'350 Fifth' tower could revive sparkle in heart of Downtown
Oxford Development Co. supplied two visions to upgrade Downtown's sliding Smithfield Street corridor on Thursday: A $238 million office tower rising 33 stories between Fifth and Forbes avenues by late 2015, or a $40 million upscale renovation of the seven-story building at 441 Smithfield by mid-2014.
Either way, the developer intends to start work on "350 Fifth," as the building will be called, by autumn, said Oxford CEO Steve Guy during a news conference at One Oxford Centre.
"It will become an iconic building," said Guy afterward, adding that 350 Fifth would serve as "the entrance to the Smithfield corridor."
Guy said either construction option would require a public subsidy, but the amount or type had not been determined.
"Everything requires a public subsidy today, especially when it's a major development," he said.
Said Pittsburgh Mayor Luke Ravenstahl, "We look forward to being a partner, no matter what option they choose."
Smithfield Street has seen better days. The former Lord & Taylor building has been empty since late 2004. Saks Fifth Avenue department store vacated its building in mid-March. And Macy's, across the street from Oxford's site, downsized from nine to six floors of retail space late last year and continues to try to sell its building.
"Anything that goes in there would help," said Rich Beynon, president of Beynon & Co., a commercial real estate broker, referring to the vicinity as the center of town.
"No matter which option is done, it will end up being a positive for the neighbors and Downtown in general," said Beynon, former chair of the Pittsburgh Downtown Partnership board. "Oxford has laid the groundwork, saying here's the opportunity if tenants step up."
Oxford's choice will depend on whether it can land big tenants. The high-rise would need an anchor that could take at least 40 percent of the space. Oxford has been in discussions for about a year with potential tenants, Guy said.
"There's a significant number of high-quality tenants that would be perfect for this project," said Guy, but he declined to name any.
Speculation centers partly on U.S. Steel Corp., which in recent months has been quietly looking for alternative space.
"Our lease at U.S. Steel Tower expires in 2017, and we have been actively exploring alternative local sites from our current location," said company spokesman Chuck Rice, who declined to elaborate.
Other potential anchor tenants include shale gas explorers Royal Dutch Shell plc, Exxon Mobil Corp. and Chevron Corp.
"We have looked at downtown Pittsburgh and other sites in the area for a new regional office but have not made any decision. A decision may come soon," said Nathan Calvert, spokesman for Chevron in the region.
No one at Exxon Mobil and Shell could be reached for comment.
"Oxford was the key player in Pittsburgh's second renaissance," said Ravenstahl during the news conference, referring to the developer's construction of One Oxford Centre on Grant Street 30 years ago.
"So it's only fitting that Oxford would step up and be a key player in Pittsburgh's third renaissance," he said.
Beynon said it's typical for Downtown construction to pick up when Class A space occupancies reach 90 percent. Average vacancies Downtown are below 7 percent, meaning Class A space is about 93 percent occupied.
The tower would have space suitable for an anchor tenant in its 772,000 square feet of space, including 656,300 square feet of office space.
The ground floor would feature a two-story atrium and 11,400 square feet of retail and restaurant space. Atop the tower would be a sky deck with city views.
The $40 million renovation, if that option is chosen, would have 180,000 square feet of office space and 20,000 square feet of retail and restaurant space.
Whether 33 or seven floors, the building would be LEED-certified, said officials, referring to the Leadership in Energy and Environmental Design designation.
The existing building, which would be demolished if Oxford builds the high-rise, is seven stories of concrete and light brick with a First Niagara Bank branch at street level. It was built in 1917 as the Frank & Seder department store.
Leases in the building are being allowed to expire so Oxford can take control of the structure, the company said. If it's renovated, the building would feature open floor plans, a rooftop deck and redesigned retail space with outdoor seating.
"Clearly, a renovation is easier to pull off," Guy told reporters. But the developer would rather put up "an iconic high-rise," he said.
A new high-rise would become one of three towers that soon will rise in the Golden Triangle.
The Tower at PNC Plaza, a $400 million, 33-story "green building," is under way at Wood Street and Forbes Avenue and should be completed by mid-2015. Plus, construction should start this year on the Gardens at Market Square, a $77 million, 17-story hotel, office and retail complex along Forbes Avenue.
The PNC project is getting no public money.
Oxford said the high-rise would create 450 construction jobs and 2,500 permanent jobs. The developer said the renovation would create 125 construction jobs and 800 permanent jobs.