An emerging deal between the Port Authority and developer The Mosites Co. could improve bus and car flow in East Liberty and bring more stores to the booming Eastside district, the transit agency's board learned yesterday.

Once they're done rearranging a four-acre site where the East Busway, Penn Avenue and Penn Circle meet, it may include yet another complex of stores and offices in the neighborhood. Gone may be a clumsy bus loop, and cars should be able to travel both north and south along the eastern flank of Penn Circle.

The site is dubbed the Eastern Gateway because it "really is, to our mind, the gateway to East Liberty," said Ernie Hogan, deputy director of East Liberty Development Inc., which is involved in the plan. "Right now it functions as a one-way gateway."

One-way traffic along most of Penn Circle is viewed as one of the biggest barriers to yet more growth in East Liberty. It prevents the easy flow of people from the neighborhood's residential, northern half to the booming Baum-Centre corridor to the south.

Studies showed that two-way traffic from South Highland Avenue to Collins Avenue wouldn't work as long as the bus turn-around came right up to the Penn Avenue intersection. The city of Pittsburgh would need a slice of land there to make the altered intersection work.

Meanwhile, Robinson-based Mosites, which is trying to build on the success of its Eastside development, was frustrated by the site's property lines. The bus turn-around covers around 1.5 acres, while the developer's 2.5 acres is occupied by the National Indoor Tennis facility, the former Kingsley Association building and a parking lot.

Now, the developer and the agency plan to share or swap land to allow alteration of the bus flow and construction of a new store-and-office complex. Mark Minnerly, Mosites director of real estate development, said the site could support 120,000 square feet of stores and an equal amount of office space, though the exact mix would depend on the tenants and the need for a parking garage or deck.

The arrangement with Port Authority "allows us each to use essentially the same amount of land, but more efficiently," Mr. Minnerly said. This year they'll plan the site, and construction may start in 2009.

Port Authority hasn't estimated its construction costs, nor plotted the service changes that will occur while the loop is changed.

Port Authority spokesman David Whipkey said 33,000 riders pass through its East Liberty hub daily.

He said the agreement to cooperate on the site "shows that we're interested in helping to cultivate the area as a whole, and bring East Liberty back to where it once was. There's a lot of potential there."

Making Penn Circle more navigable is crucial to both the developer's and the neighborhood group's efforts.

"Two-way traffic would be a key to having a major anchor tenant such as a Target or another major retailer," said Mr. Minnerly. Target wouldn't fit on the Eastern Gateway site, he said, but could go elsewhere in the neighborhood.

ELDI plans to build 40 rental units and 50 for-sale homes on part of the former Liberty Park public housing development near Collins Avenue, Mr. Hogan said. Two-way traffic from there to South Highland would give residents a straight shot to jobs in Shadyside and Oakland.

It also would allow easy travel between East Liberty stores like Whole Foods and Larimer's emerging Bakery Square, a 285,000-square-foot retail-and-office complex at the former Nabisco bakery.

Bakery Square, a Walnut Capital project, is pivotal to funding the repair of Penn Circle.

The city expects to spend $2.8 million making the circle's eastern edge a two-way street. Of that, $2.5 million will be financed with new tax revenue from Bakery Square.