A new plan to redevelop the Pittsburgh Strip District's landmark Produce Terminal largely for commercial use is similar to an old one that Mayor Bill Peduto halted more than two years ago.
“But one-third of the building isn't demolished” under the latest, $65 million proposal, Urban Redevelopment Authority Chairman Kevin Acklin said Monday.
Another key difference: the latest proposal by Chicago-based developer McCaffery Interests would require at least some public subsidy, unlike a previous $25 million plan by the Strip District's Buncher Co. that did not require taxpayer help but stalled because of opposition from historic preservationists. URA officials could not say how much public money McCaffery's proposal would require.
“Financing details, including any public financing, will be fleshed out over the next six months or so, in large part depending upon costs associated with Smallman Street improvements,” said the URA's Acting Executive Director Robert Rubinstein.
Acklin said the public funding could include government loans, federal historic tax credits and money generated through a tax-increment financing district, which would divert increased tax revenue for public improvements.
Under the latest proposal, the terminal would remain publicly owned — a sticking point because city officials view the terminal as a public asset that should be preserved. Acklin said state law would allow for the property to be taxed under a proposed 99-year lease with McCaffery.
“There has been a fair amount of give and take on both sides,” McCaffery Interests CEO Dan McCaffery said.
URA's board of directors is scheduled to vote Thursday on whether to accept McCaffery's preliminary plan for the Produce Terminal. Six to nine months would be required to finalize the deal and get approval from city officials to begin construction, Acklin said.
As for the years-long delay, Acklin said, “We think it was time well spent. We think the development is much better than originally envisioned.”
The current incarnation calls for a “food-centric proposal” that would include more than 57,000 square feet of office space; and 65,000 of new retail space, including restaurants and a public market or grocery. The five-block-long building would have 18 apartments, Acklin said.
After Peduto sought alternatives to Buncher's plan in 2014, McCaffery emerged as the company to redevelop the Produce Terminal. Its original, $46.4 million plan called for 118 loft-style apartments and retail and office space.
“The revised proposal has evolved in response to dialogue that has taken place over the last year and a half with community stakeholders and elected officials,” Acklin said.
The latest plan envisions three pedestrian walkways that would cut through the building at 17th, 18th and 20th streets, tearing 6,600 square feet out of the historic building but improving access between the Strip and land along the Allegheny River where Buncher Co. is planning to invest hundreds of millions of dollars in private development, Acklin said.
“We are glad to see the project moving forward. It is important to the neighborhood,” said Mike Kutzer, Buncher's vice president of real estate development.
Kutzer said his firm's development partner, NRP Group of Cleveland, plans to break ground on 365 high-end apartments on Buncher-owned riverfront land between 19th and 21st streets within the next 60 days.
McCaffery's Produce Terminal proposal also includes improvements along Smallman and 21st streets to make them more pedestrian and bicycle friendly, Acklin said. Such work, expected to cost another $7 million, wasn't included in previous proposals, he said. It could feature a plaza in front of St. Stanislaus Church on Smallman that Acklin compared to Market Square.
Tom Fontaine is a Tribune-Review staff writer. Reach him at 412-320-7847 or tfontaine@tribweb.com.
