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September 25, 2003

Trustees okay purchase of 2 Oakland properties, construction of steam plant

Trustees have approved Pitt’s purchase of two properties on Forbes Avenue, renovations to Western Psychiatric Institute and Clinic (WPIC)’s 12th floor to increase bed capacity, and construction of a new steam plant adjacent to Trees Hall.

The trustees’ property and facilities committee, which is authorized to oversee property transactions made through Pitt’s treasurer in excess of $500,000 and approve University construction projects costing more than $1 million, approved the four projects at a Sept. 19 public meeting.

The projects include:
• Purchasing the Loeffler Building at 3601-03 Forbes Ave. for $1.9 million in Pitt property acquisition funds.

Located at the northeast corner of Forbes and Meyran avenues, the Loeffler Building includes 31,500 square feet of space on three floors. The first floor will continue to house retail space leased to merchants. Second and third floor office space (currently vacant) will be marketed to one or more third-party tenants and/or occupied by Pitt. The Loeffler Building’s initial asking price was $3.2 million but Pitt reduced it to $2.1 million through “extensive negotiation” and then lowered the price by another $200,000 through negotiating “certain credits” after completion of property inspections, trustees were told.

• Purchasing 3815 Forbes Ave. for $1,675,000 in property acquisition funds.
Located at the northwest corner of Forbes Avenue and Bouquet Street, the property includes three lots upon which two commercial buildings currently are located. Lots No. 1 and 2 contain a vacant two-story restaurant building, most recently occupied by Burger King. Lot No. 3 contains a building with a retail storefront currently leased to a third-party tenant. Pitt wants the entire property to be occupied by retail tenants. The University plans to close on the property on or around Oct. 15, pending satisfactory inspections.
Acquiring the Loeffler Building and 3815 Forbes Ave. are part of the University’s ongoing efforts to improve and strengthen retail services in Oakland, said Pitt Executive Vice Chancellor Jerome Cochran.

• Renovating 10,440 square feet of space on WPIC’s 12th floor North Core and Education and Research Center for $2,133,660 in state capital funds.
The renovations will convert existing office space into a 15-bed inpatient unit. WPIC needs the beds to absorb additional inpatient referrals resulting from the recent closing of the St. Francis Medical Center, trustees were told.

• Constructing a steam plant on the Carillo Street side of Trees Hall. The total project cost will be $19,650,000, including an annual operating cost of $700,000 and debt service of $1,244,567. The Pittsburgh Public Schools (which will use some of the new plant’s steam) will pay $330,000, with the remaining $19,320,000 coming from University debt.

At the start of operations, the Carillo plant will operate only during periods of peak usage to supplement the steam generated by the Bellefield Boiler Plant (BBP), according to background materials distributed to trustees. “As the University’s ownership and steam capacity at the BBP decreases due to discontinuance of coal use and obsolescence of the existing boilers, the Carillo plant’s capacity and operation will be increased accordingly,” the materials stated.

Pitt owns 45.6 percent of BBP but consumed 59.8 percent of its steam output last winter, Pitt’s administration said. And the University’s steam demand will grow next winter as heat is provided to the new Biomedical Science Tower 3 (BST3) and as Trees Hall and the Fitzgerald Field House are connected to the central steam system.

“The latter two buildings are currently heated by three obsolete boilers that require constant maintenance,” the trustees’ background materials stated. Replacing those boilers would cost $1.4 million and installing separate boilers for BST3 would cost $2.5 million. Those costs will be avoided by building and operating the new Carillo plant, trustees were told.

The new plant’s exterior architecture will be in harmony with Trees Hall, according to the background materials.

—Bruce Steele

Filed under: Feature,Volume 36 Issue 3

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