Kaufmann’s revamp could be just the start
Developer anticipates revitalizing Downtown
Less than a year after taking over the distressed redevelopment of the former Kaufmann’s department store in Downtown, a Philadelphia developer has finished the job, allowing residents to swim or shoot hoops on the rooftop or jam in a garage music room.
But Lubert Adler Partners LP is by no means done in Pittsburgh. In fact, it is just getting started, CEO and co-founder Dean Adler stressed Wednesday.
During an interview, Mr. Adler
vowed to be at the forefront of an effort to transform the blocks around the iconic old department store into a vibrant retail and residential district that will spark more development in Downtown.
“This building is going to serve as the catalyst, not just for the three buildings we may do or will do, but it should encourage local Pittsburgh developers to say, ‘My God, these people are the pioneers. They made it work, and they’re doing terrific,’ ” he said.
Lubert Adler is planning to invest nearly $100 million in buildings near Kaufmann’s. That’s in addition to the $40 million it spent finishing the long-delayed Kaufmann’s Grand project that includes 311 apartments, two floors of retail, a 410-space parking garage, and a 160room Even Hotel.
Mr. Adler, who was in town for a ribbon cutting at Kaufmann’s Grand, said his firm is in the process of buying the Pittsburgher, the former Lawyers building, at 428 Forbes Ave., across the street from the old Kaufmann’s store.
Lubert Adler intends to convert the office building into 130 apartments as part of a $40 million investment that includes acquisition costs.
It also is in “early discussions” with Cleveland-based Stark Enterprises, the owner of the former Frank & Seder department store across the street from Kaufmann’s, about partnering in that proposed rehab.
Mr. Adler, who grew up in Cleveland a street over from Stark CEO Robert Stark, said he is considering a $50 million investment in that Smithfield Street project, dubbed Smith & Fifth.
“We’re under real discussions. It’s still owned today exclusively by Bob Stark. They’re an amazing organization,” he said. “I would be honored to do this venture.”
Stark is planning apartments on the upper floors of the seven-story building, as many as 160, Mr. Adler said, as well as 25,000 to 30,000 square feet of retail at street level.
The number of apartments would be up from 40 previously planned. Stark also had proposed four floors of offices, but Mr. Adler did not know whether that was still part of the mix.
Stark last year had put the building up for sale, seeking $22 million for it, but has since apparently decided to retain it. It acquired the property for $10.4 million four years ago.
During a presentation last spring, Steve Coven, Stark’s vice president of asset management, said the developer had been working with Lubert Adler to upgrade the streetscape between the two buildings.
“Dean and I are longtime good friends, and we have had extensive discussions and are working together to recreate the intersection of Smithfield and Fifth Avenue as the focal point of the Golden Triangle and Smithfield Street as Downtown Pittsburgh’s walkable High Street, Mr. Stark said in a statement.
Back at Kaufmann’s, Mr. Adler said Minneapolisbased Target is on track to open a 25,000-square-foot urban format store on the first floor under the department store’s famous clock in the spring.
Lubert Adler also has signed a retailer to occupy 50,000 square feet on the second floor. While Mr. Adler would not name the tenant, it is believed to be Burlington Stores, which would be moving from the former Gimbels department store several blocks away.
The developer also is in discussions with another national retailer — “a very cool store” — about taking another 10,000 square feet of space in the building.
Mr. Adler sees Kaufmann’s Grand as the anchor for the revitalization of several blocks of Downtown stretching to Market Square.
“It’s not a building; it’s a district,” he said. “If we could clean up this three-block district and lead the way, then it’s self-perpetuating. People say, ‘Hey, I’m going to take on this building right outside the district. I’m going to do a smaller building.’ There are so many opportunities.”
Another key, he emphasized, was enlivening the streetscape in the corridor. Target and other new retail will help in that regard, he said, while adding that more has to be done.
“It’s all about walkability and getting people comfortable walking on the streets and for the streetscape to be vibrant. That is the No. 1 thing we have to achieve. So we’re working with the city to do streetscaping on Smithfield,” he said.
“You need people to be able to have restaurants, to be able to see people on the street so you feel safe, secure, vibrant. Urban cities need soul. You can be great on floors two through 12 or two through 20. But if you don’t solve the streetscape, it doesn’t work.”
Last year, Lubert Adler took over a Kaufmann’s redevelopment that had been plagued by years of delay, lawsuits, and liens after Core Realty, another Philadelphia firm, purchased it in 2015 for $15 million.
Since then, Lubert Adler has injected $40 million into the property, completing all of the 311 apartments, the parking garage, elevators to take residents to their floors, and a host of promised amenities — and more.
It has leased about 60% of the apartments — “well beyond our expectations,” Mr. Adler said, given the pandemic. The apartments — a mix of studios and one- and two-bedrooms — range in price from $1,130 a month to $2,640 a month.
The developer also has paid homage to the department store’s rich history, both inside and out. It has refurbished the clock at Smithfield and Fifth Avenue, a favorite meeting spot for generations of Pittsburghers.
In the lobby, it has built a replica of a vintage Kaufmann’s display case stuffed with department store memorabilia. Oversized prints of old Kaufmann’s catalog pages fill one wall, the Kaufmann’s emblem is stamped on the floor, and store photos grace the walls.
Mr. Adler said it was important to honor that legacy.
“I think Kaufmann’s is a symbol of pride for the people of Pittsburgh. It’s where their parents or grandparents used to come and it was a central shopping area, a beautiful building. It had soul. It had excitement. It had a sense of place,” he said.
Residents who had complained about a host of issues under Core, including a rodent infestation and nonworking elevators, now have a variety of amenities.
They include a rooftop swimming pool and a high school-size basketball court, which will be transformed into an ice skating rink in the winter.
There’s a movie theater on the 10th floor featuring six oversized leather chairs, a 75inch screen, and a popcorn maker. On the department store’s eighth floor, residents can play billiards or darts or practice their swing on a golf simulator.
On the third floor, tucked in the parking garage, is a music room stocked with a set of drums, a guitar and a piano. With at-home work likely here to stay due to the pandemic, Lubert Adler also is planning Zoom rooms for use by residents.
Mr. Adler sees the potential to offer the building’s amenities to the tenants that will eventually occupy the Pittsburgher and the Allegheny Building, which also is being converted into apartments by another Philadelphia developer.
At the same time, he is looking for other opportunities in Pittsburgh.
“We have to first put our heads down and finish execution here. And then we go shopping. We’ve done a lot in six months,” he said.