... what’s happening with the Strip District produce terminal
Dan McCaffery is CEO of Chicago-based McCaffery Interests, which recently completed a $62.6 million rehab of the Strip District’s historic produceterminal.
So far, three tenants have opened in the 1,533-foot-long building: a Fine Wine & Good Spirits Premium Collection store; OnPar Now, a locally owned golf instruction and practice facility; and City Grows,a Lawrenceville-based organicgarden and gift shop.
With the Pittsburgh PostGazette, Mr. McCaffery discussed the terminal project; a companion office redevelopment across the street at 1600 Smallman that will be home to autonomous vehicle company Aurora Innovation; and a development in the works on a 3.5-acre tract at 21st and Smallman that was to be the site for a new office complex before McCaffery purchased it from New Jersey-based RugbyRealty.
This interview has been edited for space and clarity.
How do you feel about having this development completed after seven years?
Honest to God, I don’t know ifI started it last week or seven years ago. You know what I mean? Because every day, progress is made. There is no way to do these things fast. So if it wasn’t seven years, it would have been three years. If it wasn’t three years, it would have been two and a half. If it wasn’t two and a half, itwould have been four.
The time aspect of it doesn’t wash with me. What washes with me is the completion, meaning tenants moved in, tenants making money, people discovering the tenants andeach of them having some success. That’s the day that I wouldcall a finish.
What has been the biggest challenge of this development?
That’s a good question. I don’t categorize them in any particular order. But a challenge — when we looked at [Smallman Street], the street was pretty awful. When you look at some of the neighboring buildings, they need a lot of work. So the challenge is saying to yourself, “OK, if we do this, will we be able to make it successful?” And I must say, I’m feeling more and more like it’s going to be very successful, not just successful.
The pandemic has really put the brakes on, but it hasn’t put the brakes on the interest level of tenants. The interest level is very high.
I just had a tenant over today, 10,000 square feet, and he said, ‘Dan, I’m so ready to go. ... I’m a little concerned about the pandemic.’ I may have said it to you before: I don’t want tenants taking a chance on their life savings until they’ re comfortable.
And it’s very much a local project. We haven’t done any national leasings. None. I made a commitment that we would use our best effort to try to make 40% of the project regional or local. So, hell, I’ll betcha we’re going to get close to 90%, if not 100%, because we’re just not marketing nationally at the moment orany moment.
And the interest level we have, were we able today to honestly look people in the eyeand say, “You can open in September when the pandemic is over,” and so on and so forth, we’d be full. How has the pandemic impacted this project?
It has slowed the opening of tenants, but that’s all. And we had a little bit of — you know, the governor shut down construction for a month. But we recovered from that quite easilytimewise. This is a historic building, a Pittsburgh landmark. What steps did you take in the construction to preserve the integrity of it?
Everything you see really, to make it as simple as possible. We didn’t tear anything down. Nothing. The biggest change is where there were doors, it is now glass. But all of the doors that were there, we’ve just put them in place above the glass, so they’re in there. So those doors are preserved, too.
So the steps we took were
just to bring it back. The other thing that’s big is we made this a walkable area. The little dock area wasn’t wide enough to have three or four people pass one another. So we extended the docks and, of course, for safety put in that railing. And then we have the stairs and so on and places to sit.
We promised we wouldn’t tear anything down, and we haven’t. The only thing ... we modified was [adding passageways through the building]. That’s it. Other than that,it’s what it was — but it’s gota new dress on it. What can we expect to see in terms of future tenants?
Well, I think within the next 90 days, another couple will open, and then there’s a few bigger ones that will take a little longer. But I would say come September, we should be up around 40% leased, maybe — something like that,50%, leased and open.
But again, I’m not making
an excuse when I say what I’m saying to you, is that even the people that are leased, we’re not releasing their names and that kind of stuff because they don’t want to open yet. They’re nervous. And they’re local people. You can’t tell them, “Hey, risk your $200,000, $300,000 or $400,000 investment or your bank loan and open now.” This[pandemic] ain’t over.
Only if they’re very comfortable opening. Obviously, the liquor store was comfortable opening. It’s probably an essential service [laughing]. The restaurant guys — easy to understand, they don’t want to start building out until they know the number of seats they’ve put in their mind and their business plan, that those seats can be occupied.I don’t blame them.
You did the Cork Factory apartments. You did this project and 1600 Smallman across the street. You have another development in the works. What attracts you to the Strip District?
What we’ve done has been successful. I suppose we’re building on our own success, I guess. We wouldn’t do a second one if the first one failed. Have you formulated any plans yet for the lot at Smallman and 21st streets?
We’ve done a couple of schemes. I’ll share with you thatwe are probably not going to build what is approved there. We think we can come up with a nicer plan, a plan that will be more long-term rewarding — not rewarding monetarily but rewarding for the community, prettier and all that kind of stuff. We believe that. It’s a matter of taste, Iguess, but we trust our taste.
We’ve done plans that show a townhome development. We’ve done plans that show a modest high-rise condo, high-rise apartments, built-to-suit office. We’re looking at the best combination in combination with what’saround it.