URA votes to buy former Saks for $4 million

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The city's Urban Redevelopment Authority has completed its acquisition of the former Saks Fifth Avenue department store Downtown, clearing the way for a proposed retail, residential and parking development at the site.

URA board members voted Thursday to exercise an option to purchase the four-story Smithfield Street building from Oliver Smithfield Joint Venture for $4 million, plus costs.

Also Thursday, the board agreed to issue a request for proposals seeking developers or grocers interested in opening a market or grocery store at the old Sheraden Market at 2928 Sheraden Boulevard.

The acquisition of the Saks building comes about nine months after the upscale retailer closed its doors after more than 60 years Downtown. The URA made an offer on the property in June with the intent to demolish it and replace the department store with street level retail and a public parking garage.

In August, the URA asked developers to submit proposals for the redevelopment of the site. Two months later, it selected two local developers, Millcraft Industries and McKnight Realty Partners, to undertake the effort with a plan to build a parking garage, 101 apartments, and about 20,000 square feet of retail space on the property.

Yarone Zober, URA board chairman, said the property represents a "tremendous opportunity for the city of Pittsburgh. It's a key site in the middle of a thriving Downtown business district."

In October, Millcraft and McKnight were given 90 days of exclusive negotiations, with an option to extend the period by another 60 days, to do due diligence to determine if they want to move ahead with the project.

Even if the developers were to back out of the deal under a "worst-case scenario," the acquisition is still worthwhile, Mr. Zober said. "We know there's other interest in this site. It would be a real mistake to just let this go vacant. We've seen the negative power of vacant buildings in Downtown before and in other neighborhoods. They're a cancer. They spread," he said.

Millcraft and McKnight have yet to decide whether to pursue the project. However, William Rudolph, a principal in McKnight and also a URA board member, said after the meeting that the development team remains "very, very positive" about the project.

Mr. Rudolph, who abstained from Thursday's vote, said the public parking is very much needed in that part of town. In addition, several retailers already have expressed interest in the property, he said, although the development team has yet to entertain any offers.

While "it's all very positive," Mr. Rudolph added that McKnight and Millcraft are "going to have to be creative in the design phase and financing" to make the project work.

In the supermarket request for proposals, the URA is looking for a grocer interested in either purchasing or leasing the property for a store or a developer willing to bring in a grocer as the primary tenant.

At the same time, Mr. Zober urged the URA administration to broaden the request to include other ideas for the property, which is located across the street from the K-8 Langley School, a former high school.

Although the request for proposals was approved, URA board member Jim Ferlo, a Democratic state senator, said he has "reservations about the likely survivability of a grocery store" given the history at the site.

Sheraden has been without a grocery since 2008, when the Sheraden Market, a former Foodland, closed.

Robert Rubinstein, acting URA executive director, said he was hopeful that the request for proposals would lead to a similar result as in Beechview and the Hill District, where the city has helped to plant groceries.

Elaine Palombini, a member of the Sheraden Community Council, said the group supports the idea of bringing a grocery back to the neighborhood. "We felt that a grocery store would bring some life back to the community," she said. "All the businesses were leaving because there was nothing going on."

But she stressed that the community is interested in a true supermarket, not something akin to a discount store.

"We don't need another dollar store. We got them all around us. That, to me, is not going to bring people. We need a place where people can buy fresh fruit and vegetables and not just cigarettes and lottery and things like that," she said.

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


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