Saks site to become retail space, parking garage
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Once a haven for upscale retailers like Chanel and Louis Vuitton, the former Saks Fifth Avenue department store on Smithfield Street, Downtown, soon could be a stop for Chevys and Hondas.
The city's Urban Redevelopment Authority board moved Thursday to buy the vacant Saks building for $4 million, with the intent to demolish it and replace it with a public parking garage and street-level retail.
Its decision came three days after PNC Financial Services Group completed its $3.85 million purchase of the empty Lord & Taylor building across the street from Saks with plans to convert it into offices for at least 800 employees.
URA board members voted unanimously to enter into an option-to-purchase agreement on the Saks building with the Levitt Family Oliver Smithfield Irrevocable Trust, Irving F. Levitt, Robert B. Levitt, Linda L. Ehrenpreis and Maurice and Hilda B. Parker.
The owners had been asking $5.5 million for the four-story building.
"We feel it's a competitive number," URA board chairman Yarone Zober, chief of staff to Mayor Luke Ravenstahl, said of the sales price.
Under the deal, the authority will retain the right to purchase the 62,682-square-foot structure for six months, with the option to extend the agreement another three months.
If the URA completes the sale, it plans to demolish the structure and work with the city's parking authority to build a garage with roughly 500 spaces at the site, Mr. Zober said.
Some of those spaces likely would be below ground and others above ground, he added. The URA also hopes to construct new street level space for "high-level, high-class" retail to help anchor the corridor. It plans to retain the air rights above the garage for possible office or residential construction.
"To me, this is a good deal. It will be a game changer for Downtown," said state Sen. Jim Ferlo, a URA board member.
The URA intends to couple the Saks property with two other buildings on Fifth Avenue -- the authority-owned Wendy's building and one next to it owned by URA board member William Rudolph -- to form an L-shaped site for the garage and new development.
While a parking garage may not be as exciting as a new office building or department store, Mr. Zober said it is very much needed Downtown.
That's particularly true, he noted, given PNC's plans for the Lord & Taylor building, the conversion of the upper half of the former Alcoa building on Sixth Avenue into apartments, and the proposal to turn the top half of the Oliver Building on Smithfield into a hotel. Oxford Development Co. also has announced plans for either a 33-story high-rise or a major renovation of the 441 Smithfield St. building a block from Saks.
While there are now 26,816 parking spaces in the central business district, Mr. Zober said the mayor's Downtown retail working group has recognized the need for even more parking.
"We think it's a winner any way you look at it," he said of the plan.
Herky Pollock, the CBRE executive vice president who served as the broker for the sellers, said the plan would serve as a "catalyst" for hotel, retail and residential development in the corridor. Besides the Oliver Building, a hotel could be in the works at the vacant James Reed building on Sixth Avenue, he noted.
Coupled with the conversion of the Lord & Taylor building into offices and the potential retail and residential uses at the Saks site, "Mellon Square won't even resemble itself in 24 months," he said.
He added the deal was a good one for both sides.
"The seller will be able to garner a very fair market price and at the same time the city's able to acquire a property that will become a catalyst for the redevelopment of the Mellon Square and Smithfield Street corridor," he said.
Mr. Zober promised that the garage would qualify for U.S. Green Building Council Leadership in Energy and Environmental Design certification.
"We want this to be a project that we can all look at and be proud of, not just a garage for a garage's sake to park cars but also an architectural statement about Pittsburgh's rebirth, Pittsburgh's renaissance," he said.
Before completing the purchase, the URA will spend time engaging engineers and architects to make sure the plan for the garage and the other potential uses is feasible, Mr. Zober said. He did not have a cost estimate for the garage, which would be built in partnership with the parking authority.
Peter Sukernek, vice president and general manager of Howard Hanna Commercial Real Estate Services, called the $4 million the URA intends to pay for the property a "fair price" given that the Saks building is empty.
He backed the plan for the 500-space garage at the site.
"We need parking Downtown. One of the most difficult issues that we deal with Downtown is the lack of a sufficient amount of parking spaces. People who would come Downtown don't because of parking issues," he said.
Mr. Sukernek added that he thinks the plan to demolish and build anew is better than trying to renovate the Saks building.
"That is a functionally obsolete building," he said.
First Published June 15, 2012 12:00 am