The 2020 economy ends with many questions for Pittsburgh and Allegheny County, and we can only hope that 2021 will answer some of them.
Through early January, we’ll raise some of those questions on this page, recap 2020 developments, and share some forward-looking insights.
Do you have an economic development question? Email it to rich@publicsource.org. We can’t promise that we have the answer, but we’ll provide whatever intel we can.
New today: Sharing opportunity equitably.
Can workers still afford to live in Pittsburgh?
A city whose name is synonymous with hard work is less and less welcoming to people making working-class salaries, especially if they aren’t white.
The results of displacement, gentrification and racial tension were proved early in 2020 when analysis of U.S. Census Bureau data showed that declining Black population was Pittsburgh’s most prominent demographic change over the last decade. The Housing Opportunity Fund’s $10 million-a-year effort to preserve and enhance affordable housing succeeded in adding to the city’s apartment supply, but did little to enable families of modest income to achieve home ownership.
November and December saw a flurry of affordable housing measures.
- The City Planning Commission extended a zoning rule that compels developers doing significant work in Lawrenceville to include affordable units.
- The Urban Redevelopment Authority [URA] board approved an affordable housing budget that slightly increased funding for for-sale home development, from $715,000 in 2020 to $735,000 next year.
- The URA board also voted to approve negotiations aimed at dishing 41 publicly owned properties to developers which would build affordable housing on most of them.
- The Housing Authority of the City of Pittsburgh [HACP] won a grant to plan the revitalization of Allegheny Dwellings, an aging low-income complex that’s now home to 160 families.
- HACP Executive Director Caster Binion outlined to PublicSource a multi-pronged effort to increase the supply of subsidized housing in the city.
URA Deputy Executive Director Diamonte Walker wrote to PublicSource that the events of 2020 led to “an endless stream of public relations statements, philanthropic commitments, and corporate commitments to value and shift investment towards historically disinvested communities.”
Of course, it takes more than talk to produce systemic change. Whatever 2021 brings, Walker promises that the URA won’t be distracted.
“Regardless of where the national conversation trends, we will [remain] focused on addressing racial income inequality, the lack of quality affordable housing, disparate impacts Black people face when looking at the social determinants of health, and rebuilding once thriving business districts and centers of Black culture and commerce.”
Can Pittsburgh build both rapidly and inclusively?
This eternal question resurfaced in September when developer Westrise Capital sought City Planning Commission approval for its proposed Uptown Tech commercial rehab project. The firm didn’t have a detailed plan to involve minority- and women-owned businesses (sometimes referred to, collectively, as disadvantaged business enterprises, or DBEs). The commission held off on approving the project until, in October, Westrise satisfied Hill Community Development Corp. concerns, and got the nod.
Inclusion continued to be a hot issue through December, when the URA board decided to sell South Oakland land to Elmhurst Development, for $1.03 million, to facilitate a $47.5 million office building project. Approval came despite the fact that Elmhurst was planning to spend less than 10% with minority- and women-owned businesses. URA staff pledged “a rigorous review” of Elmhurst’s efforts before inking a sales agreement.
Questions about inclusion also continue to swirl around the Penguins-led effort to develop the Lower Hill District.
City Business Diversity Manager Chuck Durham reported quiet progress on spending with DBEs, in a December email exchange with PublicSource.
“We are seeing more DBEs [that] are prime contractors and professional services” providers, he wrote. He added that early in 2020, the city and five related authorities released a guide to their planned purchases of services and goods for a year, in an effort to give small businesses, including DBEs, more of a chance to plan their bids, or team up.
“We have also exceeded our goals,” of helping minority businesses to win contracts, he said. Annually, he wants to see minority-owned businesses earn 18%, and women-owned businesses earn 7%, of city and authority professional services contracts over $50,000 and construction contracts over $250,000. Through Nov. 30, minority-owned businesses had received 20% of covered contracts, and women-owned businesses 9%, he wrote.
Can Avenues of Hope round its first bend?
When the city and the URA announced the Avenues of Hope initiative in October, the rollout was heavy on soaring rhetoric, but included no specifics on funding.
Since then, the plan to prioritize investments in seven neighborhood business districts in mostly-Black neighborhoods has picked up some cash. This month Pittsburgh City Council shifted $270,000 from the proposed Mon-Oakland Mobility Project toward Avenues of Hope. URA board chair Sam Williamson, meanwhile, referenced the initiative as a potential beneficiary when that agency sold some South Oakland land.
URA Executive Director Greg Flisram wrote to PublicSource that Avenues of Hope may start with incremental improvements — some facade fixes, land purchases and public space enhancements. Also look for “myriad small business loans,” he wrote, “as we help mothballed or dormant businesses flicker back to life.”
The pandemic’s economic aftermath should only reinforce the focus on the Avenues of Hope, according to the URA’s Walker. COVID-19, she wrote to PublicSource, “was another cataclysmic event, in line with a long history of others, that disproportionately impacted the lives of Black people and historically Black places.”
Walker continued: “The Avenues of Hope initiative was born out of a desire to reimagine economic development in Black neighborhoods and provide something that offers more than a false choice between gentrification or failed policies and neglect.” The third option is “culturally astute, community-centric economic development,” she wrote.
That requires money, and the URA is going to look to the state and federal governments, plus philanthropy, to join the city’s effort, Walker wrote. “Wouldn’t it be great to see dollar-for-dollar matches on investments made by the mayor and city council? That kind of fundraising and leverage in 2021 would be transformational.”
Can Pittsburgh plan in a pandemic?
Neighborhood planning processes typically involve years of big public meetings in which people move from table to table, gather around maps and debate, face to face. Oakland started just such a process in late 2019, only to have it go virtual four months later.
The long pause in public gatherings compelled Pittsburgh Mayor Bill Peduto to opt for an online launch of ForgingPGH, a bid to create a first-ever development plan for the whole city. When completed, and if approved by the City Planning Commission, it will inform decisions made by city agencies, guiding approvals and investments through 2040.
What does virtual planning look like? Let’s do the numbers, as provided by city Planning Director Andrew Dash, on ForgingPGH:
- 667 suggestions by 178 people on an interactive map, including proposed paths, workforce housing, business developments, surface parking reductions, green energy investments, and more;
- 458 residents completing surveys about their visions for Pittsburgh;
- 468 people participating in online workshops.
The city also convened focus groups for the North Side, West End, Hazelwood, Homewood/Larimer, Hill District and Hilltop areas, plus a panel of immigrant and refugee representatives, Dash wrote in an email response to questions.
Next up, per Dash: “Creation of the alternative scenarios” for the city. That will involve formation of new working groups on housing, mobility, economic development, recreation and open space, equity, and environment plus energy. “The project is scheduled to be completed in the late fall of 2021 with a citywide comprehensive planning document including a future land use map.”
Planning Oakland could take a little longer, Dash wrote, with the city hoping to “start drafting the plan by next winter.”
Can Hazelwood Green keep chugging ahead?
Work on the city’s biggest development site, the 178-acre Hazelwood Green, did not stop for the pandemic. In fact, its top advisor believes the crisis may make it a more attractive location.
Pre-COVID, the City Planning Commission approved redevelopment of the site’s former railroad roundhouse, which was largely complete by October. It’s expected to become OneValley’s Pittsburgh Innovation Center in 2021.
In September, the development team retained by site owner Almono LP (a partnership of The Heinz Endowments, the Richard King Mellon Foundation and the Claude Worthington Benedum Foundation) announced a planning process for the site’s 1.3-mile riverfront.
So how could an uncertain economy boost Hazelwood Green’s fortunes?
According to Todd Stern, Almono’s development advisor and managing director of U3 Advisors, companies in places like New York City and San Francisco “are actively looking to potentially relocate to less expensive markets elsewhere in the country as a result of new work patterns established during 2020.” What’s so great about Hazelwood? “The sheer amount of land available at Hazelwood Green combined with its proximity to world-class research universities and its riverfront location make it a rare and powerful asset,” he wrote in response to PublicSource’s questions.
The prospect of growth on the site has raised anxiety about potential gentrification in Hazelwood. Stern noted $80 million in investments, over a decade, by the Almono-involved foundations in Hazelwood, including programs aimed at honing residents’ job skills and preserving affordable housing.
A proposed path from Hazelwood Green to Oakland, which would cater to walkers, cyclists and an electric shuttle, was largely panned at a virtual public meeting in October. It drew barbs from Councilman Corey O’Connor, who represents Hazelwood, and was the subject of a city council budgetary reshuffle in December.
If the shuttle’s muddled future dampens the site’s prospects, Stern isn’t letting on. His team, he wrote, is “committed to working with Mayor [Bill] Peduto and Councilman O’Connor to adequately fund [city priorities] and other critical infrastructure projects such as transportation.”
Will the county’s big brownfield finally produce some green?
A year ago, when Mon Valley leaders met at the new Mary’s Vine wine bar in Rankin, the buzz was palpable. The sentiment, according to Rankin Borough Council Vice President William Pfoff: “My God, we’re finally going to get something moving on Carrie.”
“Carrie” is the 168-acre Carrie Furnace brownfield, which spans Rankin and Swissvale. At the time, developer The Davis Companies had proposed a 100,000-square-foot office, research and development building on the former U.S. Steel mill site, silent since the 1980s and owned by the county since 2005. Hopes were also high for a proposed cluster of 10 movie sound stages dubbed the Pittsburgh Film Furnace.
“And then the bottom falls out,” said Pfoff, in a December interview.
By May, The Davis Companies had backed off of its building plan.
Talk of sound stages also quieted. “Efforts are continuing to bring Pittsburgh’s Film Furnace into reality,” wrote Dawn Keezer, director of the Pittsburgh Film Office, which has been working with the Regional Industrial Development Corporation to find partners for the sound stage venture. “COVID has really slowed things down, but we continue to have interest” from movie and TV show firms, she wrote in December.
The county “remains committed,” to Carrie’s redevelopment, Development Director Lance Chimka wrote, in November, in response to PublicSource’s questions. “We intend to open the opportunity for proposals again when there are more favorable market conditions.”
Pfoff said Chimka, hired in 2018, has been “a breath of fresh air,” showing sustained interest in the Mon Valley. He added that the county development department “did agree to talk with some local developers” about Carrie.
Rankin waits impatiently. The borough is struggling to emerge from distressed status, even as much of its land remains untaxed and the economic downturn squeezes all of its revenues, said Pfoff. “You can’t believe how we need this Carrie Furnace.”
Can a deed fee help clear blight from the boroughs?
Other boroughs in the Mon Valley and elsewhere (Wilkinsburg, for instance) struggle less with vacant land than empty buildings. With modest tax bases, they can’t keep up with spiraling abandonment. Some depend on inconsistent federal aid, funnelled through the county, to fund a few annual demolitions of blighted buildings.
In April, Allegheny County Council passed, and County Executive Rich Fitzgerald signed, legislation aimed at helping to rev up the bulldozers. The ordinance imposes a $15 fee on every deed and mortgage filed in the county, with the money earmarked for demolition of blighted properties. The county’s 2021 budget includes $3 million in spending covered by the receipts.
Don’t expect an immediate demolition surge in 2021, cautioned An Lewis, executive director of the Steel Rivers Council of Governments and a key advocate for the program. The county has to get the program up and running, set priorities, create eligibility requirements, craft environmental standards, and more. “All of that said, I do believe that demolitions funded through this process will occur,” she wrote in an email response to questions.
Of course, wrecking a building solves some problems, but creates others, including the presence of an untaxed, empty lot that the municipality often has to tend.
“This is perhaps an instance where an organization like the Tri-COG Land Bank could be utilized as it could hold the property until a new and better use is determined,” wrote Lewis, who is also executive director of that land bank. That organization and others are working on a plan to spur new uses on vacant lots, she wrote. “It should be available in the next few months.”
Has the proposal to frack on the Edgar Thomson mill site run out of gas?
In January, East Pittsburgh’s borough council took a step that would have reverberations throughout the year. It voted to rescind the approval it had given, more than two years earlier, to Merrion Oil & Gas to frack on U.S. Steel’s Edgar Thomson mill site.
Merrion’s plan only involves seven acres of land in East Pittsburgh. The bulk of the operation, including all 18 wells, would be in neighboring North Versailles. But East Pittsburgh’s action to remove a sliver of the site also prompted the state Department of Environmental Protection to suspend its review of Merrion’s proposal. Without DEP approval, the New Mexico-based Merrion can’t frack.
Merrion has petitioned the Allegheny County Court of Common Pleas in an effort to reinstate the borough’s original approval. Merrion Operations Manager Ryan Davis said in a statement supplied to PublicSource that the company “and our local partners are committed to moving forward with this important investment in the Mon Valley and seeing that the meaningful benefits it will generate for the community are realized.”
Fracking foes North Braddock Residents For Our Future see Merrion’s plan as “an obstacle to the healing of over a century of industrial pollution of the Mon Valley,” they wrote in response to PublicSource’s questions. “Fracking itself is a dying industry and we cannot let it take our community down with it.”
The group sees the East Pittsburgh vote as a victory for “the voices of the people of the community” and hopes 2021 is the year when they “finally put this fracking threat behind us.”
Can Downtown recover its swagger after a year of social distancing?
There was a time when it was hard to park affordably Downtown. And then there was a time, for two months early in the pandemic, when Downtown street parking was free — and yet it was easy to find a space.
Since then, some workers have come back Downtown, but the area hasn’t regained its bustle, let alone the jollity of shoulder-to-shoulder events like Light Up Night and First Night.
“Downtown is a place that was built for density — office workers, cultural venues, conventions — and as a result, Downtown has largely been viewed as unsafe since the beginning of the pandemic,” wrote Jeremy Waldrup, president and CEO of the Pittsburgh Downtown Partnership, in response to PublicSource’s questions. The Golden Triangle has seen “a small fraction” of its usual 9 million annual visitors, he wrote, “and that factor alone has significantly impacted the local business community.”
In short, Downtown could use a shot in the arm.
Toward the end of 2020, there were signs at City Planning Commission meetings that developers remain confident about Downtown’s future. In October, the commission heard plans to convert the Allegheny Building from offices to apartments. The quirky Triangle Building is getting the same treatment.
Waldrup said more residents will attract more stores and service businesses, and hopefully contribute to a “robust recovery” for the hard-hit restaurant sector.
On the retail side, city planners got a look at the Target store coming to the building that once housed Macy’s, and before that Kaufmann’s.
Waldrup called Target’s impending arrival “likely the biggest catalyst for growth.” He added: “There are several retailers looking at Downtown spaces and we expect to see more announcements as we move towards recovery.”
Will Downtown take a bite out of the Strip District, or feed its growth?
The City Planning Commission tapped the brakes on Strip development, but only briefly.
Plans for a 20-story tower on the 1500 block of Penn Avenue reached the commission in September, only to be panned by commissioner Sabina Deitrick as “a Lego office building” and “a massive overtaking of the view.” In December, though, developer JMC Holdings submitted a modified design which still reached 20 stories on the Downtown side, but with four mini-towers that gave it more flair than the typical Duplo creation. It won commission approval.
The site is on the eastern end of an unusual four-block-by-three-block area. That end of the still-quirky Strip is zoned as part of the Golden Triangle, permitting Downtown-esque building heights. JMC’s plan will bring the shadows of towers closer to the low-slung shops along Penn Avenue and Smallman Street, even as the neighborhood is seeing new apartment and condo projects, plus the revival of the Terminal and commercial developments led by 3 Crossings.
The pace of change is “kind of overwhelming,” said Chris Watts, chair of the Community Development Committee of Strip District Neighbors, in a December interview with PublicSource. “It’s certainly going to be an interesting time as the Strip transitions.”
He said his group of Strip residents, business owners and property owners isn’t panicking. Far from it.
Redevelopment of the Golden Triangle side of the Strip could add to the retail rebound by making foot or bike travel from Downtown more inviting, Watts said. “The gateway between Downtown and that [Strip] commercial core, we think is really important to bring in the people.”
New residents, meanwhile, could become patrons of longstanding Strip shops, he said. “Strip District Neighbors certainly welcomes [growth], in the context of appropriate development that pays attention to the Strip’s history and works in conjunction with the community.”
Will the Froggy’s controversy simmer on, or jump start Firstside?
Debate over a cluster of buildings along First Avenue and Market Street, Downtown, had City Planning Commission meetings hopping like no other 2020 proposal.
Developer Troiani Group wants to demolish three long-empty buildings, including the one that housed the iconic Froggy’s bar, to make way for a proposed 385-foot residential and office tower. Preservationists argued that doing so would undermine the Firstside Historic District, and claimed the buildings could be preserved.
Troiani got approval to demolish one of them from the city’s Board of Appeals. But after three very long meetings, the commission denied Troiani Group’s application to raze the other two.
Troiani appealed to the Allegheny County Court of Common Pleas, arguing that the buildings “are of no historical significance” and can’t be saved in any economically viable manner. The city’s lawyers countered by citing testimony that the buildings could be reused, and contending that the commission “weighed the conflicting evidence,” so its judgment should be respected. Judge Joseph James held a hearing Nov. 30, and a decision could come at any time.
Preservationist group Pittsburgh History & Landmarks Foundation intends to continue to oppose the demolition “in all the appropriate channels,” wrote Karamagi Rujumba, PH&LF’s communications director, in response to PublicSource’s questions. He wrote that “a demolition of that scale would diminish the integrity of the Firstside National Register Historic District, and also tear down buildings that define the architectural aesthetic” of the Market Street area.
Michael Troiani said he has a demolition contractor ready to go should James rule in his firm’s favor. Then he’ll turn toward lining up the tenant he’ll need to finance the new tower.
“We’ll really push a national marketing campaign to bring a new user to the city of Pittsburgh” with a promise of “pandemic-resilient offices” in Downtown’s southern flank, Troiani told PublicSource in December.
The envisioned tower would also include 150 residences, and/or a hotel. Troiani said he doesn’t think the pandemic changes Downtown’s long-term prospects. A human being is “a social being, and I don’t think that’s going to end. I don’t think city living is over. I just think it’s going to have to evolve.”
When the floodgates of eviction open, will there be lifeboats for tenants?
The coronavirus spurred a series of curbs on eviction that started on March 18. Currently in place: a CDC order barring most ejections through year’s end, and an order by Allegheny County Court of Common Pleas President Judge Kim Berkeley Clark that postpones most landlord-tenant proceedings until after Jan. 8.
“It has been a really confusing situation for both landlords and tenants,” said Robert Damewood, staff attorney in Pittsburgh for the nonprofit law firm Regional Housing Legal Services, which represents nonprofit landlords. “Moratoriums that have been in place have only been in place for a couple of months at a time. Every time they’re near expiration, it just creates sort of a panic.”
In September, during just a few days between statewide and CDC moratoriums, county landlords filed hundreds of cases that could end in the ejection of tenants. The numbers declined after the CDC stepped in.
With the pandemic clearly not under control even as vaccination begins, no one is ruling out further moratoriums or curbs. Last month, Allegheny County Council issued a nonbinding call for an eviction moratorium through Oct. 1.
Moratoriums are, by definition, temporary. Carnegie Mellon University’s CREATE Lab, which has been tracking evictions, recently completed modeling suggesting that without further curbs, courts could be overwhelmed by thousands of eviction filings through 2021.
The periodic panics have spurred some local innovations: The Just Mediation Pittsburgh program, for instance, aims to bring a neutral problem solver to the table before the landlord files for eviction. The crisis, though, has not led to any structural changes to a system that, pre-pandemic, produced around 1,000 eviction filings per month in the county.
“I don’t know anyone who is planning long-term,” said Damewood. “It’s all advocates can do to get moratoriums extended short-term.”
Will construction finally start on the former Civic Arena site?
The Penguins’ development team gave Pittsburgh its most gripping business story of 2020.
The team’s Pittsburgh Arena Real Estate Redevelopment LP [PAR] and its chosen developer Buccini/Pollin Group [BPG] are leading a $1 billion plan to build on the 28-acre site of the former arena. PAR got the rights to the site as part of the 2007 deal that resulted in PPG Paints Arena, and in 2014 agreed on a plan, with the City of Pittsburgh, Allegheny County and the Hill Community Development Corp., to make the project work for the neighborhood.
But nothing has been built. If 2020 was a playoff series, it looked something like this.
- Game 1: In May, the URA delayed a vote to approve plans for part of the site, prompting PAR to cease development operations.
- Game 2: Later that month, the URA approved the plan, and PAR pledged its “full commitment” to the project.
- Game 3: Hill CDC leaders alleged in September that PAR had “pulled themselves out” of community processes aimed at reaching consensus about the project and its effects.
- Game 4: In an apparent effort to improve neighborhood buy-in, BPG in November entered into a series of local partnerships.
- Game 5: The URA in December eliminated one deadline facing PAR, but refused to postpone another one, potentially costing the team parking revenue until it gets the development on track.
The Penguins’ team claims that next year will represent a turning point.
“We will be under construction in 2021 on the FNB Corporation tower, Live Nation music venue, parking garage, and first phase of housing, creating thousands of badly needed construction jobs to help the city and region recover from the pandemic,” Penguins Chief Operating Officer and General Counsel Kevin Acklin wrote in response to PublicSource’s questions.
Marimba Milliones, president and CEO of the Hill CDC, is hopeful, but not satisfied.
“I expect construction to move forward this year assuming PAR and BPG reconfigure and come back to the table with an adequate proposal that meets this moment, and marks this as a turning point for our city and for the Hill District,” she wrote to PublicSource. She added that “they still have a ways to go.”
Acklin wrote that BPG and the Penguins are working on every aspect of the agreement with Hill community leaders, including:
- Plans to include local residents in construction work
- More than $2 million in commitments to minority- and women-owned businesses
- Speedy contributions of proceeds from tax increments and parking tax diversions to investments throughout the Hill
- Partnership with the Hill CDC on winning an infrastructure grant
- Investments in the Hill District Federal Credit Union, Ammon Recreation Center and proposed City’s Edge housing development
- Participation in discussions about Macedonia Church’s potential expansion, the proposed Curtain Call public art project and development of small business kiosks
- Construction of a minority business incubator and a public safety facility.
Milliones wrote that after the “near destruction” of the Hill to make way for the arena, it’s time to “make this right. … This project is not solely about marketing, it’s about true and measurable economic impact, and they have to rise to the occasion just as they rose to the occasion to secure the most valuable land in the city at no cost.”
Can Pittsburgh’s Urban Redevelopment Authority spur development, save homes and serve as the roofer of last resort?
Back when the pandemic was young, the URA released a consultant’s report suggesting that the city’s development agency should become more focused, better connected to potential partners and more resourceful. With the COVID economy upon us, the URA was simultaneously rolling out new programs to help renters, homeowners and small businesses.
By year’s end, URA staff was touting stats like 1,100 households stabilized, of which 85% were minorities. The authority also emerged as a source for funding for large roofing projects. In November alone, the URA subsidized roof work on the Homewood Library, Bry Mard Apartments and Homewood Coliseum, a month after it set aside $3 million to fix the Hunt Armory roof.
It’s hard to say whether that reflects a sharpened focus. But the URA’s agendas since then have reflected one thing that Flisram predicted in April: “a more full turn away from the large master redevelopment projects.”
Aiding transformative development projects used to be the URA’s bread and butter. But the flow of big-ticket proposals slowed dramatically starting in spring.
Flisram blamed “a period of adjustment” in the commercial real estate industry. Instead of dishing subsidies for big buildings, the URA joined with the city to launch the Avenues of Hope plan to prioritize seven neighborhood business districts.
Flisram wrote, in a December email to PublicSource, that “2021 will likely bring more of the same as the economy shifts to recovery/rebuilding mode” and predicted “an even greater focus on overcoming racial disparities.”
Much will depend on the federal government’s willingness to stimulate the economy, and the distribution of a coronavirus vaccine, Flisram added. “2021 will very much be a rebuilding year economically.”
Rich Lord is PublicSource’s economic development reporter. He can be reached at rich@publicsource.org or on Twitter @richelord.
Develop PGH has been made possible with funding from The Heinz Endowments.
