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A Pittsburgh Macy’s Redevelopment Could Offer A Road Map For The Wanamaker And Market East

The closure of a Macy’s location in a historic downtown department store left Pennsylvanians worried and wondering about the future of their city’s retail sector.

But was that Philadelphia in 2025 or Pittsburgh in 2015?

The answer is actually both.

Ten years before Macy’s announced it would be shuttering its Center City store in the Wanamaker Building, the chain revealed plans to close its location on Smithfield Street and Fifth Avenue in Downtown Pittsburgh.

That project's first developer and other real estate players believe Pittsburgh's experience could help inform the future of both the Wanamaker and the struggling Market East corridor, which suffered a one-two blow last month when Macy's announced plans to close and the 76ers pulled the plug on a $1.3B arena project over just a couple of days.

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Ten years before Macy's revealed it would be closing the Center City store in the Wanamaker Building, the chain announced it would be shutting down its store in Downtown Pittsburgh.

Developers faced major hurdles when reimagining what was once the flagship location of the Pittsburgh-based department chain Kaufmann’s. But a decade later, Kaufmann's Grand on Fifth Avenue complex has a healthy roster of retail tenants, including TargetCVS and Five Below. It’s also home to a high-end hotel and dozens of apartments.

Foot traffic at the Downtown Pittsburgh Target grew by 78% between December 2019 and 2024, with the number of monthly visitors jumping from 19,400 to 34,700, according to data provided by Advan Research.

Meanwhile, the Center City Macy’s saw that metric fall by 50% over the same period from 436,000 to 177,000.

The Pittsburgh project could be a road map for TF Cornerstone, the New York developer in the process of acquiring the Wanamaker as its former owner wades through bankruptcy proceedings, said CBRE Executive Vice President Steve Gartner.

“I can see something like what happened to the Kaufmann’s in Pittsburgh,” the Philly-based broker said. “This is not the first time a department store building has closed in an urban core. I think we could take cues from what happens in other cities, where it gets broken up into somewhat smaller spaces with some common elements.”

Praxis Development LLC founder and Pittsburgh native Randy Mineo guided the early stages of the Kaufmann’s project during his tenure with Core Realty, the Philly-based development firm that bought the building for $15M in 2015. He sees great potential in the Wanamaker, even without the Macy’s.

“It’s one I looked at and said, ‘Oh, that would be fun,’” Mineo said. “It’s just a fantastic opportunity.”

Cross-State Commonalities

The two former department stores have a lot in common. They were both constructed more than a century ago, a short walk from their respective city halls, and they each anchored their downtown’s most prominent historic commercial corridor. 

The Wanamaker’s 1.4M SF are spread across 12 floors, while the 1.2M SF in the Kaufmann’s building span 13 levels.

Unique architectural details endear both structures to longtime residents of each city, and are a challenge to replicate with modern construction. 

Many Philadelphians are concerned about the fate of the Wanamaker’s eagle sculpture and iconic organ. Yinzers have a deep love for the hallowed Kaufmann’s clock, which remains on the building’s exterior as well as its legendary wooden escalators, which Mineo said were partially preserved at the Heinz History Center.

The commonalities even extend to the 21st century.

When Core bought the former Kaufmann’s, it wasn’t yet clear that Macy’s would be departing, Mineo said. The same surprise befell TF Cornerstone after it began the process of purchasing the Wanamaker last year.

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The flagship location of the Kaufmann's department store chain in Downtown Pittsburgh was eventually turned into a Macy's.

The closure of Macy's Center City location wasn’t a surprise to retail experts like Gartner: “Department stores have fallen out of favor across the country,” he said.

But it’s not immediately obvious what could fill such a hulking space in the era of online shopping and the decrease in downtown foot traffic brought on by the pandemic.

A spokesperson for TF Cornerstone declined Bisnow’s request for an interview, though the company did provide some details about their redevelopment plans in a statement sent out shortly after news of the Macy’s closure broke.

“We intend to preserve the building’s historic character while introducing modern amenities to meet contemporary needs,” a spokesperson told Bisnow in a statement.

“When Macy’s closes in the spring, TFC plans to begin the transformation of the 114-year-old landmark from retail and predominantly vacant office space, into a mixed-use anchor for Center City, with new entertainment and fitness outlets, shopping, office, and loft apartments all under one roof.” 

Visions For The Future

Prominent historic buildings can be a mixed bag for developers, said David Wilk, the director of Temple University’s real estate program.

“It has irreplaceable authenticity to it, but from a real estate development standpoint, it also means that it would be very costly to convert,” he said. “It creates charm and activity, but it doesn’t necessarily make the numbers work.”

Mineo believes historic tax credits could help offset some of the costs associated with architectural preservation. Core received a $24M historic tax credit for the Kaufmann’s project.

Much of that money was spent removing the center of the former department store to create an internal courtyard. This is often a crucial but pricey step for converting buildings with large floor plates into hotels or apartments. Without it, units with natural light could have only been built on the exterior edge of the former Kaufmann’s.

Murmurings about a coring project like this were explored in reports about converting the Wanamaker late last year, but Gartner believes the building’s 100K SF floor plate is actually an asset.

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The redevelopment of the Kaufmann's involved coring the building to create an internal courtyard.

“There are not a lot of large available spaces like this in the heart of Center City,” he said. “Our buildings tend to be small. Much of our retail on Walnut and Chestnut is in converted houses.”

Gartner believes that an entertainment use might be a good fit for the Wanamaker. He noted that the mini golf chain Puttshack nabbed 25K SF on the ground floor of nearby Liberty Place last year.

Mineo has a very specific entertainment-centric vision for the building. He’d like to see NBCUniversal team up with the Delaware County-based immersive entertainment company Cosm to create a Philly sports and media experience.

Cosm uses massive screens and stadium seating to create a viewing experience similar to what’s available at the Sphere in Las Vegas. The burgeoning chain has big plans for global expansion.

“It could become Philadelphia-centric by providing concerts, sporting events, that sort of thing,” Mineo said. “They could still use the pipe organ and the eagle as part of that whole Cosm development.”

This vision lines up with the stated goals of NBC’s Philadelphia-based parent company Comcast, which made a joint promise with the Philadelphia 76ers to help revitalize Market East after the team walked away from plans for a Center City arena last month.

Wilk was cautious about predicting future uses for the Wanamaker, noting that these decisions need to be backed up by extensive market research. 

But he sees the reimagining of the flagship Macy’s at Herald Square in New York City as another potential road map. The chain added several branded luxury boutiques like Gucci, Burberry and Louis Vuitton to the store as a way to bring in more foot traffic.

“It seems to be working,” said the professor, who believes something similar could be feasible for the Wanamaker. “I would explore creating a collection of luxury brand retailers right there in the Macy’s store, so that you would enhance the draw of people coming in from the convention center and people going out to dinner.”

Successful retail redevelopments like that aren't easy to coordinate, however.

Even a decade ago, before the coronavirus pandemic dealt a gut punch to brick-and-mortar retail, Mineo recalled struggling to wrangle Target into a lease for the former Kaufmann’s space. The chain had just opened a smaller “express” location on Chestnut Street in Philly, and it wasn’t immediately sure if a similar outpost would make sense in the Steel City.

“We kind of had to wait a little bit and they finally decided Pittsburgh was right for them,” he said. “It turned out to be a very good store for them.”

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The organ in the Wanamaker building is one of the unique architectural details that many Philadelphians cherish.

That was far from the only major challenge. Core spent $40M on the redevelopment but faced major construction delays. That led to a lawsuit from Even Hotel, which eventually managed to open its location in the building.

Lubert-Adler Partners ended up taking over the project in 2020. It was finally completed the following year.

“We had a lot of challenges throughout the entire project,” Core owner Michael Samschick told the Pittsburgh Business Times in 2019, adding that the redevelopment “needed a cash infusion to do this at a quality level.” 

Teamwork Makes The Dream Work

When news of the Center City Macy’s closure first broke, lawmakers and stakeholders focused on the future of Market East were still banking on the Sixers building a new arena a few blocks away. Those plans were walked back the following week, scuttling the city’s redevelopment plans for the neighborhood.

“Who is going to be your anchor?” Wilk asked when talking about how Market East might be reinvigorated. “It’s really about really doing a tremendous amount of market research to figure out what this area wants to be in the future… It takes a lot of money and time.”

Aside from finding a use that would draw a large number of people, the city needs to create a redevelopment district along Market Street between the Wanamaker and Fourth Street, he said.

Private-market projects in this area would need access to public sector assistance through historical tax credits, tax increment financing and opportunity zones.

Wilk stressed that business leaders and government officials need to be on the same page about their vision for the neighborhood, which has apparently not been the case for the Sixers and Philly’s elected officials in recent months.

Tight collaboration between Pittsburgh’s politicians and business leaders could also serve as an inspiration on that front.

Private and government partners have invested $600M in shovel-ready projects that will further a vision for revitalization in Downtown Pittsburgh centered on office-to-residential conversions and improved public spaces.

The $62.6M and $22.1M pledged by Gov. Josh Shapiro's administration and the city will be supplemented by $376.9M in private funding from stakeholders, including Pittsburgh’s three professional sports teams.

“Central business districts across the country are facing enormous challenges in the aftermath of the COVID-19 pandemic,” Pittsburgh Mayor Ed Gainey said in a statement. “What sets our experience in Pittsburgh apart is the partnerships we’ve built to lead Downtown Pittsburgh into the future.”