April 13–A luxury lifestyle hotel could end up on top of the 600-space parking garage being built at the site of the former Saks Fifth Avenue department store on Smithfield Street, Downtown.
The 161-room hotel is a new wrinkle in the second phase of a development being proposed by Smithfield Oliver Partners, a partnership between Washington County-based Millcraft Investments and Downtown's McKnight Realty Partners.
As originally planned, Smithfield Oliver had envisioned up to 100 residential units in a second phase to complement the garage and 30,000 square feet of street level retail space.
Under the latest proposal, the development team intends to build 62 market rate apartments in addition to the hotel. The residential units will range in size from 430-square-foot micros to 885-square-foot two bedrooms.
Pittsburgh Urban Redevelopment Authority board members are expected to vote Thursday on whether to accept the proposal and to enter into a contract with Smithfield Oliver Phase 2 Partners to sell the air rights above the garage for $2.2 million.
Lucas Piatt, Millcraft president and chief operating officer, said adding the hotel "improved the financial projections [for the project], took advantage of Fifth Avenue as a main entrance, creates more building amenities, more jobs and more economic impact for the region and the Smithfield Street district."
Mayor Bill Peduto had demanded that Smithfield Oliver build residential units above the parking in exchange for a $7 million loan needed to finance the garage and the infrastructure required to support what would be built above it.
The development team acquired the Saks site on Smithfield and a former Wendy's restaurant and vacant lot from the URA for $2.2 million. The URA had spent $4 million to obtain the Saks store after it closed in 2012 and additional dollars for the other parcels.
Besides the garage, the $35.5 million first phase includes retail space at ground level. Fogo de Chao, a Brazilian steakhouse, has signed a lease to occupy about a third of the 30,000 square feet.
The hotel would be the third new one in the Smithfield corridor. A 225-unit Embassy Suites recently opened in the Henry W. Oliver Building and a 155-room hotel is planned in the former Macy's department store near the Saks site.
Also Thursday, the URA board will vote on whether to accept a redevelopment proposal from Portland, Ore.-based Schoolhouse Electric & Supply Co. to convert the four-story former City of Pittsburgh detective building into a base for its East Coast operations.
The renovations will include a basement distribution center, ground-floor retail and coffee shop, and upper floor creative office space as well as a design library. Schoolhouse is expected to pay $250,000 for the property. A portion of the real estate will be retained by the URA.
Mark Belko: mbelko@post-gazette.com or 412-263-1262.
