A Pittsburgh real estate developer said Tuesday he hopes to have the necessary funding to purchase the Washington Trust Building by this fall.
Bill Gatti, president of Pittsburgh-based Trek Development Group, told a dozen members of the Washington Business Exchange Network that plans are proceeding to secure $18.5 million in funding Trek projects it will need to convert the landmark building into a combination of commercial, retail and residential space.
Gatti spoke during the network’s breakfast meeting at Panera Bread in South Strabane Township.
The project, announced late last year by Trek and the Redevelopment Authority of Washington County, aims to reconstruct some of the floors of the trust building, currently owned by the Richman family, while preserving many historic features of the 110-year-old building.
According to Gatti, the plan is to take commercial tenants now on floors three through six and regroup them, creating space for 44 one- and two-bedroom apartments. He said the building is currently 40 percent occupied by commercial tenants.
Apartment rents would average about $750 a month for a one-bedroom unit, Gatti said, but some units would be priced at $650 a month for people earning $30,000 a year or less. He said that group could include people who are working, students and senior citizens.
During a brief question-and-answer period, some network members who are downtown business owners asked whether the project, with its specification of some lower-priced rental units, would be classified as public housing.
“We already have enough public housing downtown,” one member commented.
Gatti stressed that the building will be privately owned and managed and will not rely on government housing subsidies.
“Everybody has to be able to pay their rent,” he said. “There are no operating subsidies.”
He said two-bedroom units will be priced at about $1,000 a month.
He said the building will remain on the city’s tax rolls.
“This is viewed as an important building downtown,” said Gatti, who added that his company has experience in converting historic office buildings in downtown Pittsburgh, including the 1907 Century Building, which now includes a mix of loft apartments, commercial and retail space.
Gatti said Trek already has received $625,000 from the Pennsylvania Housing Finance Agency through its Pennsylvania Housing Affordability and Rehabilitation Enhancement Fund and Marcellus Shale impact fees.
The PHARE and impact fee funding must be used to provide “affordable” rental housing for residents who earn less than 50 percent of the median area income.
Gatti said Trek is working with several area banks for remaining financing, which he said will depend partly on the use of historic building tax credits.
If all of the necessary funding is received, Gatti said Trek would close on the building in September, begin construction in early 2014 and complete the work by the first quarter of 2015.
He declined to give a purchase price for the building, which has been for sale since 2010.
Gatti estimated it will cost about $140 per square foot to make the necessary construction changes and upgrades to the building, including a new fire-sprinkler system and total replacement of the building’s mechanical functions.
“That’s what it takes to raise a (historic) building like this” to current standards, he said, adding that Trek intends to preserve as much of the building’s historic features as it can.
When asked how much it would cost to construct a new building of similar size, he estimated $500 per square foot.
“But you can’t put a price tag on a building like this,” he said.