31st Street Studios has become coveted site for more than film
Building scheduled for public sale in U.S. Bankruptcy Court
There may be no happy ending for the 31st Street Studios in the Strip District. The movie production facility, the largest between Los Angeles and New York, tentatively is scheduled for a public sale in U.S. Bankruptcy Court in Pittsburgh on July 18 after several failed attempts to find a buyer.
And given its riverfront location in one of the region’s hottest real estate markets, there’s a chance the eventual buyer might not be seeing stars in its plans for the industrial building, a former steel mill, totaling more than 300,000 square feet spread over 9 acres.
With the growth of Uber, the arrival of Argo and the neighborhood’s growing reputation as a tech hub, the property likely will attract a lot of attention. And some of those interested will not be inclined to maintain it as a production facility.
“I think the interest in it will be much more as a commercial property than as a film studio, given everything that is happening around that location,” said Dan Adamski, managing director of the Jones Lang LaSalle real estate firm.
At a hearing last week, U.S. Bankruptcy Judge Carlota M. Bohm tentatively set the July 18 sale date pending a formal order to be submitted by the attorneys for Gateway Entertainment Studios LP, the parent company of 31st Street Studios.
Gateway filed for Chapter 11 bankruptcy protection last year.
If more than one qualified bid is received, an auction will be conducted at the public sale until a winner emerges. Each successive bid must be raised in increments of at least $50,000.
Ryan Cooney, Gateway’s attorney, said Gregg Broujos, managing director and founding principal at the Colliers International real estate firm, has been chosen as the broker for the sale of the property. The appointment becomes effective Friday.
Mr. Broujos declined comment, pending his formal appointment.
A minimum bid of $11.8 million has been established for the property by Gateway and a committee representing unsecured creditors. A sale could occur earlier than mid-July if Mr. Broujos is able to find a buyer agreeable to all of those involved.
Mr. Cooney said he has heard that potential buyers are considering a number of possibilities for the site, including maintaining it as a production facility or converting it to another use.
He added, “We’re open and willing to entertain all offers”
“I think the interest in it will be much more as a commercial property than as a film studio, given everything that is happening around that location.” — Dan Adamski, managing director of Jones Lang LaSalle
for the building, regardless of the proposed use.
While $11.8 million is the minimum acceptable offer, Mr. Cooney believes the property is worth more. He said there already have been inquiries from potential bidders.
Philadelphia developer Core Realty had reached a deal last fall to buy the property for $12 million, with plans to continue operating it as a production facility, before terminating the agreement.
And last fall, Brooklyn, N.Y.-based Midwood Investment & Development had offered $14 million before dropping its bid. After the Midwood decision, Kirk Burkley, attorney for unsecured creditors, pushed for the public sale.
“We were OK with a private sale so long as the private sale was guaranteed to have enough money to pay all creditors in full. All of those efforts the debtor engaged in fell through. We don’t want the debtor driving that process anymore. It’s time to get this over with,” Mr. Burkley said.
Already there is speculation within the real estate community about potential bidders.
One name mentioned is Core, which owns the former Macy’s/Kaufmann’s department store Downtown and recently purchased One Chatham Center in Uptown. Representatives could not be reached for comment Tuesday.
Another is San Francisco ride-hailing company Uber, which has been expanding its presence in the Strip, with locations near the 31st Street Studios property. Craig Ewer, an Uber spokesman, declined comment.
“Without a doubt, [the property] is going to garner a lot of attention. The Strip right now is ground zero for a lot of those companies and a very hot submarket,” Mr. Adamski said.
Others mentioned as possible bidders include the Buncher Co. and the Rubinoff Co.
“Just as a raw piece of property, you’re on the water in the middle of the Strip District, which is so popular these days. I would imagine that there are a number of different users who would want to take a look at it,” said Randy McCombs, executive vice president of Grant Street Associates.
One who is hoping that the property keeps its Hollywood bent is Dawn Keezer, director of the Pittsburgh Film Office.
“We want the film industry to be successful in southwestern Pennsylvania. The 31st Street Studios is an important part of that equation. I hope it will be available to serve the four television series filming in Pittsburgh this year,” she said.