By Ken Alltucker
The Cincinnati Enquirer

Lining the 525 Vine escalator are (from left) Kathy Wilkinson, with McKnight Development; Jim Rudolph and Rodney Fink, partners with McKnight; Lehr Jackson of Williams Jackson Ewing; and Chuck Perlow and Bill Rudolph, also McKnight partners. Currently, the escalator is the only entrance on Vine Street. (Meggan Booker photo)

A Pittsburgh investment firm that bought a high-rise office tower across from Fountain Square plans a $5 million overhaul including a new street-level lobby with shops.

The 525 Vine Street tower's second-level lobby now is accessible only by skywalk or by stairs and an escalator on Vine Street.

While saying it's too early to reveal specific design changes, officials of McKnight Development Co. promise a "grand entranceway" that will complement a pedestrian-friendly overhaul of Fountain Square. That project is envisioned by the city and a private development group, Cincinnati Center City Development Corp., known as 3CDC.

"This ties in well with the program that 3CDC is doing at Fountain Square," said John Markey, principal of The Huntley Group and asset manager for McKnight. "We want to open things up."

Markey expects to start the renovation in early 2005.

McKnight's plan is the first central downtown project announced since 3CDC formed last July with the goal of attracting a new look and mix of shops to Fountain Square and surrounding blocks. 3CDC, which also plans to spark projects in Over-the-Rhine and the riverfront, expects to release preliminary drawings of a reworked Fountain Square in four to six weeks, spokesman Kevin Armstrong said Thursday.

ABOUT 525 VINE ST.

Year built: 1983 Sale price: $16 million Sale date: Dec. 31 Owner: McKnight Development Co. of Pittsburgh Size: 23 stories; 394,000 square feet Vacancy rate: 40 percent Major tenants: Great American Insurance, Marsh USA Inc.

Cincinnati Mayor Charlie Luken applauded McKnight's plan as an important step in restoring street activity to the heart of downtown.

"It's exactly the direction we're moving in," Luken said. "There is no question that the trend across downtowns is to get people on the street. I really want to do that, and I know it's not easy to do."

Among the points debated by downtown stakeholders is whether part of the skywalk should be demolished to direct pedestrians to the streets surrounding Fountain Square. That was recommended by New York consultant John Alschuler a year ago.

The skywalk bridging Vine Street leads to the second-floor lobby of the 525 Vine tower. Markey said it will be up to 3CDC and city officials whether the link should remain.

Luken described the skywalk link bridging Vine Street as "very much in flux."

"Some people will say if it isn't broke, don't fix it," Luken said. "Well, I think it's broke."

Lehr Jackson, the Baltimore-based consultant who is crafting a Fountain Square retail strategy for 3CDC, also said the Fountain Square skywalk link creates a "negative feel."

McKnight has a track record of buying and restoring older or underused buildings. In Pittsburgh, the firm transformed an 800,000-square-foot department store downtown into a fully leased office building known as the Heinz 57 Center.

The firm, which is controlled by two wealthy Pittsburgh families, will test its turnaround skills with the 525 Vine tower, which has a vacancy rate of 40 percent.

McKnight bought the building last December for $16 million from Savannah Teachers Properties. The teachers group acquired the 23-story, 394,000-square-foot tower in January 1998 for $41.9 million, according to Hamilton County auditor's records.

Mike Hartmann, a Colliers Turley Martin Tucker commercial real estate broker hired to lease the 525 Vine tower, believes McKnight's vision and investment will help attract companies seeking downtown office space.

Tenants have historically reacted favorably when a downtown Cincinnati building owner renovates an office with modern amenities, said Hartmann. He blames the tower's high vacancy rate on past owners' "Band-Aid approach" of minimum fixes.

Among those who've lauded McKnight's Pittsburgh projects is Stephen Leeper, who starts April 1 as 3CDC's chief executive. Leeper now is executive director of a Pittsburgh's city-county development agency, the Sports & Exhibition Authority.

Although Leeper didn't work directly with McKnight's Pittsburgh properties, he said the firm has the reputation of restoring value to neglected buildings.

Alschuler, who spread the message of a pedestrian-friendly Fountain Square as the key to reclaiming downtown, said McKnight's plan is a good start for the square.

"The new ownership has a real vision of how that property can work," Alschuler said. "They have been extremely collaborative and open with us."

E-mail kalltucker@enquirer.com