Developers sink apartment plans at former Saks Fifth Avenue department store site
May 17, 2013 8:00 AM
Keith Srakocic/Associated Press
The site of the former Saks Fifth Avenue department store in Pittsburgh.
By Mark Belko Pittsburgh Post-Gazette
Two local developers have scrapped plans to build 130 apartments as part of a proposed redevelopment of the former Saks Fifth Avenue department store site on Smithfield Street, Downtown.
Instead, Millcraft Investments and McKnight Realty Partners will concentrate on constructing a 450-space parking garage and 25,000 square feet of retail space to replace Saks, which closed in March 2012, leaving a vacant four-story building in its wake.
The apartments would have been built on top of the garage. In the mix, the developers were thinking about including 24 tiny 500-square-foot studios that would have leased for about $900 a month. They also were considering a rooftop swimming pool, a spa and a yoga room for the complex.
But Lucas Piatt, president and chief operating officer of Millcraft Investments, said the timing and the complexity of the design ultimately made the apartments impractical.
"You have so many points of egress and ingress when you have the multiple uses that it makes parking difficult and kind of inefficient," he said.
While there may be potential to add apartments in the future, Mr. Piatt said the goal of the development team now is to get the parking garage finished.
"Our main focus is to get in the ground, get the project built and get the parking on the market as soon as possible," he said.
He expects demand for such space to increase with plans by McKnight to put a 230-room Embassy Suites hotel in the top half of the Henry W. Oliver Building next to Saks, the conversion of the upper floors of the nearby Regional Enterprise Tower into apartments, and PNC's reuse of the empty Lord & Taylor department store across the street from Saks as a call center.
"We think the main thing the area needs is the parking, first and foremost," added William Rudolph, a principal in McKnight and a city Urban Redevelopment Authority board member. "That seems to be the biggest void in that area."
Millcraft and McKnight will be submitting a revised proposal for consideration by the URA board next month, said Robert Rubinstein, the agency's acting executive director.
In October, the URA selected the development team after issuing a request for proposals in August for the redevelopment of the Saks site for residential and retail use. At the time, URA officials said the Millcraft/McKnight proposal was the best of the three submitted.
The URA became involved after reaching a deal to purchase the Saks building for $4 million with the intent to demolish it and replace it with a parking garage and retail. As a principal in McKnight and a URA board member, Mr. Rudolph has been recusing himself in discussions involving the property.
Mr. Rubinstein said he saw no need to revisit the request for proposals now that the Millcraft/McKnight team has changed course. He said the other two proposals were "insufficient for the site," adding that one was an "architect's conceptual ideas, not a development proposal." The other involved a hotel, but Mr. Rubinstein said the URA was working with the developer on other sites in the city.
"We felt that the key element was getting a great street experience on Fifth and Smithfield as well as serving the proven demand for additional parking in the core," he said.
"We're working with two of the most experienced developers in the region. They're the most creative in terms of raising the financing. I don't know what else you would get that's different or better than what these two would bring to the table."
Yarone Zober, URA board chairman and chief of staff to Mayor Luke Ravenstahl, said Millcraft and McKnight would have had the winning proposal even without the proposed apartments.
"An office or residential tower was not what clinched the proposal. That was the cherry on top," he said.
While Mr. Piatt said Millcraft and McKnight are looking at ways to engineer the garage to perhaps build onto it in the future, he didn't exactly leave the impression that apartments would end up there one day.
"We're going to focus our efforts in housing in other areas of Downtown right now," he said.