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Macy’s building might become mix of hotel, retail, upscale apartments

Tribune-Review
| Wednesday, February 25, 2015 11:27 p.m

The iconic Downtown Macy’s building might end up housing a 155-room hotel as part of a Philadelphia-based developer’s plans to revive the vacant upper floors of the property.

Core Realty Inc. is seeking $10 million in state funding to redevelop the 12-story Macy’s to include a hotel on floors five and six, 311 high-end apartments above that, and the bottom four floors remaining for retail, according to an application to the Redevelopment Assistance Capital Program.

Randy Mineo, a Pittsburgh native and Core Realty’s executive vice president, declined to comment, as did the broker representing the property, Randy McCombs, of Grant Street Associates.

A Macy’s spokesman declined to comment on the project, as well, although he said it continues to search for opportunities to use the space.

“As we have said all along, our objective is to make better use of empty/unproductive space on the upper floors of the Downtown store building,” Macy’s spokesman Jim Sluzewski said in an email Wednesday. “If/when we have a transaction to report, we will do so. Until that time, we will not comment.”

Kevin Acklin, who chairs Pittsburgh’s Urban Redevelopment Authority and serves as chief of staff to Mayor Bill Peduto, said he was not aware Core Realty had applied for the grant. He said the company has not approached the city or URA for help in developing a hotel.

The proposal arrives amid a hotel building boom in Pittsburgh, and months after developer 980 Liberty Partners led an unsuccessful attempt to put a hotel atop another iconic Downtown property — the August Wilson Center for African American Culture.

Matthew Shollar, a 980 partner, declined to comment on the Macy’s plan or say whether he was involved, but he acknowledged he is working on a “unique” Downtown project.

Shollar’s group wanted to build a 200-room luxury hotel and share space with the August Wilson Center, but withdrew amid the fierce objections of a coalition of foundations and top city and county officials. Shollar has expressed interest in redeveloping existing properties in the past, saying he is “interested in preservation, in adaptation.”

Acklin said the administration harbors no ill will toward Shollar despite the battles over the August Wilson Center, and that he has talked since then with Shollar about other possible projects in Pittsburgh. He said Macy’s was not part of any previous discussions.

“We invite Mr. Shollar or any other developer who’s interested in doing business with the city to come do business with the city,” Acklin said.

He said the administration hopes the vacant portion of Macy’s will be developed and that the department store chain remains committed to its Pittsburgh location.

“It’s a core building on Smithfield Street,” Acklin said. “We’d love to see retail and housing. All of those uses would be great for that (building).”

Macy’s has owned the building since 2005, part of its acquisition of the owner of the Kaufmann’s department store chain. Macy’s has scaled back the number of floors dedicated to retail even as it has searched for five years for a buyer for the Downtown landmark, leading to questions about what would ultimately happen there.

The Pittsburgh region has 55 projects, totaling 6,012 rooms, in its hotel construction pipeline, for a rate of planned rooms relative to existing rooms of 23.6 percent — the third highest in the country, according to Lodging Econometrics data compiled late last year for the Tribune-Review.

Chris Fleisher is a staff writer for Trib Total Media. He can be reached at 412-320-7854 or cfleisher@tribweb.com. Staff writers Natasha Lindstrom and Bob Bauder contributed.

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