The End Of The Beginning: Developer, URA Near Final Contract For Produce Terminal

Aug 16, 2017

It may not look like anything’s happening at the Produce Terminal in Pittsburgh’s Strip District neighborhood, but the building's developer expects to ink a final contract with the Urban Redevelopment Authority and begin renovation by the end of the year.

The Produce Terminal runs in an unbroken line for nearly five city blocks, from 16th to 21st streets. Built in the 1920s as a produce distribution center, the 160,000-square-foot building has been called iconic, a “crown jewel,” and its redevelopment “transformational.”

Pamela Austin uses the word “potential.”

Austin, a senior project manager for Chicago-based McCaffery Interests, unlocked a small back door and stepped into a section of the terminal cleared of the hodge-podge of cold rooms and improvised offices that various tenants constructed in the space over time. She looked up toward the building’s high ceilings with a kind of tenderness.

“It’s just a slab of concrete with a roof over it and very minimal utilities,” she said. “It was made to house fruit and to be hosed down and it’s going to take a big investment to make it for people.”

There are two tenants left in the five-block stretch of the Produce Terminal, but remnants of others abound: a sign for Premier Produce, a suggestion box , a door marked simply, “pizza.”
Credit Margaret J. Krauss / 90.5 WESA

Over four phases and at least two years, the development is expected to cost more than $60 million. 

Three pedestrian passageways will be built to connect Smallman Street to the riverfront. McCaffrey will put on a new roof, replace the building’s windows and run utilities up to a point, leaving occupants with options to design their own space. Austin said the company hopes to engage a mix of large anchor clients, smaller retailers, restaurants and office tenants, and she’s being hounded by locals interested in moving in.

“People definitely love the neighborhood...financers love [the project]," she said. "The building’s attractive to them, but we need to make it real.”

To sign a contract with the URA, which still owns the building, McCaffrey must show evidence of its financing. Financiers want to see a clear timeline for the city’s promised improvements to Smallman Street, said Austin, to make sure that project jives with the overall schedule of development.

“The city’s working very hard on that,” she added. “They’re aligned, we’re partners [and] they understand how important it is.”

A tax increment financing plan to pay for those improvements is still being analyzed and will require a second vote from all three taxing bodies: the city, Pittsburgh Public Schools and Allegheny County.

Kevin Acklin, the city’s chief development officer, said he’s confident the plan to use tax revenue generated by the development for infrastructure and other improvements will move forward.

McCaffrey and the URA are close to finalizing the disposition contract, a comprehensive agreement required by state law that will govern not only McCaffrey’s lease, but also its plan for construction, said Acklin.

“It’s a very complex development,” he said. “We could have done a shoddier development in a more expedient manner, but we wanted to get this right.”

The parties are working to fill some holes in the budget and resolve issues related to the historic status of the building and Smallman Street itself, said Acklin. The neighborhood is listed on the National Register of Historic Places. 

It’s been more than three years since negotiations began. The Produce Terminal has been one of the URA’s top development opportunities since acquiring the building in the 1980s.