Next Pittsburgh mayor has plenty left to do Downtown

More parking, specialty retail among the center city's needs

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It's easy to think that with two new skyscrapers in the works, an ever-tightening office market, a growing residential sector and a booming Market Square, Pittsburgh's next mayor may be able to rest easy when it comes to development Downtown.

Not by a long shot.

While the Golden Triangle no doubt is in midst of a transformation, property owners, merchants and others say there is still plenty of work to do -- from creating more parking to developing more specialized retail that appeals to suburbanites and Downtown residents alike.

There will be other issues on the new mayor's plate as well after January's swearing-in. Should tax increment financing or other public incentives be used to help put in roads and utilities at the former Civic Arena site? What can be done to encourage office development, particularly with Class A vacancy rates at a nearly 30-year low?

And just as Mayor Luke Ravenstahl had to deal with the loss of the upscale Saks Fifth Avenue department store last year, the new mayor could be confronted with a possible move by U.S. Steel from its longtime home on Grant Street to the suburbs -- a relocation that could cost Downtown 1,800 workers and deliver a symbolic black eye.

PG graphic: Sites for improvement
(Click image for larger version)

Although the center city is much better off now than it was 10 to 20 years ago, it still will be a big part of the new mayor's agenda, if only because it remains the hub of the region, said Joseph Sabino Mistick, a Duquesne University law professor who served as executive secretary to former Mayor Sophie Masloff.

"You'll have your hands full," he said. "The region depends on what happens in the Golden Triangle."

For many, one of the biggest issues has nothing to do with swanky restaurants, trendy retailers or shiny new office buildings but a far more basic amenity -- parking.

"We've got to solve the parking situation. The garages are in need of repair and we need more parking," said Arthur Ziegler, president of the Pittsburgh History & Landmarks Foundation, which has been instrumental in the redevelopment of Market Square and the Fifth and Forbes corridor.

Merrill Stabile, Alco Parking president, sees a need for three more garages Downtown, about 500 to 700 spaces in all -- one in the Cultural District, one in the Fifth-Forbes corridor and one near Grant Street.

Mr. Stabile, who operates about 60 percent of the parking Downtown, said the additional inventory would help commuters and visitors, as well as encourage residential growth. Most Downtown residents want parking in their buildings or nearby.

Brent Hugus, manager of Splash, a Fifth Avenue kitchen, bath and home fixtures store, said it's one of the biggest issues with his customers. As a result, some prefer to go to showrooms in Cranberry or Murrysville.

"No one wants to come into the city to bear the cost of parking or to run to the meter every couple of minutes or every hour," he said.

The Pittsburgh Downtown Partnership counts 38,518 spaces in greater Downtown, which includes the Strip District, North Shore and part of the South Side, with an average daily maximum rate of $14.

Some help may already be on the way. Millcraft Industries is planning a 335-space parking garage on Forbes Avenue as part of its Gardens at Market Square project expected to be ready in 2015. It also has plans for a 450-space garage at the former Saks site on Smithfield Street in conjunction with a proposed apartment and retail development.

To spur more parking, the new mayor may have to consider public incentives such as tax increment financing, Mr. Stabile said. "Sadly, parking garages don't pay for themselves but they are needed," he said.

Retail and food stores

Another top issue is retail. While Downtown has seen an explosion of restaurants over the last several years, retail has not kept pace.

"People want to live [Downtown], they want to work there, but they also want to shop there," Mr. Ziegler said. "We don't want Downtown simply to be for workers, residents, culture and restaurants. We also need retail. We need those ingredients."

Nick Nicholas, a Market Square property owner and restaurateur, believes losing Saks was a major blow. He called for more specialized retail, such as boutiques that people would not be able to find in malls.

Mr. Mistick sees a need to get "some of the premier retailers back in the city" while continuing to encourage residential life and building off the success of Market Square, which is teeming with restaurants after a $5 million makeover.

For many, the biggest retail need is not trinkets but staples.

In a recent survey by the Pittsburgh Downtown Partnership, residents listed a grocery store as their top priority, naming Giant Eagle, Whole Foods Market and Trader Joe's as their preferred choices.

"The No. 1 thing Downtown needs is a grocery store," one that sells fresh fish and meat, prepared foods and household staples, said John Valentine, executive director of the Pittsburgh Downtown Community Development Corp.

Highwoods Properties, owner of the PPG Place, has been toying with the idea of replacing the complex's food court with a grocery. "We would love to have one and we are determining its feasibility while at the same time talking to potential suitors," said Herky Pollock, executive vice president of the commercial real estate services firm CBRE, who is the broker for the property.

And some believe retail will take care of itself as the Downtown residential population and workforce grows. "You know the old saying, retail follows rooftops," Mr. Valentine said.

One thing the new mayor should not do is mess with what's working, officials said. That means nurturing the blossoming residential development and not neglecting Downtown in favor of city neighborhoods.

"Hopefully, he's going to be as pro-Downtown development and as helpful as the Ravenstahl administration," Mr. Nicholas said. "I think we have good momentum and we need to keep it going."

Mr. Ziegler said he hopes a new mayor will embrace the same type of Main Street approach Mr. Ravenstahl has taken, rather than trying to do the expensive and elaborate retail districts that former mayor Tom Murphy favored. Working with Mr. Ravenstahl, the history and landmarks foundation has redeveloped a number of storefronts.

"I think we've demonstrated the validity of the historical building as a really attractive feature Downtown," he said. "If you look at other cities, the type [of development] Murphy advanced has not attracted people in large numbers."

"I think the mayor's plan has worked," said Mr. Valentine, who is trying to interest clothing boutiques in Downtown. "I used to be in the master plan camp. But I think this Main Street approach is really working."

Likewise, Mr. Pollock said smaller specialty retailers are emerging from the recession more quickly and successfully than their big-box counterparts.

Just 'a few tweaks'

Beyond parking and retail, there are other pockets of concern:

• On Grant Street, for example, the office space in the Union Trust Building, mired in bankruptcy, is more than a third empty and most of the street-level retail space is vacant.

• On Ross Street, the former jail annex site adjacent to city hall remains vacant, some five years after developer Kratsa Properties proposed building a $25 million, 156-room Hilton Garden Inn there. The land now is used for parking.

• A couple of blocks away on Forbes, Warner Centre -- next door to the new PNC 33-story skyscraper under construction -- is 35.7 percent vacant and showing signs of wear. "That's certainly ripe for redevelopment to some extent," said David Glickman, director of retail services for Newmark Grubb Knight Frank.

• On Market Street, a stone's throw from Market Square, Froggy's, the legendary restaurant and bar that entertained the likes of Mario Lemieux, Howard Cosell and Jack Nicholson, is still vacant 10 years after its last call.

Perhaps the biggest focus of the mayor's attention over the next few years will be right in his own backyard, on or near Grant Street. At the site of the former Civic Arena, the Penguins hockey team is proposing a residential, office and commercial development on 28 acres.

It and the proposed Buncher riverfront development in the Strip that has been mired in politics could be the next big redevelopment sites in the city.

The Penguins don't have to start development of the arena property until December 2014. But before then, the city-Allegheny County Sports & Exhibition Authority is responsible for installing $40 million in infrastructure to support the endeavor.

While the SEA has won a commitment of $15 million in state funding, it still is searching for other sources. The next mayor may have to decide whether to commit millions of dollars in tax increment financing -- almost always a controversial move, particularly for sports teams -- to complete the infrastructure.

Meanwhile, U.S. Steel has yet to announce whether it will stay in the U.S. Steel Tower on Grant Street, its home for more than four decades, when its lease expires in 2017. The company is considering the Buncher property in the Strip and a 116-acre site in Findlay. A company spokeswoman had no comment on the status of the search Friday.

A move to the suburbs by such a venerable, Pittsburgh-centric firm could have ramifications for Downtown and the next mayor.

"I would certainly be disappointed if it happened and I think on a short-term basis it would leave a fairly large amount of space to be leased," said Peter Sukernek, vice president and general manager of Howard Hanna Commercial Real Estate Services.

"Long term, I think the space would be leased and the number of people that would be leaving the Downtown area would be replaced by other people."

Despite all the work left to do -- and the potential challenges ahead -- some believe the next mayor, for the first time in decades, will be inheriting a city center that doesn't need a makeover, just a few tweaks.

"There aren't too many places Downtown that will need intense public attention," Mr. Glickman said. "The mayor isn't going to start his [inaugural] speech talking about a blighted Downtown."

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Mark Belko: or 412-263-1262. First Published April 7, 2013 4:00 AM


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