Apartments rise on South Side

Developers jump at opportunities after limits end


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Freed last year from a restriction that prevented apartment-building for a decade, SouthSide Works is now making up for lost time.

No fewer than three apartment developments are in the works at the South Side riverfront complex, the latest a 262-unit building to be erected at Sidney and South 26th streets.

The city Urban Redevelopment Authority board is expected to vote Thursday on whether to sell a 2.5-acre parcel to the Soffer Organization, the SouthSide Works developer, and partner Village Green Development Holding LLC for $425,000 an acre for the proposed development.

But it is not by any means the only apartment project in the works at the 123-acre site along the Monongahela River.

Developer Ralph Falbo also will be before the URA board this week seeking permission to convert a proposed townhouse development on South Water Street into a four-story, 56-unit apartment complex featuring one-bedroom flats.

At the same time, Oxford Development Co. is proposing to build an eight-story, 173-unit apartment building about a block away at Sidney and Hot Metal streets.

All of the construction is taking place about a year after the URA paid Columbus, Ohio-based Nationwide Realty Investors $500,000 to be released from a 2002 agreement that prohibited apartment building at the SouthSide Works complex, except for about 83 high-end units under development at the time.

The agreement negotiated under former mayor Tom Murphy was part of a deal reached with Nationwide and partner Continental Real Estate Cos. to build Carson Street Commons, a 276-unit apartment and townhouse development on a 6.5-acre tract between 25th and 26th streets.

While the 2002 deal has come under attack in the years since, Mr. Murphy and former URA executive director Mulugetta Birru have defended it, saying that at the time no one knew what the market for apartments would be in that area and that Nationwide and Continental wanted some protection for their investment. At the time, Mr. Birru has said, Soffer had no plans for apartments at SouthSide Works other than the 83 permitted under the agreement.

To be released from the restriction, the URA was forced to pay Nationwide $150,000 in cash and make other concessions totaling another $350,000.

Yarone Zober, the current URA board chairman and chief of staff to Mayor Luke Ravenstahl, argued Tuesday that the settlement is proving its value. He said it's no coincidence that apartments are going up now that the restriction has been removed.

"It cost the public a little money to correct the mistakes Tom Murphy made in restricting housing on the South Side. But once we were able to correct his mistakes, we see millions of dollars of investment and hundreds, if not thousands, of people moving back into Pittsburgh," he said.

Mr. Falbo said the settlement "opened the door for us" to build apartments at SouthSide Works. The developer initially wanted to build condominiums, but began considering apartments when the condo market went south.

He tried to work out a deal with Nationwide so that he could build apartments. But he said he dropped those plans in favor of townhouses when Nationwide wanted him to keep his rents above the levels it was charging.

Asked if he would have stuck with townhouses if the URA's settlement with Nationwide had not been reached, he replied, "It's questionable. We probably would have but we're much happier with this opportunity."

Mr. Falbo hopes to be under construction with the $10 million apartment building before winter or in early spring. He said construction would take nine months to a year to complete. All of the apartments will rent at market rates and will have balconies. There also will be parking for 73 vehicles.

The $50 million, six-story Soffer and Village Green development also will feature market-rate apartments along with amenities like an indoor/outdoor swimming pool, club room, fitness facilities and landscaped courtyard.

Soffer and Village Green also are promising to build up to 12,000 square feet of retail space as part of plans for a fifth URA parking garage on an adjacent parcel of land.

Oxford, meanwhile, hopes to get started on its $31.5 million apartment building by mid fall and have it finished by the spring of 2015. Seventy percent of the units will be one bedrooms or efficiencies and the rest will be two bedrooms. The project, now before the city planning commission, would include two levels of parking with spaces for 179 vehicles and another 64 to 70 spaces for bicycles. A gym also would be available to residents.

With the projects, nearly 400 apartments units could be coming on line on the South Side in a couple of years. Mr. Zober does not believe it's too many.

He said there has been a shortage in Pittsburgh in the type and quality of the apartment housing now being constructed.

"We're finding that when we lift restrictions on rental housing in places like the South Side, there's a market demand as well," he said.

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Mark Belko: mbelko@post-gazette.com or 412-263-1262.


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