Department of Welfare offices moving

Displaced by sale of state building

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The state Department of Public Welfare is moving some of its Downtown offices to Warner Centre, providing a shot in the arm for the former movie theater and one-time opera house.

About 500 welfare employees are being displaced by the controversial $4.6 million sale of the State Office Building, Downtown, to River Vue Associates LP, an affiliate of Washington County developer Millcraft Industries.

At least some of those employees will take 34,768 square feet of space in Warner Centre, including all the space in the building's old food court on the second floor. The department also will occupy the third floor, which is now vacant. Stacey Witalec, a Department of Public Welfare spokeswoman, said she did not know how many employees would be moving to Warner Centre, which fronts Forbes and Fifth avenues. It is one of three locations to which workers will be relocating, she said.

Employees also will be moving to Millcraft-owned Piatt Place, 11 Stanwix St., and the Chamber of Commerce Building, all Downtown. With the move, nearly 90 percent of Warner Centre office space will be leased, said Gary Roberson, a brokerage and leasing agent for Grant Street Associates, which handled the deal.

"It's great for the building. I think the entity [J.J. Operating Corp.] that purchased it bought it with the expectation that at some point it would be able to turn it around," Mr. Roberson said.

Still to be leased are a little more than 5,000 square feet of office space on the fifth floor and slightly more than 2,000 square feet on the sixth. The building also is struggling to fill a handful of retail spaces on the first floor.

About 3,000 square feet of street-level space on Fifth that most recently housed a clothing store still remains vacant. Another 6,000 square feet below it also is available. About 3,800 square feet of retail space closer to Forbes is empty as well.

Mr. Roberson believes the move of some welfare employees from the State Office Building will help in recruiting retailers.

"You've got people in the area looking for goods and services. That always helps," he said.

State officials will pay $20.35 a square foot, including utilities and janitorial services, to lease space in Warner Centre. The lease will run 10 years with an option for five more. It took effect Aug. 1, although employees aren't expected to move until early next year. The lease marks a bit of good news for a building that has seen its share of hard luck. Warner Centre was purchased by J.J. Operating for $2.7 million in 2005, four months after it was auctioned off at an Allegheny County sheriff sale for the same price.

"I think with the welfare office coming there, it has come back. There are still some finishing touches as we fill the small available suites, but I think the building is back," he said.

The sale of the State Office Building has drawn fire from state Auditor General Jack Wagner, who said it will cost taxpayers nearly $55 million in leasing costs over 30 years, not save them $14 million, as the Department of General Services claims.

Mr. Wagner said the Warner Centre lease was never revealed to his workers in their investigation of the State Office Building sale and represents a "lack of transparency."

He said the move would further scatter state employees Downtown. "It is not being economically responsible and it is very confusing for the average person to find the right building," he said.


Mark Belko can be reached at mbelko@post-gazette.com or 412-263-1262.


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