Bridgeway Capital turns former Homewood factory into space for artists and manufacturers
January 18, 2015 | Joyce Gannon | Pittsburgh Post-Gazette
Since relocating his business in July to a former factory in Homewood, Jason Boone has plenty of space for the reclaimed trees that he fashions into custom tables, counter tops and benches. And for the first time in his woodworking career, the owner of Urban Tree said his furniture shop has an amenity he didn’t expect: sunsets.
In Urban Tree’s new home on the fourth floor of a massive structure built for Westinghouse Electric nearly a century ago, huge windows provide natural light and panoramic views of the city’s East End communities.
“When do you get to have the opportunity to have industrial-quality space with good access and views of sunsets?” asked Mr. Boone.
Bridgeway Capital bought the massive structure at 7800 Susquehanna St. in 2013. It is rehabbing the space for artists and light manufacturers such as Urban Tree with the aim of jumpstarting commercial activity in this corner of Homewood abutting Wilkinsburg near the Martin Luther King Jr. East Busway.
“It’s big enough and undeveloped enough to have a real impact,” said Mark Peterson, president and chief executive of Bridgeway, a nonprofit fund whose primary mission is to provide capital to entrepreneurs and small businesses in Western Pennsylvania.
Acquisition and repurposing of 7800 Susquehanna is the largest and perhaps riskiest deal Bridgeway has undertaken since it launched as a loan fund in the early 1990s. The fund had net assets of $24 million at the end of 2012, according to its most recently available federal tax report.
This is also the first time the fund has purchased a property.
“It is a pretty big leap,” acknowledged Mr. Peterson. “To get into real estate development is a shift in our strategy in a significant way.”
But based on its history of providing almost $500,000 in loans to small businesses in Homewood and its $350,000 investment in the new Homewood Station senior apartments, Mr. Peterson is convinced that a big, commercial rehab project “could become the beacon we wanted it to be for Homewood.”
“We’re hoping to create economic activity where it’s so badly needed … we think this will correct the isolation of Homewood from the mainstream economy that’s gone on for too long.”
Bridgeway bought the building and almost 4 acres it sits on for $1.25 million from a family trust. At the time, the structure’s only occupant was a wood machinery business that was consolidating elsewhere, Mr. Peterson said.
The fund used two grants totaling $4 million from the Richard King Mellon Foundation and $500,000 of its own capital to finance the purchase and do initial renovations, including an elevator bank and restrooms on each floor. Currently Bridgeway is raising money for a second phase of work that will include new windows, landscaping, parking lot repairs and a walkway connection to the busway.
Total project costs could reach $15 million, Mr. Peterson said.
With the financing support from the Richard King Mellon Foundation, Mr. Peterson said, Bridgeway is able to charge below-market rates of about $4 per square foot and allow tenants to build-out their own spaces.
Already, the owners have attracted a diverse mix of occupants, including Urban Tree; Edio Casegoods, a maker of high-end residential and commercial cabinetry; New Precision Technology, which makes tools for automated processes; artist Peter Johnson; designer Merissa Lombardo; the Trade Institute of Pittsburgh, which trains non-college bound individuals, former prison inmates and others for skilled trade jobs; and Rebuilding Together Pittsburgh, a nonprofit that repairs homes for the elderly, disabled, low-income and others in need.
Several other prospective tenants are negotiating for space and Bridgeway will provide about 2,000 square feet on the first floor at no charge for a business center that will be staffed by volunteers; and a gallery for community events.
Among those considering taking permanent space on the second floor is Ma’at Construction Group, general contractor on the first phase of renovations and a Homewood-based, minority-owned business that focuses on revitalization of distressed communities.
Johnnie Comer, a partner in Ma’at, said the company would use its proposed space to train students for skilled construction jobs.
“This is how we see ourselves interacting with the neighborhood. As the general contractor on this building, we have an opportunity to put a lot of guys to work who live in the neighborhood. A big part of rebuilding Homewood is to get people from Homewood trained.”
Of approximately 100,000 square feet of usable space in the five-story building — not including the basement — about half is currently available. That includes the entire top floor, which has 20-foot-high ceilings and clerestory glass windows that will be uncovered as part of the rehab, said William Krahe, president of Grand View Development Co. and the project manager.
The fifth floor would be ideal for a large, single user and the developers have already talked to churches and breweries that have expressed interest, he said.
Most of the floors are 12 inches thick, while ceilings — other than on the top floor — are 11 feet high, he said.
He and others associated with the project believe Westinghouse built the facility in the 1920s and it was used to manufacture specialty electronic equipment. Known among employees as the Sussite plant, Westinghouse used it until the early 1970s. After Westinghouse left, occupants included a federal job training program and the agency formerly known as the state Department of Public Welfare.
During its due diligence process, Bridgeway talked to neighborhood groups and Homewood community leaders to gauge their sense of the feasibility of repurposing the neighborhood’s largest commercial structure.
Among those they approached were Operation Better Block, a nonprofit with a mission to revitalize Homewood through economic development, homeownership and leadership.
“I think 7800 Susquehanna is really good for the community,” said Jerome Jackson, executive director of Operation Better Block.
“Bridgeway is bringing light industry and jobs into an area where folks can actually walk to it. We hope jobs come for our residents and we think it’s an asset.”
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