Penguins choose developer for site of former Civic Arena


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The developer that built Crawford Square in the Lower Hill District is picking up where it left off.

St. Louis-based McCormack Baron Salazar has been selected by the Pittsburgh Penguins hockey team to kick off the redevelopment of the 28-acre former Civic Arena site.

It will serve as the lead residential developer on the project, with plans to build apartments, townhouses and perhaps for-sale housing over the next decade on the Lower Hill site.

After erecting more than 400 rental units and for-sale homes as part of the Crawford Square development two decades ago, McCormack Baron will provide an encore -- starting with a 200- to 300-unit first phase on the eastern edge of the arena site.

The new development borders Crawford Square and is expected to start in early 2015, assuming streets, utilities and other infrastructure are in place by then.

In all, the firm expects to develop at least 800 units over the next eight to 10 years.

The selection of McCormack Baron is a key milestone in the quest by the Penguins to redevelop the publicly owned site. The team won the development rights to the property as part of the deal reached with state and local leaders in 2007 to build Consol Energy Center.

David Morehouse, Penguins CEO, said the team settled on McCormack Baron after reviewing its work at Crawford Square and other developments it has done around the country.

"What we've seen is they have the know-how, they have the capacity and they have the shared vision of making sure that when they are doing development that there is some greater good [transferred to the community]," he said.

Mr. Morehouse said that the Penguins considered several other developers but concluded that McCormack Baron "stood head and shoulders" above everyone else.

"We're very fortunate to have them in our backyard, to have them interested in Pittsburgh and to have them interested in doing more in Pittsburgh," he said.

While McCormack Baron will be the lead residential developer, the Penguins plan to work with Hill District leaders to select a minority-owned company to build at least another 200 residential units on the site.

Together, the two developers will be responsible for building up to 1,200 units on approximately 10 acres, or about half of the overall development site, minus the land needed for infrastructure.

Richard D. Baron, chairman and CEO, said he envisions housing for young professionals, small families, Downtown workers, graduate students and others at the site. McCormack Baron plans a mix of apartments and townhouses but also sees the potential for for-sale units in the future.

The housing will be a "bit different than what we did at Crawford but very much consistent with where the market has moved in Pittsburgh today," he said.

"We're seeing more and more young professionals coming into Pittsburgh, small families, and we think that there's been a real interest in Pittsburgh as a place to work," he said.

"We think there's an energy in Pittsburgh now that more than 20 years ago when we started in the Hill, there was nothing to approach the kind of enthusiasm and excitement about Pittsburgh as there is today."

McCormack Baron also is planning a retail component to complement the housing, one that could include restaurants, a gourmet grocery, and other businesses geared to serving residents and Downtown workers.

Crawford Square apartment and townhouse rents now run anywhere from $506 a month to $1,725 a month, depending on the type of unit and the number of bedrooms. Mr. Baron said initial rents for the new units probably will be a "bit higher" than that.

"I think we're talking about a different product. We're talking about Downtown workforce and others who are coming into the downtown in some of the other facilities," he said.

At the same time, the Penguins and the developer have pledged to make at least 20 percent of all units affordable to low-income residents. Some Hill leaders have been pushing for at least 30 percent.

In addition to Crawford Square, McCormack Baron has been involved in the Bedford Hills apartment development in the Hill and the Fairfield Apartments development in East Liberty.

While its latest focus will be on the old Civic Arena site, the firm also is interested in partnering with the Hill Community Development Corp. and others in doing housing in the middle and upper Hill, Mr. Baron said.

He said the Crawford Square work provided a good foundation for McCormack Baron's latest venture.

"Having been with it for as many years as we have and watching the demographics and the turnover and the rent levels, we think we have a very good feel," he said.

In addition to the housing, the Penguins are planning 600,000 square feet of office space and 250,000 square feet of retail at the site, which is owned by the city-Allegheny County Sports & Exhibition Authority and the city Urban Redevelopment Authority. It plans on seeking developers for the office and retail next year.

Under the arena deal, the Penguins must develop at least 2 acres annually over 10 years, starting in fall 2014, or possibly lose the rights to the land.

neigh_city - breaking - businessnews

Mark Belko: mbelko@post-gazette.com or 412-263-1262. First Published September 18, 2013 4:00 AM


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