The state Department of Environmental Protection is kicking in $1 million toward the redevelopment of the former Nabisco plant in East Liberty.

The grant to the Regional Industrial Development Corporation of Southwestern Pennsylvania will be used to clean up the site, which the city declared blighted in December, clearing the way for the Urban Redevelopment Authority to pursue $13 million to $14 million in aid for what has come to be known as the Bakery Square project.

The $105 million to $125 million project, spearheaded by Shadyside-based Walnut Street Capital Partners, will transform the former bakery and surrounding land -- a total of 6.5 acres -- into a mixed-use complex that will include 223,000 square feet of office space, 165,000 square feet of retail space, and a 120-room hotel.

RIDC president Robert C. Stephenson said that the cleanup work on the property would remove asbestos, PCBs and lead-based paint and should begin within the next 30 days.

Walnut Capital principal Anthony Dolan said the company is seeking tenants for the retail and office portions of the development as its continues to finalize the purchase of the property from RIDC, which is expected to close this summer.

The site was home to a Nabisco bakery for 80 years before it closed in 1998. The RIDC took control of the building in 1999 as part of a complicated community-led arrangement to buy the facility from Nabisco and restart it as Atlantic Baking Group, which had the financial backing of investment funds associated with international financier George Soros.

The company grew to seven plants and 1,300 employees, changing its name along the way to Bake-Line. But citing lower-than-anticipated production volume, low prices and higher ingredient costs, the company filed for bankruptcy in January 2004, abruptly closing all seven plants. The building has remained vacant since then.

The Bakery Square grant is the latest example of a sustained push by Gov. Ed Rendell for the redevelopment of "brownfields," former manufacturing sites that require significant cleanup to be made suitable for other uses. Since its launch in 2004, the DEP's Brownfield Action Team has helped redevelop more than 4,500 acres of brownfields included in 32 projects in 22 counties.

East Liberty development plan
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First Published: February 10, 2007, 5:00 a.m.