The Society for Contemporary Craft will leave its longtime home in the produce terminal at the end of 2019 under a deal reached with the Chicago firm redeveloping the Strip District landmark.
Under the tentative agreement, McCaffery Interests agreed to extend the nonprofit’s terminal lease, set to expire at the end of the year, until Dec. 31, 2019, and provide financial support to help with a move to a new location.
The deal clears the way for McCaffery to finally gain control of the nearly vacant warehouse, once a hub for produce wholesalers, with plans to convert it into a food-centric market, restaurants, brew pubs, outdoor spaces, and other amenities.
Janet McCall, the society’s executive director, called the decision on the lease “bittersweet.”
“The bitter side of this moment is leaving the produce terminal. Who would not be sad about leaving their home of 32 years? But the sweet side is the prospect of a new beginning,” she said.
The city’s Urban Redevelopment Authority board had tentatively approved the transfer of the building to McCaffery in March, contingent on the start of negotiations with the Society for Contemporary Craft on a new lease.
In a 4-0 vote at its meeting Thursday, the board approved the lease extension on the URA-owned building while acknowledging the financial settlement between the society and McCaffery.
City Councilwoman Deborah Gross, who represents the Strip, questioned the action. She said a memorandum of understanding reached last year called for the retention of the Society for Contemporary Craft. The new agreement, she added, is “actually displacing” the arts organization.
Dan McCaffery, CEO of McCaffery Interests, could not be reached for comment.
The society, Ms. McCall said, already has been looking at potential new spaces, including locations in the Strip, Downtown, and on the North Side. It would like to stay in the urban core. She declined to disclose details of the financial settlement.
“It’s something that will help us as we move forward in our search for a new home,” she said.
Kevin Acklin, URA board chairman, described the settlement as a “meaningful financial investment by McCaffery Interests in the SCC that helps ensure their future and options for alternative space.”
Ms. McCall estimated the society will need up to $7 million to make a move to a new location. The settlement was reached based “on what we felt was the most responsible decision for future sustainability of the organization.”
Not being able to reach a long-term lease extension at the produce terminal was “really just a matter of economics,” Ms. McCall said. At one point, McCaffery had suggested moving the group to another part of the terminal, but that did not pan out.
The society slowly realized that the best move might to be another location, explained Susan Yohe, board chair.
“I think we held on to the notion that we might be able to stay there for a very long time. But it was responsible to say to ourselves but what if we can’t. And then we had better look to address that eventuality,” she said.
Beyond the society’s move, Ms. Gross said she had “grave concerns” about other aspects of the deal with McCaffery to redevelop the terminal. She raised questions about the 99-year lease and whether the URA would retain ownership.
She also questioned whether commitments on space for a public market, incubator space for businesses, and space for local retailers within the 1,533-foot-long structure would be honored.
“This kind of defacto sale of a large landmark public building we cannot get back,” she said.
But URA officials said at the meeting that the agency would continue to be the terminal’s legal owner under the lease with McCaffery. Under the deal, McCaffery will pay $2.5 million to rent the building for 99 years. Should it try to transfer the lease, the URA would have the right of first refusal.
Because of the way the agreement is structured, McCaffery also will have to pay real estate taxes on the property.
As part of the $62.6 million project, the developer is planning a “food-centric” locally owned market at the western end of the five-block-long structure. It also has agreed to lease at least 40,000 square feet within the complex for local and regional businesses focused on artisan food, crafts, produce, meats and creative arts.
URA officials said those plans are in keeping with the commitments Ms. Gross alluded to in her comments. Mr. Acklin stressed that the terminal isn’t being sold and that he will work to ensure the commitments made by McCaffery are part of an “absolutely air tight” legal document.
“I think there’s a difference between being in the stands and sending emails right before board meetings and actually doing the hard work like we’ve done to try to accommodate the concerns that I think have been presented to us,” he said.
In a separate action Thursday, the board approved an allocation of up to $1 million from the Pittsburgh Development Fund to help with loans to local and regional businesses seeking to open in the terminal or the surrounding Strip commercial corridor.
The Society for Contemporary Craft, meanwhile, is getting ready to embark on a new journey. It has been a mainstay in a 15,000-square-foot space on the east end of the terminal since 1986..
“We went to look at the first space and we kind of came out of there and looked at one another and said, ‘Yeah, there is life after the produce terminal,’” Ms. McCall said.
Mark Belko: mbelko@post-gazette.com or 412-263-1262.
Updated at 7 p.m. June 14, 2018.
First Published: June 14, 2018, 8:48 p.m.
