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Pittsburgh does not have the money to subsidize its produce terminal, Mayor Bill Peduto said.
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Strip District terminal’s future remains unclear

Darrell Sapp/Post-Gazette

Strip District terminal’s future remains unclear

Seven months after selecting co-developers to convert the Strip District produce terminal into a marketplace and housing, the city of Pittsburgh is still trying to figure out how to make the plan work financially.

In an interview last week, Mayor Bill Peduto said the parties involved were focused on “how to make the numbers work” in trying to merge what had been two competing visions for the Strip landmark.

The city is counting on the housing to generate the money to make the project viable because the marketplace itself “does not have the revenue to be able to do it,” Mr. Peduto said.

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Although West Side Market in Cleveland is owned and operated by that city, Pittsburgh does not have the money to subsidize its produce terminal, the mayor said. The last thing he wants, he added, is to “cut a ribbon and then have wishful thinking that it will be there five years from now.”

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“We need to know that there is the continual revenue from the residential to make sure it can stand on its own,” he said.

The city’s Urban Redevelopment Authority board selected Chicago-based McCaffery Interests and Pittsburgh-based Rubino Partners in September to work together to craft their disparate visions into one master redevelopment.

McCaffery had proposed converting the 1,533-foot-long Smallman Street terminal into housing with some retail and office space. Rubino had advanced a plan to turn the warehouse, once a hub for produce wholesalers, into a giant marketplace anchored by vendors specializing in close-out merchandise.

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Kevin Acklin, Mr. Peduto’s chief of staff and URA board chairman, said Thursday that discussions between the parties are continuing. “Personally, I feel confident about the course of the discussions and we’re very hopeful in the near future that we will have an announcement,” he said.

But just where Rubino stands with the city at this point is unclear.

The city has had only limited contact with the developer since December. And it will be McCaffery, not Rubino, partnering with the URA and the city planning department to take part in a three-day design charette in Washington, D.C., this summer to discuss how the Pittsburgh terminal interacts with the five-block area surrounding it.

Asked whether Rubino was out of the picture, Mr. Peduto replied, “I’m not going to say anybody’s in or out. Regardless of how the process continues, there will be an opportunity to have a commercial use as a part of that as well. So at this point it’s really making it financially feasible before being able to pull together exactly what it will be in the sense of that commercial space.”

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Mr. Acklin declined to comment on Rubino, saying he wanted to respect the integrity of the confidential negotiations.

Neither Mike Rubino, who heads Rubino Partners, nor Dan McCaffery, CEO of McCaffery Interests, could be reached for comment.

In addition to trying to make the accounting work for the redevelopment itself, Mr. Peduto said there is a need for an infusion of money to update the terminal, make public improvements around it and “to be able to sustain the initial cost of creating this.”

The city, he said, is talking to local foundations and the state about possible financial help in those areas. On the state side, it is seeking a $7 million state redevelopment capital assistance grant for public infrastructure improvements related to the project.

Despite the challenges, Mr. Peduto said the city was “at the two-yard line” in terms of finalizing an agreement on the redevelopment and hopes to have it done this month.

But he added that the timetable is less important than getting it right.

“This property has been nearly vacant for almost 25 years and it’s been underutilized for longer than that. We’re not going to rush to a time line to get something done that doesn’t take into consideration what’s best for the building long-term first,” he said.

Mr. Peduto confirmed that one option under study is to put commercial uses on one side of the terminal and housing on the other side.

“There’s been a lot of different work that’s been done by architects in order to be able to look at how to utilize it in a very vibrant way. That’s one of them,” he said.

First Published: April 10, 2015, 6:40 p.m.
Updated: April 11, 2015, 3:39 a.m.

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Pittsburgh does not have the money to subsidize its produce terminal, Mayor Bill Peduto said.  (Darrell Sapp/Post-Gazette)
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