New owner of SouthSide Works working to reinvigorate development
The new owner of Pittsburgh’s SouthSide Works said his company plans to create more office and residential space and include more local businesses as part of its $25 million plan for revitalizing the former steel mill property along the Monongahela River.
Ian Ross, managing principal of New York-based Somera Road Inc., said that the company was already “deep in the mix” of upgrading existing office and retail space on the 34 acres formerly owned by the Soffer Organization.
The company, which acquired the property early this year, has signed two new office tenants and will likely develop two of the last three vacant parcels for offices and housing, Ross said.
“We really need a higher percentage of office and residential, and we’ll focus on growing those pieces of the pie when we look at those two development sites,” Ross said. “Whether it’s some mix of condo/rental projects or office projects, I think were going to be open-minded. We’re going to react to what the market determines is best suited for that space.”
He said the residential and office portions would play key roles in creating a perfect “live, work, play” mix and regenerating business that has slowly evaporated in recent years. About 50% of storefronts are vacant, he said. Residential buildings are in the 90% occupancy range, and office space is between 75% to 80% occupied.
“The mistake about some of this retail is they focused on big box national tenants who really weren’t locally minded and suited for the neighborhood,” Ross said. “The one thing we’ve seen in Pittsburgh is Pittsburgh is local. People don’t want national tenants. They want the tenants that were born and bred in Pittsburgh.”
He said the company is currently working with local realtors to bring in new retail and office clients. It recently signed leases with TMS International, a steel mill service provider, and the greater Pittsburgh chapter of the Alzheimer’s Association.
He said the company has new retailers lined up, but declined to name them. He said development of the vacant parcels would come next.
“We absolutely do have some really exciting stuff that we’ll be announcing in the coming months with regards to the retail and public space,” he said.
South Side residents browsing the SouthSide Works on Monday said they’d like to see more businesses geared toward residential needs and more affordable housing.
“It’s nice having like the Aldi here, the pet store and LA Fitness, stores that have things that I need on a daily basis,” said Mike Laudato, 47. “I think the stores that were down here were a little bit too high end.”
The Pittsburgh Urban Redevelopment Authority board last week extended a development agreement previously held by Soffer that would include a 99-year lease of the two parcels if Somera meets deadlines for starting work. Soffer’s agreement was due to expire in July.
Robert Rubinstein, former URA executive director and now its director of special projects, said the retail industry has shifted since SouthSide Works opened in 2004.
“It’s a national scenario,” Rubinstein said. “Having retail centers are difficult business. It’s lifestyle; it’s entertainment, experiential use, restaurants, movies, music. Those are really the things that people will go to. Younger people do most of their shopping online now. Most people come home, they want a dry cleaner. They want a place for their dog. They want to pick up meals ready to eat and take back to their apartment. They want a yoga studio. They want a hair salon, barber, pharmacy.”
City Councilman Bruce Kraus, a lifelong South Side resident who represents the neighborhood, said Somera Road is moving in that direction.
“I do think the most successful component of SouthSide Works always has been the housing,” he said. “I think retail has shifted. They need to re-imagine the retail to be more resident-centric as opposed to being more retail-centric.”
The two parcels eyed by Somera include vacant land near the Hofbräuhaus Brewery and Restaurant and Hyatt House Hotel, both along Water Street overlooking the river.
Under the agreement, Somera would make annual payments of $27,072 per acre on the 1.714-acre property near the Hofbräuhaus if the URA approves its development plans by July 20, 2021. The price per acre increases to $55,000 if approval happens by Nov. 1, 2021, and to $91,615 per acre after that.
Annual lease payments for the 0.745-acre property near the Hyatt House would be $27,072 per acre if Somera meets a Nov. 1, 2021, deadline and $78,209 after that.
The URA would have an option to market the property to other developers if Somera fails to receive approval by July 1, 2022, according to the agreement.
Ross said he was confident development of the Hofbräuhaus property would begin within a year.
The URA agreed to a long-term lease for a nominal fee on the third vacant parcel at Sidney and South 28th streets so long as Somera develops and maintains it as public space that would include such things as a farmer’s market, dog park or public art.
Ross said the company plans to spend $2 million improving public space throughout the complex, including a town square area. Improvements would include art exhibits and way-finding signs, he said.
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