The same group that offered the high bid for the August Wilson Center for African American Culture has finalized a deal to build a hotel on two floors of the former Macy’s department store Downtown.
An affiliate of Reception Hotels and Resorts paid $8 million to buy the fifth and sixth floors and parts of the first floor of the Pittsburgh landmark from Philadelphia developer Core Realty.
Matthew Shollar, a representative for Reception, said a “significant portion” of the purchase price involved pre-construction costs it is sharing with Core in the conversion of the former Kaufmann’s flagship store, a project that also will include putting 311 apartments and two floors of retail into the building used to sell merchandise to Pittsburghers for more than a century.
The hotel deal represents a key step in the efforts to redevelop the building at Fifth Avenue and Smithfield Street following the closing of the Macy’s — the last department store Downtown — in September.
Mr. Shollar said construction of the hotel should start this summer.
“We’re certainly happy to have done this. It is a big step in the project going to fruition. We’re looking forward to making a brand announcement and rolling things out in short order,” he said.
Reception is planning a 155-room, full-service hotel “with upscale and unique food and beverage offerings and an expanded amenity set,” he said. While Mr. Shollar declined to identify the brand, it is expected to be an Even Hotel developed by the InterContinental Hotels Group.
The Even brand is geared toward the fitness conscious crowd. It offers an “athletic studio” in the hotel with “three workout zones and best-in-class equipment,” according to its website.
There are Even Hotels in New York, Connecticut and Maryland, but none in Pennsylvania.
An affiliate of Core purchased the 13-story Macy’s building in July for $15 million. The developer had intended to keep Macy’s on floors 1-4 before the Cincinnati-based chain decided instead to close the store.
Randy Mineo, Core executive vice president, said selling the fifth and sixth floors to Reception made sense from a real estate standpoint. “Hotels generally like to own their own real estate as a rule of thumb,” he said.
The developer began reaching out to retailers “in earnest” earlier this month to fill the first two floors of the building. It is considering soft and hard goods retailers as well as restaurants and entertainment, including a bowling alley, for the space, a couple hundred square feet in all.
“We’ve got some really good interest and we’re just going down each of those roads,” Mr. Mineo said.
Core also is planning to recruit a restaurant to occupy part of the roof, which will house amenities like a swimming pool and running track for the building’s apartment dwellers.
Reception Hotels is made up of the same principals who reached an agreement last year to buy the August Wilson Center on Liberty Avenue for $9.5 million with plans to build a 200-room luxury hotel on top of it. But the group ended up withdrawing the offer in the face of opposition from Mayor Bill Peduto and Allegheny County Executive Rich Fitzgerald, clearing the way for three local foundations to purchase the property for $7.9 million.
Now the group has a chance to redevelop another Downtown landmark, turning what were floors for women’s clothing, furniture and even books over the years into rest stops for travelers.
“We’re very happy to be doing a project Downtown. We’re very happy with the support we got from the city, and we’re looking forward to rolling out a very innovative new project into the market here,” Mr. Shollar said.
Mark Belko: mbelko@post-gazette.com or 412-263-1262.
First Published: December 2, 2015, 5:00 a.m.
Updated: December 2, 2015, 5:18 a.m.
