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Partner out of plans to convert former Armstrong Cork

Wednesday, April 11, 2001

By Dan Fitzpatrick, Post-Gazette Staff Writer

Yet another attempt to convert the hulking, vacant Armstrong Cork factory into loft apartments has been bottled.

Landmark America, a Portland, Maine-based historic rehabilitation company that spent three years working on the Strip District project, is now out as a development partner.

"Their time had run out," said Chuck Hammel, a Strip District trucking executive who bought the 440,000-square-foot factory five years ago. "They couldn't get the deal done."

But Hammel said the Armstrong Cork conversion is still a go.

In the next week or 10 days, Hammel plans to unveil a new out-of-town development partner willing to contribute $18 million. The team also expects to get $5 million to $8 million in tax credits. The rest of the project costs should come from loans, Hammel said.

"We are going to get this project done," he said.

Sound familiar?

For two decades, the brick buildings once used to provide cork stoppers for soda and beer bottles have stood empty along the Allegheny River, filled with rusted metal, broken windows, graffiti, trash and developers' promises. Hammel's original plan was to start construction on 330 apartments in 1998. Because of a delay in financing, that date slid to the summer of 1999. Last year, a Landmark America official told the city planning commission that work would start in fall 2000.

The planning commission sounded skeptical. "Is everything coming together this time?" Planning commission Chairman Tom Armstrong asked last July. "This is a development that has required great patience."

Before Hammel took control of the property in 1996, two other developers attempted renovations, only to fail.

One was Toronto-based York-Hannover Development Inc., which in the 1980s tried to transform the red-brick complex into apartments and restaurants. Failing to raise the needed $40 million, York-Hannover filed for bankruptcy in 1992. Another company, Boston-based Preservation Investments Inc., tried the same thing. Unable to raise the required capital, it abandoned the project in 1993.

Hammel picked it up at a 1996 court-appointed auction, paying $1 million.

He brought in Landmark America and Pittsburgh real estate executive Bob Beynon as partners. Landmark had a good track record, having completed conversions of historic buildings in Erie; Waynesburg; Portland, Maine; and Chicago. With Armstrong Cork, though, Landmark America was unable to raise enough capital. The gap, Hammel said, ran from $5 million to $6 million.

Landmark America could not be reached for comment.

Hammel looked for help from local developers, but was unsuccessful. "Everyone wants the opportunity to make it happen, but no one wants to step up with any real money," he said. So he found help from an out-of-town company, which he declined to identify. A development agreement should be signed soon, he said.

How does he know that this deal will work?

"We have worked too hard. This is going to go."



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