foot range with ground-level retail.

However, if Mosites can land another retailer such as Kohl's, the mix could change, with a department store replacing one of the office buildings, Mr. Mosites said.

He and others see a strong demand for more office space in East Liberty. Developer Walnut Capital has leased all of its office space at Bakery Square, with Google being perhaps the most notable tenant.

"We're out of room," said Todd Reidbord, Walnut Capital president. "There's just nowhere else to grow. I believe [East Liberty] is the natural direction. It's so close, and it's easily connected by transportation."

Mosites sees the Eastside III and Eastside IV projects as part of a larger transit-oriented development that would incorporate the East Busway, providing another access point to neighborhood amenities.

The company has solicited proposals from potential tenants for the new developments. Mr. Mosites said it will probably be another 18 months before construction can begin, assuming that tenants and financing fall into place.

Mosites also is working to secure a tenant to replace Borders bookstore on Centre Avenue. Mr. Mosites said the two-story space will probably be split up for multiple tenants. He said he now is reviewing a handful of prospects, including fashion and service-oriented tenants.

As for future development in the corridor, he sees potential for a theater and other types of entertainment uses. He said the proposed redevelopment of the former Y and the Highland Building should help to revitalize the center core.

"It's coming. It could be three to five years before you see a noticeable impact on Penn Avenue, but that's not far away," he said.

Mr. Mosites sees more ancillary development taking place now that Target has been completed. He said the new store should help to energize Home Depot, which is a block or two away, and provide good connections between Whole Foods on Centre Avenue and Bakery Square on Penn.

"I feel like the trees have been planted. Now it's time to plant the shrubs and flowers," he said.

Walnut Capital, meanwhile, hopes to start construction in January to convert the Highland and Wallace buildings off Penn Circle South into 130 apartments and 6,000 square feet of retail space. A 181-space parking garage also would be built.

Mr. Reidbord said the developer has finalized its U.S. Housing and Urban Development financing but is still awaiting word on whether Gov. Tom Corbett will release a $4.5 million state capital grant designated for the project.

"It's critical. It's the last spoke in the wheel we need. Without it, we can't move forward," he said.

While Target and East Liberty will get most of the attention today, Mayor Luke Ravenstahl said his goal is to carry the momentum into Lincoln-Lemington, Larimer and Homewood, neighborhoods that have struggled over the years to right themselves.

The URA has invited developers to submit their qualifications to develop 70 to 120 units of housing in Homewood and 70 to 100 in Larimer as a first phase of redevelopment. Mr. Ravenstahl sees the potential to build "good quality housing stock" and rebuild neighborhood business districts in both.

"The success we've seen in East Liberty allows us for the first time in a long time to plan for the future of those neighborhoods," he said.

While the mayor acknowledged that there are still "way too many homicides and violent crimes" in some of the neighborhoods, he added the city and police are working aggressively to eradicate both.

And for those who wonder whether a rebirth is possible in those communities, Mr. Stephany has a history lesson.

"The same skepticism people might have about a high-valued Larimer or a high-valued Homewood was the same skepticism I had when I was doing community development in East Liberty seven years ago. People just didn't think East Liberty could come back," he said.

"When government, the philanthropic community and a proactive developer align their forces, this town can make incredible change, and that is the story of East Liberty and that can be the story of these other neighborhoods as well."


Mark Belko: mbelko@post-gazette.com or 412-263-1262. First Published July 24, 2011 4:00 AM


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