In 2011, Millcraft finalized financing for the redevelopment of the former state office building into 218-unit apartment building.
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by Tim Schooley, Pittsburgh Business Times Reporter
Nearly two years after it bought the soon to be former state office building Downtown, Millcraft Industries, Inc. has finalized its financing and is ready to start construction to redevelop the building into a 218-unit apartment complex.
Canonsburg-based Millcraft announced today that its affiliated River Vue Associates LP has executive closing documents for a financial package through the U.S. Department of Housing and Urban Development, a popular but backlogged source of public-insured financing that is being used for number of significant multi-family developments in Western Pennsylvania.
“It was a long process,” said Lucas Piatt, chief operating officer for Millcraft. “We’re really excited to get started.”
Working with Turner Construction Company as its contractor, Millcraft is already engaged in the construction process for a project expected to take 16 months to complete.
While Millcraft did not indicate how much HUD-backed financing it has received, the company’s proposed total budget for the project is $45.5 million.
River Vue will include studio, one-bedroom and two-bedroom apartments along with one three-bedroom. The development will also offer two-story townhouses within the property. Rents will start at $1,000 per month for studios, with average rents of between $1,500 to $1,600 per month, said Piatt, for a project expected to offer amenities that include a fitness center, game room, operable windows a coffee shop and deli, guest parking and 24/7 valet parking.
Millcraft expects new residents to fully occupy the 16-story building by the third quarter of 2012. The company has hired Lincoln Property Company to handle the leasing at River Vue, with the marketing of the projected scheduled to start in July.
Piatt expects demand will be there for the project.
“If we use Market Square Place and all the other apartments as a barometer, there’s a very strong demand for market rate rental housing in Downtown Pittsburgh,” he said. “We think with the location of River Vue and juxtaposition to Point State Park, we will be the premiere rental property in the city.”
Jim Scalo, president of Green Tree-based Burns & Scalo Real Estate Services, Inc., said it’s no small achievement to close on HUD-backed financing for market rate apartments. He’s undergoing the same process for his company’s redevelopment of the former Goodwill headquarters on the South Side into apartments and expects to close on financing by the end of June.
“It’s not for the faint of heart. These deals take an organization to get closed,” he added, of the extensive due diligence required. “Only the good ones get closed.”
