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Backbone of Pittsburgh's past could leave Golden Triangle

| Saturday, March 24, 2012

U.S. Steel Corp. is looking at moving out of its skyscraper headquarters that looms over Downtown as a symbol of Pittsburgh's legacy of steel.

Its lease at U.S. Steel Tower, the region's tallest building, expires in 2017, but the nation's largest steelmaker is scouting early for a site in the city or elsewhere in the region to relocate.

"We are investigating several options in light of business drivers such as cost, efficiency and logistics," said spokesman Chuck Rice. "We are exploring alternatives in order to arrive at the best long-term business solution for our company."

U.S. Steel occupies 14 of the skyscraper's 64 floors and employs about 1,500 people there, out of 39,000 worldwide.

"It would be a blow to have U.S. Steel leave Downtown, symbolically. We are known as the Steel City. It would be nice to have U.S. Steel remain here," said Arthur Ziegler Jr., president of Pittsburgh History & Landmarks Foundation.

"(Steel) was our leading industry, and U.S. Steel employed the most people in their day," Ziegler said. "They chose to build the tallest building at a very high site in the Golden Triangle, which is on an apex with The Point."

Ziegler noted the top of the tower aims directly down at The Point. He said the building's Cor-ten exterior demonstrated a new type of steel that rusted only on the surface to create a rich, brown color.

U.S. Steel formed in 1901, when financier J.P. Morgan led a group that bought Andrew Carnegie's steel interests for $492 million. U.S. Steel was the world's largest corporation and, that same year, was added to the list of companies comprising the Dow Jones industrial average. It was part of the Dow for 90 years until replaced by Walt Disney Co.

"It was in Pittsburgh, but its reach was far beyond Pittsburgh," said Perry Blatz, associate professor of history at Duquesne University.

U.S. Steel leaving the city would be "an important historic hallmark of change, but there are so many good and different things going on in Pittsburgh. Its old-time dependence on corporations and their power has been lessened," Blatz said. "It's an interesting thing, but not a predictor for the future."

U.S. Steel's Rice would not say where the company might relocate. He would not comment on whether U.S. Steel would move into an existing building or construct a new one.

A leading location may be Findlay. A 116-acre site there off McClaren Road, which is owned by the family of Oakdale District Judge Anthony Saveikis, could become a corporate headquarters.

"Jason Cannon of CBRE Inc. has been marketing the property, but I have no idea who may be interested in buying it," Saveikis said. He said the property has been under close inspection by a team of engineers exploring it for a client who has not been disclosed. Cannon could not be reached.

"I continue to hear rumors that U.S. Steel Corp. may be in the market for a new headquarters, but I have had no direct or indirect confirmation that it is looking at the property," Saveikis said.

Lou Oliva, of Grubb & Ellis, who has been leasing space at the McClaren Woods development in Findlay, said he has heard those rumors concerning U.S. Steel.

"I have a 100-acre site in the Westport Woods area near the airport available, which I have notified all the corporations - including U.S. Steel - of its availability," he said.

Occupying 450,000 square feet of space, U.S. Steel is the skyscraper's second-largest tenant. The largest is UPMC, the region's largest health care system, which occupies about 780,000 square feet, or about one-third of the building's 2.3 million square feet, and employs about 2,150 there. UPMC leased about 513,000 square feet in 2008 and placed its name in 20-foot-tall letters atop the building. U.S. Steel is known to have been considering a move from the building since that time.

The building is about 99 percent occupied, according to a survey from Jones Lang LaSalle, a Downtown commercial real estate company.

Mark Karasick, the head of a New York investment group that owns U.S. Steel Tower, could not be reached.

U.S. Steel moved into the tower in 1971, the year it was built on Grant Street. Prior to that, beginning in 1951, the company's headquarters was at 525 William Penn Place. That building is now Citizens Bank's area headquarters. Before the 1950s, the steelmaker was in the Carnegie Building, which stood where an addition to Kaufmann's (now Macy's) is now.

Commercial real estate experts say few existing buildings in Western Pennsylvania can accommodate U.S. Steel's current space needs.

"But there's a number of sites they could develop before 2017," when U.S. Steel's lease runs out, said Dan Adamski, managing director of Jones Lang LaSalle. "There's plenty of land around (Pittsburgh International) airport that the county owns." The area attracted Dick's Sporting Goods Inc. to build a corporate headquarters there in 2010.

He also pointed to land around Southpointe, a hotbed of Marcellus shale-related development in Washington County. He called the 911 acres across Interstate 79 "the region's best suburban park." Another company, Mylan Inc., moved its headquarters from Downtown to Southpointe in 2003.

Bob Beynon, CEO of Beynon Co. Real Estate, Downtown, said U.S. Steel might find the Union Trust Building across Grant Street to be a good candidate. "It has the size and the vacancy," he said.

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