Developer will pay $ 1.2M to upgrade North Shore parking
This is one North Shore buyout that involves parking, not athletes.
Continental Real Estate Companies will pay $ 1.2 million to buy out 134 parking spaces on the North Shore to build, umm, more parking — a 445- space garage, to be exact.
The payment to Alco Parking, approved by Pittsburgh Stadium Authority board members Monday, breaks down to $ 8,957 a space. Continental is building the six- story garage, to be situated on land behind the Hyatt Place hotel as the first installment of a broader development that eventually is to include a new office and residential tower, a project that has been waylaid by COVID- 19.
The buyout for the parking spaces dates back to the construction of Three Rivers Stadium, which opened in 1970 and was demolished in 2001 to make way for
Heinz Field and PNC Park, said Mary Conturo, stadium authority executive director.
At the time, Alco was awarded a lease that still governs much of the parking on the North Shore, she noted. The company secured the lease as part of a deal to guarantee the bonds needed to build the old stadium, Alco President Merrill Stabile said.
To compensate for the lost 134 spaces, Alco will be paid half of the $ 1.2 million upfront and the rest over several years. The firm also manages most of the North Shore lots and the two existing parking garages.
“We knew we had this expense,” Ms. Conturo explained. “We couldn’t afford to develop the property if we couldn’t cover this buyout.”
The $ 1.2 million payment was calculated based on a formula that estimates the per- space cost with the help of the consumer price index, Mr. Stabile said. That formula was established in a 2004 agreement that set the price for each space at $ 6,603 with annual consumer price index adjustments.
In the months ahead, Continental also will have to buy out Alco for 147 spaces that will be taken for the proposed eight- story condominium and office building and 60 spaces to be removed for a proposed entertainment plaza.
The stadium authority is involved because it is technically the owner of the land even though Alco controls the leases for the parking.
In the past, Columbusbased Continental, hired by the Steelers and the Pirates to develop the land between the two sports venues, has paid for land on the North Shore based largely on real estate appraisals — and not always without controversy.
From that standpoint, the $ 1.2 million it is paying for the 39,919 square feet needed for the garage works out to about $ 30 a square foot.
Although appraisals weren’t used to assess the value of the land, the $ 30- a-squarefoot equivalent is an “appropriate number,” said Tobiah Bilski, director of research for the Jones Lang LaSalle real estate firm. The amount, he added, is in the middle of the comparable range for the limited number of land sales that have taken place on the
NorthShore.
Continental paid $ 47.70 a square foot for the Allegheny riverfront land it needed to develop the sevenstory office building anchored by the German software firm SAP.
The $ 30 is about double the $ 15.47 a square foot the same developer paid for the land used for the North Shore Place I and II office complex, home to the Pittsburgh Post- Gazette, seven years ago.
It’s more than triple the $ 8 a square foot it paid in 2008 for the real estate needed for Stage AE — a sale Mayor Bill Peduto, then a city councilman, criticized as a sweetheart deal.
Continental expects to start construction of the $ 11.5 million garage, which parallels West General Robinson Street, in November and have it completed by next September. It will be the first one on the North Shore to be privately built and financed. The other two between PNC Park and Heinz Field — Gold 1 and West General Robinson Street — were constructed and funded by the stadium authority.
The new garage will include spaces for food trucks along the West General Robinson Street side. Continental also will build a pedestrian passageway between the garage and North Shore Drive as part of the project.
Continental turned to work on the parking garage after the pandemic disrupted its timetable for the office and condo development. The developer originally planned to start that last summer. But COVID- 19
“significantly impacted” its ability to secure leases for the office space, to sell units and to get financing, Ms. Conturo said in August.
As a result, the stadium authority board approved a revised schedule at the time that pushed back the start of that project until May 31, 2021, while pushing up the start of construction on the parking garage.
“We’re glad to have development progressing despite all of the challenges this year,” Ms. Conturo said.
In addition, Continental has until Dec. 31, 2021, to begin work on “Pirates Plaza,” an entertainment venue to be built across from the Home Plate entrance to PNC Park that may include a restaurant and a possible tribute to the baseball team’s Hall of Famers.
The new mixed- use building would feature 48 condos and four floors of office and retail. It would be built at the intersection of North Shore Drive and Mazeroski Way next to the ballpark.
“Despite the challenges of 2020, we are thrilled to be starting this next phase on the North Shore,” said Barry Ford, Continental’s president of development in Pittsburgh. “The garage will open the lot next to PNC Park for development, further solidifying the North Shore as the region’s premiere destination.”
Although delays have not been unusual, development between the two sports venues now includes four office complexes, bars and restaurants, Stage AE and the Hyatt Place.