A tale of two districts: In Strip and Firstside, the Peduto administration cheers some development, stops other plans

Pittsburgh is seeing a slowdown in office development, even as housing construction remains strong.

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Brothers Michael (left) and Nicholas (right) Troiani in one of their buildings in Downtown Pittsburgh's Firstside district. They say deteriorating brick makes it impossible to save the structures. (Photo by Jay Manning/PublicSource)

Brothers Michael (left) and Nicholas (right) Troiani in one of their buildings in Downtown Pittsburgh's Firstside district. They say deteriorating brick makes it impossible to save the structures. (Photo by Jay Manning/PublicSource)

From the surging center of the Strip District to the crumbling flank of Downtown’s Firstside Historic District, it’s 2.1 miles by car. But those places seemed like different cities this week.

In the Strip on Monday, Mayor Bill Peduto joined developer Jack Benoff in a sunny parking lot next to an active construction site for the groundbreaking of the Forte Condos project. Though nary a brick has been laid, half of the planned 50 market-rate homes are already sold, Peduto said.

“Even during COVID, we’re staying busy. We’re building new housing," Peduto said. He later added that the city since COVID’s coming has seen "some smaller projects delayed, but not canceled," while others "hopefully will come to fruition next year.”

In Firstside on Tuesday, though, developer Michael Troiani climbed the unlit stairs of the building that once housed Froggy’s bar, noting the brick that, he said, defies repair. “I’d certainly welcome Mr. Peduto to come tour these structures with us at any time to help understand these hardships,” he said.

Troiani wants to tear down three late-19th century buildings along First Avenue and Market Street, and build a 385-foot apartment-and-office tower. The City Planning Commission has blocked him, saying that he should seek a way to preserve historic buildings and respect the prevailing smaller scale of the district.

"The city has acted out of turn,” Troiani said, “and that’s what we’re dealing with here.”

Both scenes reflect aspects of Pittsburgh’s development environment, nearly seven months after the pandemic put a temporary halt to construction.

Housing construction has recovered. City residential building permit applications, which cover single-family homes and duplexes, were a smidge higher this year through September than they were during the same period in 2019.

Applications to build offices, stores, apartments, condominiums and other commercial buildings, though, are down significantly.

The City Planning Commission, meanwhile, has thwarted or postponed action on three major commercial development proposals (including Troiani’s) since July. And the board of the city’s Urban Redevelopment Authority [URA] hasn’t reviewed a new development proposal of more than $20 million in value since May, when it approved an incremental step toward the still-controversial redevelopment of the former Civic Arena site.

Commercial development in the city this year has been “not as much as I’d like,” said Tom Melcher, business manager to the Pittsburgh Regional Building Trades Council, an umbrella organization of construction unions. He pointed to the still-quiet arena site as an example, saying, “There’s a lot of road blocks. A lot of road blocks.”

Housing sturdy, office wobbly

There’s no sign of a slowdown in housing construction.

Greg Flisram, executive director of the city’s URA, noted that the state recently awarded low-income housing tax credits to six proposals within the city, each of which will exceed $10 million in investment.

That’s consistent with Peduto’s housing-first development priorities. “We need to build more affordable housing, we need to build more subsidized housing, and we need to build more market-rate housing,” the mayor said, while cheering the Forte project.

U.S. Census Bureau data shows that through August of this year, the Pittsburgh metropolitan area saw 81% as many new housing units approved as it did all of last year. That pace is better than those of metro Cincinnati, Baltimore, Cleveland, Toledo, Buffalo, Philadelphia or Harrisburg. (Columbus, Ohio, has performed better than Pittsburgh on housing permits, but even that city has seen an 18% drop in commercial building applications.)

The prognosis for the office-and-tech building boom in the city, though, may be darker.

Applications for commercial building permits were down 29% through September of this year versus the same period in 2019. (Some, but not all, of that drop is likely attributable to procedural changes at the city’s Department of Permits, Licenses and Inspections, which in May 2019 began accepting amended applications where it would previously have demanded new applications, creating duplicate permits.)

“[T]he commercial real estate industry is in a period of adjustment,” said Flisram. COVID-19, he said, is especially driving uncertainty regarding office development, as developers and architects weigh the size and layout of the post-pandemic workplace. “People are trying to figure out whether certain trends that they see happening now, on an interim basis, get locked in and become kind of imprinted and permanent, or whether they are kind of temporary solutions, or stopgaps.”

Perhaps as a result, he has seen fewer large, new projects come before his agency, compared to earlier in the year.

Peduto said there’s plenty of building coming, noting that the Penguins’ development team has “said that they’re still going to begin construction in the first quarter of next year” on the arena site. An estimated $528 million development in the Chateau neighborhood, called Esplanade, has slowed but not stopped while Millcraft Investments is “working with the neighbors” before seeking state aid, he added.

Pittsburgh Mayor Bill Peduto speaks at the groundbreaking of the planned Forte Condos in the Strip District. (Photo by Jay Manning/PublicSource)

Pittsburgh Mayor Bill Peduto speaks at the groundbreaking of the planned Forte Condos in the Strip District. (Photo by Jay Manning/PublicSource)

The mayor blamed the dip on permit applications on the spring shutdown and said there was reason to hope that it will be short term. “I look at it with the major developments and how many of them have been stalled or canceled. We haven’t had any canceled.”

A commission that knows how to say no

Developer JMC Holdings wants to build a 20-story office building in the 1500 block of Penn Avenue. It won the endorsement (with reservations) of the community group Strip District Neighbors.

"There was definitely concern about the design” and size, said Chris Watts, chair of the Strip group’s community development committee. But the proposal struck the group as an improvement over the empty, concrete Wholey Building that it would replace. “We wanted to see that property be a contributing property and felt that there were some elements that would benefit the community.”

Last month, though, the Peduto-appointed City Planning Commission voted down the proposal after commissioners called it a “gigantic barrier” and a “Lego office building.” JMC has the option of returning with a new concept.

A rendering of a proposed Strip District office tower, submitted to the City Planning Commission on behalf of developer JMC Holdings, on Sept. 15, 2020. (Screenshot)

A rendering of a proposed Strip District office tower, submitted to the City Planning Commission on behalf of developer JMC Holdings, on Sept. 15, 2020. (Screenshot)

Two weeks later, the commission postponed its vote on developer George Mongell’s proposed Uptown Tech project, a conversion of a former industrial laundry building along the Boulevard of the Allies into a technology workshop and office. Commissioners acceded to the wishes of the Hill District Community Development Corp. whose officers said the developer had not specified the amount of minority- and women-owned business involvement in the construction. The commission could vote on Oct. 13.

Neither Mongell nor JMC Holdings partner Matt Cassin responded to PublicSource’s emails and calls. Commission Chair Christine Mondor declined to comment, saying she could not talk about matters still before her panel, and City Planning Director Andrew Dash did not agree to an interview.

Peduto backed the commission’s decisions. In Uptown, he said, commissioners “want to know specifically that, in development in predominantly Black neighborhoods, there are Black contractors and women contractors that are involved in it.” Regarding the Strip, he said: “We don’t want to see new developments overtake the historic character of a neighborhood, and the Planning Commission has made it very clear to the developer that this design overtakes the neighborhood.”

He also supported the commission’s July decision to bar Troiani’s family from demolishing the Froggy’s building and several adjacent addresses.

“That is a historic district of Downtown,” the mayor said, “and it sets a bad precedent when you buy buildings, don’t maintain them, then declare them not able to be saved.”

Buildings, Band-Aids and lots of attorneys

The Troiani family started buying Firstside parcels about 30 years ago and owns 13 of them, said Michael Troiani. The family took steps to repair and lease the long-vacant buildings but couldn’t find interested tenants. Meanwhile, several of the buildings have become “a card castle,” ready to tumble, he said.

“That’s where the structure is joined, and it’s stressed out,” he said, pointing to one of numerous interior walls in which large cracks, patched with mismatched mortar, are evident. “This has had 100-plus years of Band-Aids on this structure.”

Michael (right) and Nicholas (left) Troiani stand in one of their buildings in Downtown Pittsburgh's Firstside district. They say the buildings are held together with "100-plus years of Band-Aids." (photo by Jay Manning/PublicSource)

Michael (right) and Nicholas (left) Troiani stand in one of their buildings in Downtown Pittsburgh's Firstside district. They say the buildings are held together with "100-plus years of Band-Aids." (photo by Jay Manning/PublicSource)

He wants to replace the boarded-up buildings with a tower including about 150 apartments and 190,000 square feet of office space. But because the buildings are in a historic district, he needs the City Planning Commission’s nod before swinging the wrecking ball.

Troiani provided a timeline showing two years of meetings with neighbors, Downtown groups, historic preservationists and city officials. He won the approval of the Downtown Community Development Corp., whose Executive Director John Valentine told PublicSource: “If you get development with that type of building, you’re looking at jobs, you’re looking at vibrancy in an area that needs that.”

Architect Ken Doyno discusses plans for a 385-foot office tower on Troiani family property in Downtown's Firstside Historic District, during a City Planning Commission meeting held by Zoom on June 16, 2020. (Screenshot)

Architect Ken Doyno discusses plans for a 385-foot office tower on Troiani family property in Downtown's Firstside Historic District during a City Planning Commission meeting held by Zoom on June 16, 2020. (Screenshot)

In June and July, though, historic preservationists opposing the demolition wrote to the commission and then spoke at its July 14 meeting.

“We think we can save the buildings, or part of the buildings, Mr. Troiani can have a new building [and] we can live congenially,” said Arthur Ziegler, president emeritus of the Pittsburgh History & Landmarks Foundation, during the commission’s July 14 meeting.

Troiani’s development team said the buildings couldn’t be preserved. The commission then voted not to allow demolition, while inviting Troiani to return with a new, complete plan for the site.

The Troiani family appealed the commission’s decision to the Allegheny County Court of Common Pleas, where briefs are due in November. The family argues that while their buildings are within the National Register of Historic Places Firstside Historic District, they are not historically significant structures. Restoring the crumbling brick walls wouldn’t be economically or physically feasible, they add.

If the commission had approved demolition, Troiani said, “I would be marketing the opportunity to bring a tenant in from outside of Pittsburgh to anchor a building of about 190,000 square feet in the Golden Triangle.”

Instead? “I have more attorneys than I ever wanted to have in my life.”

Is the city striking the right balance?

Construction contractors represented by the Master Builders Association of Western Pennsylvania rely on a steady stream of projects, and Executive Director David Daquelente told PublicSource that he is optimistic about the post-pandemic economy.

Healthcare and higher-ed construction continues, he said. Planned projects at the arena site, U.S. Steel facilities and the Pittsburgh International Airport should pick up the slack when work at the Shell cracker plant in Beaver County tapers off, he said.

And the city? It has “shown the willingness to put the brakes on” when it has concerns about development, he said. “I’ve not seen anybody involved in this, from the city side, who says they’re anti-development,” he added, noting that he just wants “to make sure that [city] expectations are both reasonable and responsible.”

A feathered denizen of one of the Troiani family's vacant buildings in Downtown Pittsburgh's Firstside district. (Photo by Jay Manning/PublicSource)

A feathered denizen of one of the Troiani family's vacant buildings in Downtown Pittsburgh's Firstside district. (Photo by Jay Manning/PublicSource)

Back on Firstside, Troiani said it’s not reasonable to expect him to preserve buildings that are no longer safe and sound. “If it falls, it’s not because I haven’t been trying to be responsible,” he said, as he climbed down stairs, past mirrors etched with frogs.

He believes First Avenue could become part of a designated walking route from the South Side through Downtown to the North Shore. He could contribute “a pandemic-resilient building [with] about 200 people living here” plus offices, “which means people coming to the street at lunch time and spending money.”

Now, though? Troiani gestured around the Firstside streetscape. “You have empty storefronts, empty storefronts, empty structure, building for sale, empty building for sale,” he said. “We have no density here. We have no vitality. We have no life.”

Rich Lord is PublicSource’s economic development reporter. He can be reached at rich@publicsource.org or on Twitter @richelord.

This story was fact-checked by Sophie Burkholder.

Develop PGH has been made possible with funding from The Heinz Endowments.

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