One Grandview complex depends on availability of financing
Demolition of the long vacant Edge Restaurant property on Mt. Washington will begin next week, officials said at a ceremony yesterday.
But once the restaurant building, closed for 30 years, and adjacent apartment units are demolished, the developer's proposed $100 million One Grandview complex rests on his ability to obtain financing.
Developer Beau Beemsterboer said it could take six to 10 months to obtain full financing for construction.
For such a high-profile project, the developer will probably need more than one lender, said one real estate expert.
"Underwriting standards to obtain financing for commercial projects remain very stringent, and the principals of this development should have deep pockets in order to obtain general construction financing," said Nick Matt, senior vice president, CB Richard Ellis.
Beau Beemsterboer is the son of Steven Beemsterboer, former president of Beemsterboer Slag Co. of Chicago, who proposed the Edge development in 2008 with Luke Desmone of Desmone & Associates of Lawrenceville. Desmone first advanced the project several years ago.
South Holland, Ill.-based Beemsterboer Slag is a more than 70-year-old, family-owned business with interests in coal, coke and other commodities.
At the ceremony that included Mayor Luke Ravenstahl, Beau Beemsterboer said he is confident financing will be obtained. He estimated it will take 24 to 30 months to complete the project.
Ravenstahl presented him with a permit to begin demolition.
The proposal includes a 20-story hotel that has been approved for 163 rooms, two restaurants, a spa, fitness center, 55 condominiums and a 472-space parking garage. The site is at the corner of Grandview Avenue and Wyoming Street.
In front of the hotel will be a public grand plaza, roughly the size of a football field, which Beemsterboer said will allow visitors to view Downtown and fireworks displays.
Beemsterboer, the vice president corporate strategy for Sycamore Grandview Development of South Holland, said if the hotel chosen requires more guest rooms, the number of condominiums in the hotel may be reduced.
Workers are scheduled to start demolition on Monday, with Independence Excavating Inc. taking four to six weeks to do the work, he said.
"We will crush and recycle the material from the demolition, and there will be very little landfill needed," Beemsterboer said.
A chain to operate the hotel planned for the complex has not been selected, he said. "While we have heard from practically all the hotel chains interested in operating the hotel, we have not yet made a decision on which brand to choose."
The project has been supported by the Mt. Washington Community Development Corp. and a petition signed by more than 2,000 Mt. Washington residents. It has drawn criticism from some residents of Sycamore Street, which is adjacent the site, over potential traffic problems the complex could create in that area.
Pittsburgh is not a strong condominium area, and many lenders require a number of pre-sales before financing the developments, Matt said.
Some major projects on Mt. Washington have had financial difficulties over the years. Trimont Condominium developer Chris Passodelis ran into financial problems when the original lender dropped the project. Mellon Bank -- now BNYMellon -- took control of the project in the mid 1980s and saw it to completion.
Two medium-size condominium projects along Grandview Avenue in Mt. Washington remain stalled. The developer, Craig Cozza, said that because of the recession, he has been unable to secure financing.
There have been numerous proposals for development of the Edge site in the past.
In 1995, developer William Kershbaumer of Fox Chapel proposed building a Ritz-Carlton Hotel there, but his project died for lack of financing. In 2005, Penn Hills developer Dan Kesneck proposed building 10 residential condominiums on site, but the project never was started.
History of the Edge
1966 -- The Edge Restaurant is opened by The Outer Edge Inc.
1972 -- A 30-room motel, attached to the restaurant, is closed.
1974 -- The Edge and the motel are sold to Dr. William G. Everett and Dr. Fran Hurite who convert the motel rooms into 15 apartment units.
1979 -- The Edge Restaurant closes.
2006 -- Architect Luke Desmone proposes development of hotel and other facilities on Edge site, but lacks a developer.
2008 -- Chicago developer, Steven Beemsterboer, of Beemsterboer Slag Co., proposes current development of Edge property and hires Desmone as his architect. Beemsterboer begins buying properties along Vinecliff Street, behind the Edge site, toward the development.
2010 -- Beemsterboer purchases the Edge property from Dr. Hurite for $3.6 million.
2010 -- Pittsburgh City Council approves Edge plan.