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Friday133
08-26-2007, 08:21 AM
First Fruits: Fifth/Forbes corridor shows signs of progress at last
Sunday, August 26, 2007
By Mark Belko, Pittsburgh Post-Gazette
http://www.post-gazette.com/pg/images/200708/20070826jhMillcraft_500.jpg
John Heller/Post-Gazette
The Capital Grille in the former Lazarus-Macy's building.

The developer at the forefront of efforts to revive the Downtown Fifth and Forbes corridor tomorrow will give people something to sink their teeth into.
Online Graphic
See a map showing Fifth/Forbes development plans. (http://www.post-gazette.com/popup.asp?img=http://www.post-gazette.com/images4/20070826Fifth_Forbes_Millcraft.gif)



The public opening of the swanky Capital Grille steak house in the former Lazarus-Macy's store is the first tangible evidence of redevelopment in the downtrodden corridor nearly two years after Washington County-based Millcraft Industries rode into Pittsburgh as its white knight.
"I'm sure everyone is sick and tired of hearing everyone talk about it. This is evidence that it is happening and that we're actually doing it," said Lucas Piatt, Millcraft's vice president of real estate.


The opening comes about 20 months after Millcraft reached agreement with the Urban Redevelopment Authority to buy the building for $8.5 million. It signals the start of a construction blitz that could transform the corridor from dowdy to dashing.


As Capital Grille patrons dine on "dry-aged'' steaks, work crews soon will be erecting a steel skeleton on the building's roof to support construction of 65 luxury condominiums, a key part of Millcraft's $70 million in redevelopment plans for the store.
In November, another chain restaurant, McCormick & Schmick's, will join Capital Grille on the first floor.


Before the end of the year, Millcraft also hopes to get started on another key redevelopment -- the conversion of the old G.C. Murphy store on Fifth Avenue into shops and apartments.


The anchor for the $32 million Market Square Place project will be the Downtown YMCA, which will move from its current location on the Boulevard of the Allies. Millcraft also is planning 46 upper-floor apartments priced to attract residents earning $40,000 to $50,000 a year.


Across from Murphy's on Fifth, construction of the Three PNC Plaza tower, Downtown's first new skyscraper in two decades, also will be moving into full bloom this fall. The shell is scheduled for completion at the end of 2008, the same time the redeveloped Murphy's building is to open.


The Reed Smith law firm will move its Pittsburgh offices into PNC's 23-story skyscraper, which also will feature 28 condos and a 185-room hotel to be managed by Fairmont Hotels & Resorts, operator of the Fairmont in San Francisco and The Plaza in New York City. The hotel will open in 2009.
To Mayor Luke Ravenstahl, the opening of the Capital Grille "reaffirms the fact that we are bringing Downtown Pittsburgh back to life."
"I think it really once again allows Pittsburghers to see that what previously had been a dream is now becoming a reality."


But so far neither the two Millcraft projects nor the Three PNC Plaza construction has produced much spin-off in the corridor, for the most part a collection of vacant storefronts, convenience stores, discount clothing, novelty outlets and other lower-end retail.
A
decade ago, former Mayor Tom Murphy had hoped to use the construction of the government-subsidized Lazarus-Macy's store as a linchpin to spur development. But that never happened, and the store ultimately failed after five years at the corner of Fifth and Wood.


Tom Sullivan, a commercial broker with Pennsylvania Commercial Real Estate, said some property owners don't have the financial wherewithal to improve their buildings. "A number of people, particularly retailers, are doing their best to hang on. They simply don't have the money or the credit, I suppose. So much has been on hold for so long. It's not the most fertile of retail environments," he said.


Toward that end, Mr. Ravenstahl said, the city, through the URA, may make some storefront-renovation grants available to property owners in the Fifth and Forbes corridor. He said the Millcraft and PNC projects, as they open, could help to stimulate more development. "I believe that once that happens with G.C. Murphy's, once that happens with PNC, once that happens with Piatt Place, then all of the sudden that property becomes more valuable and I think you're just going to see, slowly but surely, the gradual growth around those areas happen," he said. "Just like it's taken time to get where we are now, it's going to take time to revitalize all those blighted areas of Downtown."


Herky Pollock, the executive vice president of real estate firm CB Richard Ellis/Pittsburgh who is helping to market the Millcraft projects, said that until now, other property owners in the corridor have not had the benefit of the foot traffic from the Capital Grille and Piatt Place development.
"Once they see the potential of a quality establishment and the rents they're able to garner, these developers most definitely will realize the opportunity before them," he said.


While Mr. Sullivan believes more office development -- not residential -- is the key to revitalizing the corridor, Mr. Pollock disagrees. He said residential not only will boost retail Downtown, it will bring a "great diversity which has been sorely lacking."


"I think that if you look around the country, the most successful business districts have a strong residential component."
Mr. Pollock said he has received a lot of interest from national and regional retailers in the Murphy's building with the addition of Capital Grille and McCormick & Schmick's to the Downtown menu.


And Mr. Ravenstahl said he has been approached by a number of out-of-town developers with an interest in further developing residential space Downtown or in the Strip District.
At Piatt Place, Millcraft has sold 35 percent of the 65 condos available, a pace with which Mr. Piatt is comfortable. He believes that will pick up with the opening of the restaurants.


The developer has been unable to interest anyone in the 180,000 square feet of office space available in the building. But Mr. Piatt believes it's only a matter of time before someone bites. "We have some great prospects. Hopefully we'll be getting something soon. I still feel optimistic about it. The office market is better than it has been the last several years. I'm pretty confident that we will land a big one shortly," he said.


One Downtown property owner who is happy to see the addition of Capital Grille is David Kashi, owner of Kashi Jewelers at Fifth and Wood opposite the restaurant. "Pittsburgh needs something like that," he said. "It gives an upscale look to the city, don't you think?" Mr. Kashi has been in business at Wood and Fifth since 1987. He is torn between selling his property and retiring or redeveloping it to put housing on the upper six floors, maybe keeping a top-floor penthouse for himself. He maintained the view is the best in town.


"You don't think you're in Pittsburgh. You think you're in New York," he said. "You think, wow, that's so beautiful. That's Pittsburgh?"


http://www.post-gazette.com/pg/07238/812146-53.stm

:plus1: This is nothing but good news for that area of the city.