May Department Stores Co. has not been dawdling since it announced last summer that 32 of its Lord & Taylor department stores had to go. Ten stores are now gone or ready to close by February, and almost 850 jobs have been trimmed.

Joyce Mendelsohn, Post-Gazette May's deal in Pittsburgh requires the Lord & Taylor store to be open for five years from its Nov. 1, 2000, opening. But if a new tenant for the store can be found before Nov. 1, 2005, May could cut its losses and move on, or it could choose to close the store anyway and pay off an $11.8 million loan from the Urban Redevelopment Authority. Click photo for larger image.

Pittsburgh's own Lord & Taylor, Downtown, has not taped up Going-Out-Of-Business sale signs yet, but few doubt that the department store company is in a hurry to move on, no matter the contractual entanglements that could include a multimillion-dollar early exit fee.

"If they were contemplating closing, I would imagine now would be the time to do it," said Herky Pollock, a retail broker at CB Richard Ellis/Pittsburgh.

This is the time of year when retailers' thoughts turn to clearing out leftover holiday inventory and to shutting stores unable to do well even during the busiest sales season. That was aptly demonstrated by Lazarus-Macy's announcement Friday of its plan to close the company's Downtown store by spring, as well as four others elsewhere in the country.

While the Lord & Taylor closings kicked off last summer, activity has stepped up in recent weeks. On Jan. 16, a Houston site closed. The schedule now calls for a Jan. 25 closing in Dallas; followed by closings Jan. 31 in Miami; Feb. 6 in Louisville, Ky.; Feb. 8 in Atlanta; and finally Feb. 22 in Boca Raton, Fla.

"I think there are a lot of people working on this," said May spokeswoman Sharon Bateman. "We are actively working to divest these locations."

May has said it will fulfill its obligations for each site, even if the process takes up to three years. Getting out is easier in some cases than in others.

In Hartford, Conn., the retailer is moving one of its Filene's department stores into the Lord & Taylor space. Mall owners in Atlanta and Boca Raton, Fla., willingly bought back their sites and have since announced deals with prized tenants Nordstrom and Nieman Marcus.

May's complicated deal in Pittsburgh officially requires the store to stay open for five years from the Nov. 1, 2000, opening date. But if a new user can be found before Nov. 1, 2005, May could cut its losses and move on, or it could choose to close the store anyway and pay off an $11.8 million city Urban Redevelopment Authority loan used to help finance its construction.

The extensively renovated granite and marble structure that once served as Mellon Bank's headquarters has attracted attention, said Mariann K. Geyer, executive director of the Pittsburgh Downtown Partnership. She said the partnership had received queries from private concerns who say they have clients who may be interested.

There's also been speculation that the URA might want the building, although that could be a difficult deal to do in the city's current financial crisis. "Personally, I'd like to see it returned to the private market," said city Councilman William Peduto.

What tenants would do well in the 135,000-square-foot building, and the soon-to-be-available 250,000-square-foot Lazarus-Macy's is still a matter of speculation.

Geyer is in the camp that sees a potential move for the nearby 86,000-square-foot Saks Fifth Avenue store. In the past, Saks officials have made no secret of their interest in expansion. "They're in a building that they've pretty much done all they can do with," said Geyer.

A Saks spokeswoman this week declined to discuss the company's plans. "We're considering all of our options in Downtown Pittsburgh," she said.

Saks draws customers Downtown because it has no other stores in the market and it offers different merchandise than that available elsewhere, said Pollock at CB Richard Ellis. The fact that two midlevel department stores failed to draw customers by carrying the same goods found in suburban malls shouldn't be considered proof that retail won't work Downtown, he said.

Pollock sees potential for discounters such as Target or Wal-Mart, which could draw customers from nearby residential areas. He estimated that either one could probably rack up $40 million to $50 million in annual sales, more than twice the sales that short-tenured Lazarus-Macy's pulled in during its best year. "It may not be the sexiest use in the world, but it may be successful," said Pollock.

Parking costs, of course, are likely to be an issue for any retailer, especially in light of the city's recent move to increase parking taxes.

An already soft Downtown office market makes the idea of turning either building into office space unappealing, Pollock said. But someone might try putting retail on the first level and then adding residential space farther up.

Developer Eve Picker sees the Lord & Taylor building regularly as she works in and around her Liberty Avenue offices. "It's an amazing location," said Picker, president of no wall productions, which develops lofts in old and historic buildings. "I can't believe someone wouldn't want it."

Suggestions for turning the historic Mellon bank building into such attractions as museums or theaters don't seem practical to her. Such things are expensive to do and hard to make profitable.

Instead, Picker speculated it might take a variety of uses to fill the Lord & Taylor space -- perhaps a great fitness center on one floor, an amazing restaurant on another. "Someone with guts needs to do it," she said.

No one has accused Continental Real Estate Cos. of lacking guts. The Columbus, Ohio, developer has turned a former steel plant site into the Waterfront shopping center in Homestead and bought the struggling Galleria mall in Mt. Lebanon, which is now drawing shoppers with stores such as Anthropologie and Pottery Barn Kids.

But Continental Chairman Frank Kass said he was not looking at projects in the city center. "We've got our hands full with the North Shore."

While the developer is recruiting retailers for the land between the two stadiums, Kass said he was being careful to focus mainly on entertainment users so as not to lure away chains looking at city center. "I don't want to be the reason it didn't happen."