The long vacant Lord & Taylor building Downtown soon will be in the hands of a new owner and, appropriately enough, it will be a bank.
PNC Financial Services Group is buying the former Mellon Bank, converted into a department store as part of a failed bid to transform the Fifth and Forbes corridor, with plans to use it for administrative offices.
The bank has reached a deal with Forest Hills-based J.J. Gumberg Co. to purchase the property at Smithfield Street and Fifth Avenue and hopes to close on the transaction by the end of June. The price has not been disclosed.
PNC expects to move at least 800 employees into the building from other locations in and around Pittsburgh by the end of 2013 or early 2014, enlivening a section of Downtown that has been stung by the closing of upscale retailer Saks Fifth Avenue and high vacancy rates in some nearby office towers.
"This has been a building that has been dark for many years and is really located in the center of Downtown. We think that this continues to really show PNC's commitment to Downtown and the commitment of PNC's leadership to both the Pittsburgh market and Downtown Pittsburgh," said Gary Saulson, PNC's director of corporate real estate.
The building, a city historic structure, has been boarded up since Lord & Taylor closed in November 2004 amid declining sales and shopper indifference. The city sank $11.8 million into a deal to lure the department store as part of former Mayor Tom Murphy's strategy to revitalize the Downtown business district.
Gumberg bought the elegant granite building for $2.5 million in February 2005 with the hope of landing another department store or general merchandise retailer or multiple ones to fill the space. At one point, it even marketed the site for the "Shoppes at Smithfield," a proposed retail complex.
But none of it produced any fruit and the building has remained empty for the seven years Gumberg has owned it.
"We congratulate PNC on its purchase of this beautiful building and for making it part of their master plan for the revitalization of Downtown," Ira J. Gumberg, Gumberg's president and CEO, said in a statement.
Mr. Saulson said PNC had been negotiating with Gumberg for months on a potential purchase. It had looked at a number of buildings, both in the city and the suburbs, for additional space before deciding on the former bank with 120,000 square feet of space spread over six floors and a basement.
"It became very clear very quickly that based on our commitment to Pittsburgh and our commitment to Downtown that it made sense to be Downtown and we really like the attributes this building had to offer. It had a fairly large floor plate. It was renovated fairly recently. We liked and admired its place in Pittsburgh history," he said.
While many had considered the building for retail use, Mr. Saulson said PNC envisioned it as an office complex -- a "diamond in the rough" -- with its elevators and escalators. It is close to public transportation and a block away from PNC's main campus and its new $400 million, 33-story Tower at PNC Plaza headquarters now under construction on Wood Street.
"In this case, that building really fit the bill for us," Mr. Saulson said.
The Mellon Bank branch opened in the spring of 1924 and served customers for seven decades before being purchased by the May Co. for use as a department store in October 1998.
Local preservationists protested loudly when the bank's cathedral-like open interior, with marble columns and floors, was converted into a multi-level department store.
PNC, mindful of the structure's past, will not "make any alterations to the building which would in any way affect its historical significance or exterior architecture," Mr. Saulson said.
Inside, PNC plans to use the existing floor layouts but will remove coverings over the windows to allow natural light into the building. It also will replace the fluorescent lighting with LED lighting to save an estimated $265,000 a year in energy costs.
The bank, which is planning the world's greenest skyscraper with the Tower at PNC Plaza, intends with the renovations to meet or exceed U.S. Green Building Council Leadership in Energy and Environmental Design certification standards for commercial interiors.
With the latest purchase, PNC is moving to transform yet another block of Downtown. The Tower at PNC Plaza construction, set to be completed in June 2015, has removed a block of rundown buildings on Wood. PNC also uplifted a forlorn stretch of Fifth with the construction of Three PNC Plaza, which opened in 2009. Its other holdings Downtown include the One and Two PNC Plaza buildings and PNC Firstside Center.
In the block next to Lord & Taylor, Oxford Development Co. last week announced plans to build a $238 million, 33-story skyscraper at the site of 441 Smithfield or to renovate the existing building there at a cost of $40 million. It plans to make a decision this fall.neigh_city - businessnews
Mark Belko: firstname.lastname@example.org or 412-263-1262. First Published May 31, 2012 9:00 AM