Upcycling: reshaping underutilized commercial space as public space
Posted on September 29, 2021 by Rochelle Broder-Singer and has no comment
When it opened between 2002 and 2004, SouthSide Works in Pittsburgh was hailed as a shopping destination that would breathe new life into the former brownfield site of the historic J&L Steel Works. It was at the forefront of the live work-play movement. But at the beginning of 2020, the retail space was only 7% leased, even though it had solid anchors, including REI and Urban Outfitters.
That’s what commercial real estate investor and developer SomeraRoad teamed up with when it became the majority owner and operator of the 34-acre property, after acquiring its defaulted loans in 2018.
Like many retail destinations, SouthSide Works struggled to attract customers as e-commerce grew. SomeraRoad saw an opportunity to turn this underperforming retail destination into a mixed community. The firm enlisted architectural firm AE7 and placemaking firm Cana Development to help it “upcycle” the property — increasing the value of underutilized existing property.
Executives from the three companies discussed the upcycling of SouthSide Works at CRE.Converge 2021 in Miami Beach.
“It was in dire need of a refresh, although looking at it it looked like a nice place to be,” said Philip Wilkinson, AIA, NCARB, LEED AP, director of AE7. The development had too much retail and not enough other applications to draw people in. “The key is adding mixed use that gives more people the opportunity to be on the site day in and day out,” explains Wilkinson. “Not just to destination trips, but to daily trips.”
SomeraRoad aims to transform SouthSide Works from a underperforming retail destination into a thriving mixed-use community. There are several key components of the plan:
Turn a cinema into an office space
The challenge: SomeraRoad soon realized that the 10-screen SouthSide Works cinema was not going to make it.
The answer: SomeraRoad has converted the cinema into Class A office space called the Box Office. That removed 40,000 square feet of retail space from an over-retailed center and brought in 77,000 square feet of office space. The building, once used primarily Thursday through Sunday, “should get people there from 9am to 5pm every day — stay, eat and drink, shop afterward,” said Jonathon Reeser, SomeraRoad’s director of acquisitions.
The Box Office can accommodate approximately 500 employees. Reeser said it is a unique product, offering a creative office option in a market where most new office products are in a six-story suburban style.
The challenge: SomeraRoad believes SouthSide Works really needs to be mixed-use to succeed, but it only had 83 multi-family homes.
The answer: SomeraRoad is turning the last unused lot on the site into a 230-unit multi-family development. Despite the challenges of executing it – including 15 meters of elevation gain – SomeraRoad considers it crucial to balancing SouthSide Works.
Rethink and activate the green space
The challenge: SouthSide Works had 3.75 acres of green space, but it was divided and difficult to use. While it could be attractive for special events, it wasn’t engaging on a daily basis.
The answer: SomeraRoad, AE7 and Cana Development are redesigning the green space for maximum use, during as many seasons as possible, during days, nights, weekends and weekdays. During the process, they foresaw as many as 50 different iterations of how the space will be used. “In this day and age, a public space is only as good as its use,” said Mike Morris, director of Cana Development.
In the former town square, Cana plans small eating and drinking areas, along with flexible outdoor seating. It is designed as an asset to both the office building and the residential units.
The existing Tunnel Park will be revamped with a children’s playground, outdoor space for movies and activities, a community dog park and a seasonal cafe under the co-branded pet store in development, as well as a trail created with REI. Box Office tenants have already approached the company about branding other outdoor spaces.
COVID-19 has made people accustomed to being outside in colder weather, and the goal is to use the outdoor space for seven or eight months of the year.
Quickly change the community’s perception of the property
The challenge: The community saw SouthSide Works as a distressed property.
The answer: SomeraRoad immediately began hosting outdoor movies, concerts, and farmers’ markets to draw the local community back into the development. It brought the Pittsburgh Penguins NHL team and a local artist on site to build six giant steel penguin structures that were auctioned off in support of the Pittsburg Penguins Foundation. These were all “cheap, high-impact things you can do and implement very quickly to change people’s perception of your property,” Reeser said.
SomeraRoad has also invested effort and money in marketing and public relations, both of which have contributed to increased traffic even as redevelopment is underway.
Find the right mix of tenants and usage
The challenge: When SomeraRoad took over, SouthSide Works was 60% retail.
The answer: Today it is 40% shops and 60% offices, with housing on the way. In most cases, SomeraRoad would want a lower share of retail in a mixed-use development. However, 1200 multi-family homes surround the development, shifting the mix of retail tenants to suit that community’s needs.
Finding the right balance of food and drink for retail tenants in a project like this “is part science, part art,” Morris said. Cana has access to cell phone volumes and demographics, as well as traffic patterns. “When you come to SouthSide Works, we know where you’re going to eat, both before and after,” he added. Cana calculates how many food and beverage (F&B) seats the project can support “but there’s a lot of guesswork,” Morris explains. The project’s smaller F&B spaces offer a lot of flexibility to mis-guess, while also satisfying consumers’ desires for smaller dining options and more options.
Financially, SomeraRoad’s position as majority shareholder, the financing structure and its partners provide flexibility in the development of the project. “What gives you that flexibility is that you have the right foundation that you can pivot, you can take some things on the chin and survive,” Reeser said.
What is upcycling?
Looking to the built environment to transform something old into something new and competitive.
Creative reuse; the process of evaluating something that is often ignored and usually considered wasteful, and transforming it into something of higher quality. The upcycled item often becomes more functional or beautiful than it was before.
[FROM CRE.CONVERGE PRESENTATION]
Rochelle Broder-Singer is an independent business writer and editor with over 25 years of experience. Through the lens of her background and training as a corporate journalist, she writes about commercial real estate, economic development, compliance-related topics and more. Connect with Rochelle on LinkedIn at www.linkedin.com/in/rochellebroder or on Twitter at @rochellebroder.