Prime Downtown development spot gets a new owner

Sale of the former jail annex site finalized last week

A prime piece of Downtown real estate, vacant for more than a decade except for parking, has a new owner — and perhaps a new destiny.

Commonwealth Development Partners has purchased the property at 526 Fourth Ave., the site of the former Allegheny County jail annex, from longtime owner Ross Hospitality Associates LP, an affiliate of Kratsa Properties.

The sale was finalized last week. The purchase price was not available.

Commonwealth swooped in to grab the real estate — bordered by Ross Street and Third Avenue — after Parkway Corp., a Philadelphiabased parking operator and developer, bailed out last December after its rights to buy the tract expired.

Parkway Corp. ended its involvement after the Pittsburgh Zoning Board of Adjustment denied variances that would have allowed the firm to use the lot for parking for five to eight years while it came up with a development plan.

The new owner does not have a plan in place yet for the parcel. But the intention “is to develop the property at some point in the future,” said Jon Knudsen of the Hanna Langholz Wilson Ellis real estate firm, the broker in the transaction.

“Residential, hospitality and office uses are all being evaluated,” he said.

It could represent a prime opportunity for Commonwealth. The fenced-in lot is one of the few vacant sites still available for redevelopment Downtown, where more than a decade of building has left land scarce.

Yet despite a location near the corridors of power on Grant Street, the real estate over the years has been more of a magnet for cars than development.

Ross Hospitality paid $1.5 million to buy the property from the county in 2007.

At the time, it announced a plan for a six-story hotel with a 100-space underground parking garage.

But then the recession hit, and

the project never advanced.

From 2012 to the end of 2017, the county used the lot to park cars. That ended when it moved vehicles to the far east end of Fourth to a site that had housed the county garage before it was demolished.

Mr. Knudsen said Commonwealth would be “evaluating its future plans for the site on an ongoing basis.”

At one time, the lot housed the 274-cell jail annex, constructed in the former Jones Law Building at a cost of $11.8 million. It had opened in 1986 to ease crowding at the old county jail. The annex closed in 1995 and was razed in 2003.

Commonwealth Development Partners is no stranger to Downtown: It is in the process of converting the vacant 21story Commonwealth Building, located a few blocks away on Fourth, into a 140-unit apartment complex with first floor retail. That project should be completed in 10 months.

Designed by famed architect Frederick J. Osterling, the Commonwealth Building sat empty for two decades before Commonwealth purchased it from the E.V. Bishoff Co., a Columbus, Ohio, developer with a handful of properties in Pittsburgh, for $5.5 million.

The building is part of a section of Fourth between Market and Smithfield streets that once was known as “Pittsburgh’s Wall Street” because of the number of financial institutions, including the Pittsburgh Stock Exchange, that occupied the corridor. In fact, the building originally was known as the Commonwealth Trust Bank.

Beyond the Fourth Avenue lot and the Commonwealth Building, Commonwealth Development Partners is looking at other investments in the city, Mr. Knudsen said.