PITTSBURGH | Development Rundown II

[glowrock]

Originally Posted by AaronPGH

Or maybe the case is that Forest City is so busy working on big-ticket multi-billion dollar projects like Atlantic Yards in Brooklyn, that they've continued to sit on Station Square and do nothing with it even though the market is healthy enough to support a residential project there. Why do you think they're putting it up for sale? They see value in the land.

Stop making so much sense, Aaron. It makes it so difficult for daviderik to refute your points with Ayn Randian talking points!

Aaron (Glowrock)

[markson33]

I think that both sides of the argument are correct. Forest City probably is not interested in investing more in Pittsburgh because they can achieve greater returns elsewhere. To that extent a new, more agressive, developer might be more willing to ante up where Forest City will not.

That being said, I think daviderik is correct in that, if the market was truly to that point we would see more development. How many new highrise residential projects are being built in Pittsburgh. None. Simply put the market isn't there yet. The Cork Factory is effectively getting $24 per square foot for their space. Highrise development needs to get closer to $30. For most projects the numbers don't work yet.

I'm not convinced that the higher rental rates couldn't be achieved, but then its not my money to risk. I would love to see an aggressive, risk taking developer buy out Forest City and do what Forest City is unwilling to do. I'm not holding my breath though.

[glowrock]

Originally Posted by markson33

I think that both sides of the argument are correct. Forest City probably is not interested in investing more in Pittsburgh because they can achieve greater returns elsewhere. To that extent a new, more agressive, developer might be more willing to ante up where Forest City will not.

That being said, I think daviderik is correct in that, if the market was truly to that point we would see more development. How many new highrise residential projects are being built in Pittsburgh. None. Simply put the market isn't there yet. The Cork Factory is effectively getting $24 per square foot for their space. Highrise development needs to get closer to $30. For most projects the numbers don't work yet.

I'm not convinced that the higher rental rates couldn't be achieved, but then its not my money to risk. I would love to see an aggressive, risk taking developer buy out Forest City and do what Forest City is unwilling to do. I'm not holding my breath though.

I'm not necessarily referring to highrise residential, markson33. Station Square, while I believe that highrise residential would be justified there, would be just fine with midrise or even the standard 4-5 story residential projects that are so common nowadays in many cities. As far as residential costs are concerned, what are those costs, exactly? $30/sf? Are you referring to yearly rental cost? That would be about $30k/year for a 1000sf unit, or about $2500/month. That seems atrocious for anywhere not in NYC, Boston, SF, or parts of Los Angeles...

First of all, I do believe Forest City is more concerned with a few of their megaprojects in several cities. Secondly, I also believe they're still miffed over the whole casino thing. But most importantly, I think a sale of Station Square to a more aggressive development company would be an excellent thing indeed. While of course I'm not saying that Pittsburgh's necessarily ready for a ton of high-end residential highrises, I do believe there's a huge unmet demand for modern apartments and condos in the $200-250k/sf range for purchase and/or the $1.50-$1.75/sf per month rental rate. So $200-250k for buying a 1000sf condo or perhape $1500-1750/month for a rental apartment. Especially with the incredible river/downtown views from Station Square, I definitely feel those are very reasonable prices. I simply cannot fathom a developer not being able to make a good return on investment at those types of prices.

Honestly, I simply feel that many developers (and banks, most importantly the banks!) still have opinions of Pittsburgh shaped from 1960, not 2012...

Aaron (Glowrock)

[BrianTH]

Out of curiousity, why would you need a much higher return per sqft on a highrise project than, say, something like Lot 24 or the Oakland Portal apartments? I wouldn't think the construction costs would work that way, but maybe I am missing something.

[daviderik]

Originally Posted by AaronPGH

Or maybe the case is that Forest City is so busy working on big-ticket multi-billion dollar projects like Atlantic Yards in Brooklyn, that they've continued to sit on Station Square and do nothing with it even though the market is healthy enough to support a residential project there. Why do you think they're putting it up for sale? They see value in the land.

What exactly is your point here? Forest city wants to build in New York and not Pittsburgh? Umm Wait that would prove my point...Okay How about they are doiing nothing with the Land? No My point again. Oh wait, here it is..Forrest City is selling the land! haha. Are you kidding me? I guess when you have it both ways the facts will always support your point of view.

[Private Dick]

Building a minor league soccer field on that site is puzzling... especially when we consider that there is a recently-renovated, beautiful stadium a few blocks down the street. Constructing a stadium there effectively limits actual development of the area in the future. -- pretty much guaranteeing that those huge adjacent riverfront parking lost remain just that for as long as the Riverhounds play there. Very strange "development" all around.

[AaronPGH]

Originally Posted by daviderik

What exactly is your point here? Forest city wants to build in New York and not Pittsburgh? Umm Wait that would prove my point...Okay How about they are doiing nothing with the Land? No My point again. Oh wait, here it is..Forrest City is selling the land! haha. Are you kidding me? I guess when you have it both ways the facts will always support your point of view.

Forest City does mega projects. Station Square is not a mega project. Even though a residential development at Station Square is small potatoes for them, it would be a huge project for someone local like Millcraft or Walnut Capital. And if Forest City has decided that now is the right time to sell the land to another developer – why would that be? It could be that they realize the market is strong enough to make SS an appealing buy to someone else, where it may not have been before.

It's not that hard to understand, and there's no reason to give me attitude like you just did in that post.

[acenturi]

Originally Posted by AaronPGH

Forest City does mega projects. Station Square is not a mega project.......... .

Take a look at their properties in Philly here: http://www.forestcity.net/Search/Pag...k=philadelphia

I can affirm that Quartermaster Plaza is far from Huge. Of the other properties, other than the Penn one, all are highrise gutted and recycled apartment buildings, except Museum Towers. An interesting concept they seem to use is to provide significant discounts to graduate students and university employees at their One Franklin Town property - which is usually close to 100% occupied. Also, if you cliick on the web sites of some of those apartment complexes (e.g., 1 FranklinTown), it's interesting to note how the rents are well within the Pittsburgh range. But, on your point about large cities, I don't believe they have any residential, or other significant properties in their own headquarters city - Cleveland.

[MMorales2]

I have seen a lot of construction going on in the South Side Works. Does anyone have updates as to what is going on there? What are they building?

[BrianTH]

To state what I would have thought would be obvious, one particular developer does not represent "the market". So assuming Forest City isn't interested in doing a project at Station Square, that doesn't mean "the market" isn't interested in doing a project at Station Square.

Indeed, the whole justification for "free markets" is that they are a mechanism for getting economic resources to those entities who value them the most. If that isn't Forest City in this case, then fine, let them pass Station Square along to some other entity that values the opportunity more.

[psuhoops123]

Originally Posted by MMorales2

I have seen a lot of construction going on in the South Side Works. Does anyone have updates as to what is going on there? What are they building?

Just an Aldi acrossed from American Eagle and new Hotel across from the Wine Loft... looks pretty nice so far!

[Buzz Pittsburgh]

Originally Posted by psuhoops123

Just an Aldi acrossed from American Eagle and new Hotel across from the Wine Loft... looks pretty nice so far!

I'm gonna be there tomorrow for dinner with friends, I'll try to remember my camera and take some pictures.

I can't say enough about the clouded perception that many outsiders hold of Pittsburgh. I meet many people who say Pittsburgh surprised them with its beauty, its charm, and its availability of quality entertainment and services. I'm not surprised some developers and banks might feel the same way not being here to see what Pittsburgh has become.

Maybe a local developer would be the right step forward for Station Square. Let's just hope it's not Buncher

[PGHFan]

And the "market" could find a new owner for Station Square who would decide to just let it go to seed on the belief that the land is more valuable that whats on it. Not likely but you know that silly market. On the other hand, a local developer like Millcraft might be a step in the right direction. They seem to do well with their projects.

[BrianTH]

Owners land-bank all the time, for various reasons. The simplest is just that they anticipate the use-value will increase fast enough over the medium-term such that the opportunity costs outweigh the benefits of doing a project in the short-term.

[markson33]

I wouldn't get your hopes up on Millcraft. They only do projects if they can get some government money, and I don't see the city/county/state ponying up for station square.

Walnut Capital is the developer who would have the vision for it, but with Bakery Square 2 on the drawing boards their plate is probably full.

[Austinlee]

Originally Posted by psuhoops123

Just an Aldi acrossed from American Eagle and new Hotel across from the Wine Loft... looks pretty nice so far!

The construction between the road seems to be the opening up of a covered railroad which was a suprise when i was there recently.

EDIT: Here's what's going on, fascinating story actually. $15-$25 million tunnel project.

Projects to prepare tracks for taller trains

Pittsburgh Post-Gazette
By Jon Schmitz

Early next year, CSX will begin to tear up Tunnel Park at the SouthSide Works to raise the roof in the railroad tunnel that lies underneath. The Panama Canal is nearly 2,200 miles from Pittsburgh, but ripples from a $5.25 billion canal expansion will be felt here starting next year.

That's when construction crews are expected to excavate the grassy strip in SouthSide Works known as Tunnel Park. There's a railroad tunnel down there, and CSX Transportation wants to raise the roof on it.

The tunnel is one of 61 places on CSX's extensive mid-Atlantic freight system that lack enough clearance to allow taller "double-stack" trains to pass. The railroad, the federal government and six states have entered a partnership called the National Gateway that calls for spending $842 million to open the system to the taller trains.

http://www.nationalgateway.org/news-...-taller-trains

[glowrock]

Originally Posted by Austinlee

The construction between the road seems to be the opening up of a covered railroad which was a suprise when i was there recently.

This is correct. The railroad is raising the ceiling on the tunnel so that the double-deck railcars can pass safely. Once the ceiling is raised up, I presume that they will re-landscape the area into a park.

In addition, there is at least one new office building nearing construction adjacent to the Springhill Suites hotel on the east side of Hot Metal St.. Also, the continuing redevelopment of the former Goodwill regional headquarters across Carson St. and adjacent to the Aldi under construction into apartments.

So yeah, there's a pretty good amount of construction in and around Southside Works right now.

Aaron (Glowrock)

[hyperion1110]

Originally Posted by Austinlee

The construction between the road seems to be the opening up of a covered railroad which was a suprise when i was there recently.

EDIT: Here's what's going on, fascinating story actually. $15-$25 million tunnel project.



http://www.nationalgateway.org/news-...-taller-trains

I was a bit surprised myself when I saw the underground railroad project at SSW. What's particularly interesting is that this is part of a much larger initiative between the government and the railroads to upgrade the railroad infrastructure, especially in the Midwest and East.

Check it out: http://www.post-gazette.com/stories/...ns-256609/?p=0

Projects to prepare tracks for taller trains
By Jon Schmitz / Pittsburgh Post-Gazette

The Panama Canal is nearly 2,200 miles from Pittsburgh, but ripples from a $5.25 billion canal expansion will be felt here starting next year.

That's when construction crews are expected to excavate the grassy strip in SouthSide Works known as Tunnel Park. There's a railroad tunnel down there, and CSX Transportation wants to raise the roof on it.

The tunnel is one of 61 places on CSX's extensive mid-Atlantic freight system that lack enough clearance to allow taller "double-stack" trains to pass. The railroad, the federal government and six states have entered a partnership called the National Gateway that calls for spending $842 million to open the system to the taller trains.

The railroad and governments say the project will bring myriad benefits: more efficient freight movement that cuts consumer costs; less pollution; construction and freight industry jobs; and fewer trucks on congested highways.

A fully loaded double-stack train can carry the equivalent of 280 truckloads of freight, said Randy Cheetham, a CSX regional vice president.

They hope to finish the work by 2015, when bigger ships that will be able to use the expanded Panama Canal will start plying East Coast ports, including Philadelphia, generating more demand for trains to move goods in the East and Midwest.

At the SouthSide Works, a $15 million to $25 million project calls for removing the grassy median between South Water Street and Tunnel Boulevard, taking the roof off the railroad tunnel and installing a new one that is 18 to 30 inches higher.

The park will be restored and look about the same as now, except for leveling of a sunken area near Hot Metal Street, said Megan Stearman, spokeswoman for the city Urban Redevelopment Authority, which has been working with the railroad to minimize the project impact.

CSX officials said the construction, expected to start early in 2011 and last a year, will cause some disruption to traffic, pedestrians and bicyclists. A temporary detour of the bike trail that passes through the corridor is possible, but the trail will not be closed.
The project area stretches from 26th Street to Hot Metal Street.

It is one of six projects CSX is planning in Allegheny County to open its lines to taller trains. The others figure to be less disruptive.

The tracks that pass beneath the Smithfield Street Bridge near Station Square will be lowered about one foot, to provide a 21-foot clearance. The $3 million project will require digging up the foundation of the track bed and construction of a temporary track to keep trains moving during the work.

The work will be contained in the railroad right of way and will not affect vehicle traffic or pedestrians, CSX officials said. It likely will begin in spring and take five to six months.
CSX later this year will remove an unused overhead walkway at Chestnut Street and Third Avenue in Coraopolis. Railroad officials said the borough did not want the structure saved.

In McKees Rocks, tracks will be lowered where the CSX line passes beneath an Ohio Central Railroad bridge, south of the McKees Rocks Bridge and east of Island Avenue. No impact is expected on nearby properties or roads.

Trusses on a railroad bridge over Chartiers Creek in Pittsburgh's Esplen neighborhood will be modified to create sufficient clearance. Tracks passing below the Boston Bridge in Versailles will be lowered 6 to 8 inches. Neither project will affect the surrounding areas, officials said.

The Obama administration this year awarded $98 million in economic stimulus funds to four states for National Gateway work, including $35 million to Pennsylvania. The state will provide $35 million in matching funds.

CSX and its affiliates have committed $395 million to the $842 million initiative, and the railroad is planning to build a $50 million cargo terminal in the Pittsburgh area. CSX is looking at sites in Allegheny and Beaver counties and hopes to pick one next year, with a construction start in 2012 or 2013, Mr. Cheetham said.

Transportation advocates have touted public-private partnerships as a way to finance badly needed infrastructure improvements at a time of scarce government resources.
"We certainly see [National Gateway] as a model" for such partnerships, Mr. Cheetham said. "We hope the public realizes the benefit of investments of this type."

[Austinlee]

Originally Posted by Buzz Pittsburgh

I'm gonna be there tomorrow for dinner with friends, I'll try to remember my camera and take some pictures.

Try to get us a few pics of the tunnel construction project; And you could get a couple pics of this new Hyatt. The structure is up; Also you you could try to get a couple pics of the Goodwill building rehab?

[BrianTH]

So does anyone know what is planned for the strip of land just west of the south end of the Fort Pitt Bridge, between the ramps and the trail/RR/river? It looks like they are creating some sort of lot, and they are currently pouring the bases for what could be light or electricity poles.