Extension for deal on city plan gets an OK
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A Columbus, Ohio, developer will get up to 90 days to try to finalize a deal with a prospective tenant for a three-story office and retail complex it is proposing to build on the North Shore near Heinz Field.
Pittsburgh Stadium Authority board members unanimously approved the extension Friday with Continental Real Estate Cos., giving the developer more time to close on the land it needs for the $26 million development.
Without the extension, Continental would have faced a year-end deadline to complete the transaction.
Barry Ford, president of development for Continental in Pittsburgh, said the developer and its broker, Jason Stewart of the Jones Lang LaSalle real estate firm, have been in negotiations with an unidentified tenant interested in taking the third floor of the 120,000-square-foot complex.
"Unfortunately, time ran out this year to get that lease done," Mr. Ford said. "We're very close. We've exchanged leases. We believe we've got the terms. We just need a little extra time to land a key tenant that will occupy the third floor of the building."
Continental originally planned a two-story complex at the site on North Shore Drive between Chuck Noll Way and Tony Dorsett Drive. But it decided to expand the development to three stories last fall after expressing confidence about the demand for office space on the North Shore.
The stadium authority also had expressed an interest in a larger development. Michael Danovitz, the authority board chairman, said Friday a three-story structure is the authority's "preferred" option. He said he was willing to grant the extension "just so you can have a little more time to get that density and that third floor."
Mr. Ford said that without a deal with an anchor tenant it would be practically impossible to secure the financing needed to add a third floor to the development. It does not have a tenant for the second floor.
"You can't build an empty building in this marketplace," he said.
Continental already has secured leases with Toby Keith's I Love This Bar & Grill and North Park Lounge to anchor 40,000 square feet of ground level retail space. It also is working on a deal with the Burgatory restaurant.
The North Shore Place I and II development, which technically is considered two buildings linked by an enclosed pedestrian bridge, is the first advanced by Continental, in partnership with the Steelers and Pirates, since the authority board voted last year to amend a 9-year-old option agreement with the teams and extend the deadlines they had missed for developing the land between Heinz Field and PNC Park.
Under that timetable, Continental must have the project started by March. Whatever is built, Continental hopes to have it finished in 2014.
Last spring, the authority approved conceptual plans for the project and voted to sell the 1.3 acres needed for the complex to Continental and the teams for $900,000, the appraised value.
In 2011, Alco Parking Corp. president Merrill Stabile offered $10 million for a 3.3-acre North Shore site that included the Continental property and proposed to build a "signature office tower" on the land. The authority effectively killed that bid by choosing to amend the option agreement with Continental and the teams.
Sixth in a series on how our economy has transformed since bottoming out a generation ago.
Our regional economy barely resembles the one from 30 years ago. A full generation has passed since January 1983, when the southwestern Pennsylvania economy was at its nadir and unemployment was at its all-time peak.
Saturday: Of the top 25 retail banks in the seven-county Pittsburgh region in the 1980s, just nine are in business today. Although they survived the 1983 collapse, they couldn't survive regulatory changes and the most recent financial meltdown.
Sunday: In many ways, Downtown is a reflection of the region at large. After struggling for years, Downtown is coming back strong with a resurgent office market and a surprisingly strong residential side.
First Published December 29, 2012 12:00 am