market consultant hired

A high-density development planned for above and around the Mt. Lebanon light rail transit station took another step forward, as Mt. Lebanon hired a consultant to help hone the plan and find a developer for the project, which could include a mix of residential, office and retail space.

Commissioners in July awarded a contract to Delta Development Group, based in Mechanicsburg, with offices in Pine Township. Commercial Districts Manager Eric Milliron says there hasn’t been a timeline established as of press time, but the consultant’s services are laid out:

  • Help municipal officials write a request for proposals (RFP) for prospective developers.
  • Help find developers with the specific skills required to build over transit lines and shop this project to this specific group of builders.
  • Assist in developing public-private partnerships and other revenue-generating opportunities; help find funding sources including grants.

Milliron says the firm also may perform a market analysis, which is important because the municipality needs to know what the potential scope of a successful development would be, including what would be the best mix of residential, office and retail space. Right now, the municipality is working toward a high-density plan, but if the market would only support a lower density plan (which would require less municipal investment but likely bring fewer tax dollars), it is important to know that as soon as possible. And of course, it is possible the study might find the market unsuitable for the desired development.

“If it’s not a doable project, we need to move on,” Milliron says, though he believes the climate is right because of the economic recovery under way. “If we can’t get this air rights (development above the transit station) project now, it’s never going to get done.”

Municipal Planner Keith McGill says it’s possible the RFP for a developer could be handled in two stages to make the project more attractive. The project is so large that a developer who responds to the RFP would have to spend considerable time and money to submit. Delta may help write two RFPs—one a request for a specific type of developer with financial credentials. Developers could respond to this limited scope RFP with less effort and expense than a complete project RFP. Once the plan is further developed, a list of developer finalists would be selected and eligible to continue competing for the project through the final RFP, McGill says.

Milliron is pleased with Delta’s qualifications to do the consulting work, especially because the firm has experience working with the Port Authority and transit districts. Delta also has specialized staff members who can work on the market study, as well as a team member who worked as the owner’s representative for the Castle Shannon station project.

The contract is for a maximum of $25,000. The commission also is considering Milliron’s request for $75,000 of the 2012 undesignated fund balance to be used toward the market study. Milliron also has pursued grants for the study.

Previous work on the project has included a preliminary engineering study by AECOM that concluded that developers would be able to build a concrete platform over the “air rights” area above the T tracks to serve as the base for a mixed use tower-—a seven-story building and parking garage. AECOM’s estimate for that project was about $36.4 million.  

Photo by Gene Puskar