RIDC lands tenant after buying Fairywood site
Only two months after sealing a deal with the city to remake a vacant former public housing site in Fairywood, the Regional Industrial Development Corporation has landed its first tenant.
Ferguson Enterprises, a national plumbing, HVAC and industrial distributor, has signed a 10year lease to take all 150,000 square feet of space in a warehouse that has yet to be built.
The signing represents the first fruits of a new partnership between RIDC and the Pittsburgh Urban Redevelopment Authority to redevelop the 25-acre tract that has resisted previous advances by developers.
In April, the RIDC purchased the property from the URA for $1,
with a plan to erect two 150,000square-foot flex-use buildings at the site targeting distribution uses.
Ferguson, which is based in Newport News, Va., already has a presence in the Pittsburgh market. Don Smith, RIDC president, believes the Fairywood signing marks an expansion for the company.
“We’ve been talking with them for a while trying to work out a deal. Finally all of the details came together. We couldn’t be happier to get a great tenant like Ferguson to kick off the Fairywood development,” he said.
In a statement, George Schraudt, Ferguson’s senior facility development manager, said the company has been eyeing the Fairywood neighborhood for several years because of its “superior centralized location in the
Pittsburgh market.”
“RIDC and URA have been tremendous partners to help facilitate our vision. Our new modern distribution facility will serve as the area’s main branch and shipping hub, allowing us to better serve our customers in the local market and create more opportunities for our Pittsburgh associates,” he said.
Ferguson expects to employ 50 people at the warehouse when it opens, with plans to possibly double that by the fifth year of operation.
“I look forward to welcoming Ferguson as the first tenant of this transformative development,” Mayor Ed Gainey said in a statement. “I applaud the efforts of both RIDC and the URA for their work in ensuring that the Fairywood site
becomes a generator for economic activity and job creation.”
The Fairywood tract adjacent to the Chartiers Valley Industrial Park was once home to the Broadhead Manor public housing complex. The site has been vacant for more than 15 years after being damaged by a hurricane.
RIDC hopes to start construction on the first building in November, with completion expected in late 2023. Ferguson’s lease will start once the building is finished.
Work on the second 150,000-square-foot building will start once the first one has been completed.
As part of the RIDC’s arrangement with the URA, the authority will have an equity stake in the project. Mr. Smith has estimated construction costs at more than $20 million.
RIDC is putting $2.7 million to $3.5 million in capital into the building, while the URA is contributing the land and pursuing public grants to help offset costs.
While other developers failed to get anything going at the site, RIDC and the URA, by partnering, have been “able to manage some of the challenges ... and get the product over the finish line,” Mr. Smith said.
“We’re really excited to be coming out of the ground this fast,” he added.
While the site has challenges, it also has easy access to Route 60, the Parkway West and Interstate 79. Mr. Smith has said it is close enough to Pittsburgh International Airport to be a good location for distribution activities.
RIDC has worked with the URA on projects like the Pittsburgh Technology Center in South Oakland.
“This is sort of rekindling this very effective partnership,” Mr. Smith said.
Burns Scalo Real Estate at one time had proposed constructing two 150,000-squarefoot industrial buildings at the Fairywood site but ended up backing out because of the site costs involved.
At least two other developers had plans fall through for remaking the site.
Because it is a nonprofit, RIDC is able to accept a lower return on its investment than perhaps private developers can, Mr. Smith noted.
“If you have a tough project, come see us,” he said.