The new year finally may bring new life to the Strip District’s iconic produce terminal.
Chicago-based McCaffery Interests is expected to formally complete a transaction with the Pittsburgh Urban Redevelopment Authority within 30 to 60 days to take control of the prized Smallman Street landmark.
That control will come in the form of a 99-year lease. Although the URA will continue to own the building, McCaffery will pay taxes on the real estate, which is currently tax exempt.
The closing will clear the way for a $62.6 million redevelopment that is expected to include a “food-centric” market at the terminal’s western end, restaurants, brew pubs, offices, and pedestrian passageways to allow access to the Allegheny River.
After nearly five years of delays and protracted negotiations, the transaction marks the final step in McCaffery’s odyssey to secure the 1,533-foot-long warehouse.
“This will be a monumental milestone,” URA executive director Robert Rubinstein said Wednesday.
Dan McCaffery, CEO of McCaffery Interests, said he plans to start construction on the massive makeover as soon as he closes on the real estate.
He also hopes to close on the purchase of a building across the street at 1600 Smallman at the same time. He plans to convert that property into office and first-floor retail, with a 179-space parking structure to be built next to it.
The total investment in the two projects is estimated at $100 million.
McCaffery already has lined up commitments from some tenants interested in being in the produce terminal but has yet to execute any leases. Mr. McCaffery said that’s impossible to do until he has control over the old warehouse, once the region’s hub for produce wholesalers.
“There’s a significant amount of interest,” he said.
The developer’s plan for the terminal includes a “food-centric” locally owned market featuring a chef incubator kitchen, grab-to-go foods, and coffee and cocktail bars.
McCaffery also has agreed to lease at least 40,000 square feet within the complex to local or regional businesses focused on artisan food, crafts, produce, meats, and creative arts.
There also are plans for restaurants, brew pubs, fitness space, and perhaps even “urban size” drug and hardware stores to cater to the growing residential population in the Strip.
The mix is designed to “complement not compete” with the Penn Avenue commercial corridor featuring its eclectic blend of shops, food stores, and restaurants.
As part of the terminal’s overhaul, there also will be pedestrian passageways built at 17th, 18th and 20th streets.
McCaffery also intends to widen the dock facing Smallman to provide for outdoor dining and strolling. There will be 274 spaces of surface parking available on the river side of the terminal.
As part of the redevelopment, the Society for Contemporary Craft will be forced to leave its longtime space at the eastern end of the terminal by the end of 2019 under a deal reached last June with McCaffery.
In conjunction with the terminal and 1600 Smallman projects, roughly $24 million in upgrades are being made to Smallman between 16th and 21st streets to bolster pedestrian access, safety and circulation.
McCaffery deems such improvements as crucial to the success of the redevelopments.
While Mr. McCaffery joked Wednesday that his nearly five-year quest to gain control of the terminal “feels like a lifetime,” he had nothing but good words for the city and the URA.
“This is a four- to five-block stretch of your city that was in need of some pretty significant consideration and the city’s done a great job. It’s taken time. [The city’s] pulled the pieces together that have allowed us to close,” he said.
“It’s been a joint venture that has really yielded tremendous collaboration and cooperation between the city, the state, and ourselves.”
As part of the deal for the URA-owned terminal, McCaffery will pay $2.5 million to lease it for 99 years. If the company were to try to transfer the lease, the URA would have the right of first refusal.
McCaffery became involved after Mayor Bill Peduto objected to a plan pitched by the Buncher Co., which at one time held the development rights to the property, to demolish the western third of the structure as part of a proposed makeover.
Mark Belko: mbelko@post-gazette.com or 412-263-1262.
First Published: January 3, 2019, 12:00 p.m.
Updated: January 3, 2019, 12:10 p.m.
