Pittsburgh's Urban Redevelopment Authority wants final say over the retailer tapped to occupy the closed Lazarus-Macy's building on Fifth Avenue, Downtown.

During a recent meeting, URA officials told representatives for J.J. Operating Corp., the family-owned Manhattan developer that is buying the building, that they want to see a "quality retailer" at the site.

URA Executive Director Jerome Dettore said the agency believed it has the power to control the use because it owns the air rights to the Lazarus-Macy's property.

Those rights were leased to Federated Department Stores to build the Lazarus-Macy's store. Dettore said that, as part of its purchase, J.J. Operating would have to negotiate an amended lease with the Pittsburgh Economic and Industrial Development Corp., an arm of the URA.

It is under that lease that the URA believes it can control the type of development that takes place at the site, Dettore said.

"That would be a requirement of the lease. If they consummate the deal, there would be controls on the use," he said.

But Samuel Jemal, president of J.J. Operating Corp., which has reopened old, vacant department stores in the Bronx, on Long Island and in Plainfield, N.J., disagrees with the URA's interpretation.

"We do not believe the URA has right of approval," spokesman Harry Zlokower said. "We will, however, take their views and advice seriously in whatever final tenant decision is made."

Dettore said representatives for J.J. Operating expressed concern during the recent meeting about the URA having approval rights over the development, particularly in how one defines "quality retailer."

"You have to bring them to us and talk about them. That's why we have right of approval," Dettore said. "They're not going to have free reign over who they want to bring in. It's that simple. It's a business issue for them."

Dettore acknowledged that the term "quality retailer" is "kind of subjective," but he added the city wants to see a development "that would contribute positively to the Downtown retail market" and help to revitalize the deteriorating Fifth and Forbes retail corridor.

"What it comes down to is that there has been a lot of investment in the building. We want to make sure that what gets added to supplement the retail district is something that adds value," he said.

"We don't want flea markets, second-hand shops."

Jemal has said he was confident that he could attract quality retailers. One option may be to divide up the 250,000 square feet among multiple tenants.

In a statement Friday, Jemal said his firm's goal was "to renovate the Lazarus-Macy's building and re-tenant it with one or more national chains as quickly as possible." Zlokower would not name any of the prospective retailers, but said they included "chains and other types of tenants."

He added Jemal did not believe the URA's insistence on a "quality retailer" for the site would not be an impediment in completing the property's purchase, which is expected to close by the end of the year.

The Jemals have bought and renovated more than 2.5 million square feet of vacant downtown department stores on the East Coast.

In partnership with White Plains, N.Y.-based Houlihan-Parnes, the Jemals renovated a five-story building in the Bronx once occupied by local department store Alexander's and discount retailer Caldor.

They decided to divide up the space, renting to Bally's Fitness, a clothier, an electronics retailer, a bank, a Verizon Wireless store, a day-care center and a women's apparel shop. Offices and classrooms filled upper floors.

In Newark, Jemal took a nine-story building and retrofitted it with offices and retail stores. They include clothing shops selling products such as athletic shoes, oversize T-shorts, sweat shirts, and baggy pants; an Old Navy store; and a Rite Aid pharmacy.

There are also a dozen telecommunications firms with offices on upper levels.

The Lazarus-Macy's building became available after Federated decided to close the store five years after it opened in late 1998. The store was built with $50 million in public assistance, a big part of it in the building of an underground parking garage.