Big companies wanted

Lack of anchor tenants reveals a recruitment need

While there has been high demand for office space in and around Downtown, there are few companies big and brawny enough to be anchor tenants in a major project. That has caused a delay in the Pittsburgh Penguins’ development of the former Civic Arena site, and now, it has led Oxford Development Co. to abandon plans for a new skyscraper on Smithfield Street. The setbacks highlight a gap in the city’s business portfolio — big companies needing lots of elbow room.

The Penguins’ project in the Lower Hill District was dealt a blow when U.S. Steel backed out of plans to relocate its headquarters there and become an anchor tenant in the office component of the mixed-use complex.

Since 2012, Oxford Development had been planning to tear down the seven-story onetime home of the Frank & Seder department store at 441 Smithfield St. and replace it with a 33-story office tower. U.S. Steel unsuccessfully was courted to be the anchor tenant in this project, too. In the end, Oxford couldn’t find anyone for the high-profile role, so it has decided to sell the old building to a Cleveland company, Stark Enterprises, which may be planning to retool it for residential and office use.

New construction translates into high rents, and that is one reason cited for the lack of tenant interest in Oxford’s venture. However, it’s also a reminder that Pittsburgh, as much as it likes to celebrate startups and high-tech spinoffs, needs to work on recruiting big employers, too.