Closed Saks site may be converted to parking garage
The Pittsburgh Urban Redevelopment Authority is considering a 500-space parking garage with street-level retail stores on the site of the former Saks Fifth Avenue department store Downtown.
URA board members on Thursday approved taking an option to buy the building at Smithfield Street and Oliver Avenue for $4 million from the owner -- the Levitt Family Oliver Smithfield Irrevocable Trust. The 62,682-square-foot, three-story building has been empty since Saks closed in March.
Observers lauded the proposal as a "home run" for Downtown, saying Pittsburgh's central business district desperately needs more parking.
"Downtown needs about 1,500 to 2,000 more parking spaces," said Merrill Stabile, president of Alco Parking Corp., which manages or owns most of the parking on the North Shore. "I have always advocated to anybody involved with city development that two or three more garages are necessary in the city. If we don't improve the supply, we're going to lose opportunities, and that won't be good for anybody. In my opinion, this will be a plus for everyone."
URA Chairman Yarone Zober, who also is chief of staff to Mayor Luke Ravenstahl, said the URA would partner with the Pittsburgh Parking Authority. The option to buy is for six months with a possible three-month extension.
"We will use the six months of our option to do our due diligence on the site as well as an engineering design to determine ... how many parking spaces can be built," Zober said.
Retail space would be available in the proposed parking deck along Smithfield Street. The development would include a URA-owned building formerly occupied by Wendy's restaurant on Fifth Avenue and a vacant building next door, for which the URA has an option, he said.
The building is attracting offers, according to Herky Pollock, CBRE Inc. executive vice president, who has represented the Levitt trust. He declined to name interested parties.
"There have been multiple parties and offers," he said. "This is truly a great day for Pittsburgh. The long-time owners of the building will garner a very fair-market price, while the city will acquire a property that will be the catalyst for redevelopment of the Mellon Square and Smithfield Street corridor," Pollock said.
Stabile and Jeremy Waldrup, CEO of the Pittsburgh Downtown Partnership, said parking demand will increase with new development Downtown.
PNC Bank recently purchased the former Lord & Taylor building on Smithfield and intends to convert it into an office with 800 employees. PNC is building a new 30-story headquarters building at Fifth and Wood Street. And Millcraft Industries Inc. has proposed a new Hilton Garden Inn and office tower on Forbes Avenue. Those projects combined with PMC Properties Group's acquisition of the Regional Enterprise Tower and McKnight Development's redevelopment of the Henry W. Oliver building, will add to parking congestion, Pollock said.
"I think (a garage) is definitely something we're going to need, and it's in a central location," Waldrup said. "I think it's a great use of that space. I don't think we're going to find another retail tenant to go into (the Saks building)."
Jeremy Kronmann, a commercial real estate agent with CBRE Inc., said the idea mirrors previous Downtown development.
"The purchase seems to fit in with how the city handles buildings Downtown, such as the conversion of the former Gimbels building (into Heinz 57 Center), the former Lazarus Building (now Piatt Place) and the recent sale of the Lord & Taylor Building to PNC," he said.</