Parkway Center could see a revival, developer says
October 29, 2013 11:01 PM
The Best Western Parkway Center Inn located near the closed Parkway Center Mall.
The closed Parkway Center Mall.
By Mark Belko / Pittsburgh Post-Gazette
Parkway Center and its struggling mall are showing signs of life.
Nearly a year after Kmart closed, effectively delivering the death blow to the mall, the property appears to be attracting interest from big-box retailers. At the same time, a possible buyer may be in the works for seven Parkway Center office buildings.
Add to that a top-to-bottom renovation and name change for the Best Western Parkway Center Inn and a 272-unit apartment development under construction nearby, and it appears that the area could be poised for a comeback.
"There's a lot of interest and there are a lot of opportunities, considering the location," said Marc Kossman, executive vice president of Kossman Development Co., the mall and hotel owner.
Just minutes from Downtown with its own ramp on the Parkway West, the mall has been largely vacant since February, with the exception of a Giant Eagle. A big sign, "WE'RE OPEN", is painted on the side of the mall to let visitors know the grocery store has not suffered the same fate as other tenants.
The mall sustained a fatal blow when Kmart, an anchor tenant, closed in early January. Kossman, in turn, notified the few remaining retailers that their leases would not be renewed.
Right now, the mall's main parking lot, with its swales and undulations, is roped off. Two businesses -- Three Rivers Dental Group and Sports Deli, the Pro Sports Store -- occupy a small building across the road from the main parking area.
Since Kmart pulled out of the mall, Kossman Development has been working on a new plan for the 19-acre site and currently "is evaluating a lot of options," Mr. Kossman said. That "potentially" could include the mall's demolition, he said.
"There's absolutely serious interest in these properties," he said.
At the same time, there has been talk about either building a new store for Giant Eagle or expanding the existing one. Mr. Kossman said his company is "talking to [Giant Eagle] about future possibilities" but would not elaborate. A Giant Eagle spokesman said there is nothing to disclose at this time.
David Glickman, director of retail services for the Newmark Grubb Knight Frank real estate firm, said the mall property offers "a lot of benefits" to a retailer, including a location right off the parkway and adjacent offices and population from which to draw.
One potential drawback might be the proximity to the Robinson and North Fayette shopping districts, which are 6 to 8 miles up the parkway.
Although that might be too close for some retailers, "there will be plenty that won't consider it too close and may do something at Parkway Center" even if they have a presence in Robinson, Mr. Glickman said.
As Kossman mulls potential retailers and redevelopment, Greentree Parkway Associates I and Greentree Parkway Associates II appear to be close to a deal to sell seven Parkway Center office buildings and a parking garage adjacent to the mall.
Buildings 1, 2, 4, 6, 7, 9 and 10 plus the garage are under agreement to be sold to Waro LLC, a private equity firm based in Coral Gables, Fla.
The buildings were first put up for sale in 2009 and then taken off the market for a time before being put back on last year.
Parkway Center Associates -- made up of Frank Gustine Jr., the William Baierl estate, Louis Molnar and Edwin Pope -- had been seeking $49 million for properties. The sales price is not known.
Gregg Broujos, managing director and founding partner of Colliers International, which is marketing the properties, had no comment on a possible sale. "There has been significant interest throughout the marketing process," he said.
Officials with Waro could not be reached for comment.
A change visitors soon will notice involves the Best Western Parkway Center Inn. The 150-room hotel is being extensively renovated and will become a Holiday Inn Express and Suites in early December.
All guest rooms have been repainted and refurbished, with new furniture, mattresses, bedding, bathroom fixtures and flooring, and 36-inch flat screen TVs. Office and meeting spaces on the seventh and eighth floors have been turned into rooms.
Guests also will find a new lobby, a new great room with two fireplaces and new meeting space. The fitness room and swimming pool also are being refurbished.
"It's an older building that we gutted out basically and rebuilt," said Gilbert Wynrib, hotel sales director. "It's substantially better than what we had before."
Mr. Wynrib said the brand change was made in an effort to attract more corporate business. The hotel always has generated strong leisure traffic, particularly for sporting events Downtown, but the business end has lagged. "We're looking to increase that aspect of it," he said.
Kossman is footing the bill for the renovations.
A stone's throw from the hotel, Atlanta-based Oxford Properties is developing City Vista, a 272-unit, four-building apartment complex. The $42 million project will feature one-, two- and three-bedroom units and a clubhouse, business center, swimming pool, fitness space and lockers.
The first units should be available by the end of March and the entire complex should be finished by September. Rents for one-bedroom units should be about $1,200 a month.
"It's tucked away, but we're really excited about being there because it's so close to Downtown," said Bill Brown, Oxford development partner.
Mark Belko: firstname.lastname@example.org or 412-263-1262.
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