All of Our Buses Must Sail in the Same Direction

Ed. Note: This is a long, rambling post about Economic Development and the Port Authority, that contains nothing funny and no vulgarity except for one "shit" and a "twat"... and since you've passed them already, you can be assured that the rest of the post is G-Rated. There's an inordinate repetition of "two", however, which we can't account for, but it does provides for a nice Manichean dualism of sorts. We'll pause for a second while you go look up what "Manichean" means in an online dictionary and try to to figure out what in the name of holy hell we were trying to get at. Anyway, feel free to skip this entry and move onto the next post where we'll probably make fun of... let's say... Chartiers City.

With today's Big Ol' Transit Meeting and the impending opening of the Northshore Connector, I figured we'd take a few moments to discuss some more esoteric points of contention about the Port Authority, mostly because I enjoy playing with transit models in my head, but also because I feel the need to need to use the word "esoteric" in a sentence.

Before we begin, however, let's recognizing two things that are important in framing the discussions about PAT: money and money. I feel the need to repeat these points in my discussions about PAT, because they seem to be fundamental assumptions that most people are oblivious towards.

First, there is a difference between Operating Funds and Capital Funds. Operating Funds are those sources of money that allow you to pay for staff, supplies, rent, repairs, etc.; Capital Funds are those sources of money that allow you buy and build stuff. In the Port Authority's world, Operating Funds pay for drivers, advertising, mechanics, schedules and so forth, while Capital Funds get them buses, parking garages, and tunnels underneath the Allegheny River.

Second, these funds are always separate and by statute the twain shall never meet. You can't use Capital Funds to pay for Operating Expenses. Ever. So, for the people that complain "Oh they have money to build the Northshore connector, but why don't they have the money to keep my bus route?" the answer is: PAT was granted a large amount of Federal, State, and Local money to build the Northshore Connector and ONLY the Northshore Connector. If they tried to use the Northshore Connector money to pay their drivers, Steve Bland would be in jail right now. The complaint about service cuts is, at its heart, a complaint about fairs and state and local operating funding.

[As a side point, those in any Local Government know that if you tell the Federal Government that you no longer want the money that you had asked for, the Federal Government pretty much ignores you the next time you ask.]

Now with that out of the way, let's get back to today's meeting. The P-G reported

County Executive Rich Fitzgerald opened the all-day hearing saying the loss of transit service could reverse economic gains seen recently after decades of stagnation.

Let's dissect that for a moment, shall we?

I'd say that there are two major strains of economic development happening in Pittsburgh today. The first being the traditional bricks & mortar that the URA, County Economic Development Department, Allegheny Conference, et al. try to foster. The tools used are familiar: site development & remediation, loan interest loans & grants, TIFs and tax breaks, etc. Philosophically, this kind of economic development can range from lowering barriers to entry for marginal companies to outright "Smokestack Chasing."

On the other side, you have non-traditional economic development, typically coming out of the universities centered around technology transfer and knowledge in general. This is generally smaller scale stuff (the proverbial two man start up working out of some guy's apartment) and is fostered by the free exchange of ideas in and around the university community. These are incremental changes that start to build a wide base for certain industries, but often they result in big things: Google in Larimer, 31 St Studios in the Strip, or UPMC... well, everywhere. The Politicians have a tough time with the non-traditional economic development as there's no building, sewer line, parking garage, or other bricks and mortar "thing" to point to and say "Hey! I helped with that; vote for me."

Which leads me to my point about PAT and Economic Development.

There are two ways that I see PAT influencing Economic Development in and around Allegheny County. First is the traditional way -- new infrastructure, transit lines, and bus routes allow new areas to open up for development and allow old, built up areas to grow without getting choked. Consider the Northshore as a new area and Oakland as a built up area. Through the Northshore connector (arguably), the Northshore becomes more closely integrated with Dowtown, allowing for expansion of the otherwise congested Golden Triangle. Transit in Oakland, meanwhile, reduces the need for space wasting parking garages and impossible to find street parking, thereby allowing more people to come into Oakland on a daily basis.

Which brings me to the second way that PAT can influence Economic Development: moving people around. Think about the late 28X bus route for a second. This route helped commute high wage earners from the Western suburbs into Downtown, while moving low wage earners from the inner city to retail jobs out in the suburbs. So, if a business has a reasonable access to high skilled workers from downtown or low skilled workers in the suburbs, the cost of doing business goes down for the business owner and the cost of being employed goes down for the employee.

So, here's my question: is PAT leading in economic development or is it following?

Let's go back to the Northshore and Oakland again. While the Northshore Connector concept goes back to the days of Skybus, it didn't really get its legs until Stadiums (Stadii?) were already being built. Clearly, PAT was reacting to a development opportunity, rather than using it's resources to help make the site more attractive. Similarly, Oakland is bursting at the seams nearly 20 years after the Spineline concept was proposed. Because of the fear of the cost involved in such an expensive undertaking, PAT is proceeding down a more cautious "Bus Rapid Transit" model, instead of something more integrated with the existing T-Line or at least something off of the existing right-of-ways.

It seems to be a case of institutional myopia. PAT is, in a sense, the one Economic Development engine that straddles both the City and the County. Indeed, it's very presence has a huge impact on the flow of commerce in the region, its air quality, equal opportunities for employment access, physical linkages, site development, and so on and so forth. It is, however, run very much like a bus company. Which is a shame, as there's a real opportunity here to think of PAT as something more than just a conveyor of people and a place for smelly college students to complain.

What is to be done? I'm not sure. Certainly, one of the basic changes that need to be made is to try to see the Port Authority as more than a bus company at the State and Municipal level. Transit Oriented Development (TOD) and Transit Revitalization Investment Districts (TRIDs - a type of TIF area around transit nodes) need to be integrated into the Port Authority's long range plans, rather than a mere afterthought. If this is already happened, PAT is certainly not keeping it a good secret.

In the end, a Port Authority that's thinking about more than transit, but how the Region develops around transit will be a better Port Authority.

Arrested Development

Anybody else remember the following picture?



Don't feel bad if you don't, but for maybe a week in 2002 this was kind of a big deal and the apex of the Fith/Forbes development planning.  The Murphy Administration had big designs for Downtown Pittsburgh: high end retail & living accommodations anchored by big named tenants.  It was going to be a "transformative" event, to use the common parlance being bandied about at 414 Grant Street today.  Murphy lasted a few more years, but the Fith/Forbes Development sputtered and died because of community and political pressures.

But, if you were to ask the Mayor's Office today, they would tell you that what they're doing Downtown is absolutely, totally, utterly and completely different from what was proposed under previous mayoral administrations.  So, of course, the above image is nothing like the following image:



Absolutely, totally different:



And may God help you if you even try to suggest otherwise.

Perfect Foresight

Quick: What were Pittsburgh's development plans in 2004?

While you're thinking about that, there's this:

Pittsburgh Councilman Ricky Burgess unveiled today legislation that would require a six-year capital spending plan, potentially totalling some $200 million to $250 million, for the city's spending on roads, bridges, development and other infrastructure...

He cast the legislation as part of a push he launched in March to ensure that lower-income communities get not just federal development funds, but a fair share of locally generated city spending on paving and other infrastructure matters. He said that would be a change from 30 years of inadequate investment in struggling neighborhoods...

While there's definitely something to be said for increased transparency in local government, there's something completely different to be said for planning for something 6 years out.

Heck, within the next 6 years Homewood, East Liberty, and Larimer could turn into fabulous new markets, and the West End could slide off into oblivion. Or the reverse could happen. In early 2008, people across the country thought that the housing market would carry the US economy to untold heights, instead of throw it down a well.

Projections are hard enough 6 months out, let alone 6 years out. Just ask Council members Harris and Shields about planning for business district improvements in their neighborhoods and how that all works out.

And, just to jog your memory:

In January 2004, Lazarus closed. In June, Pittsburgh Development Group II proposed a 175-acre horse track in Hays. In August, the SEA proposed a North Shore amphitheater. In October, Lord & Taylor followed Lazarus into oblivion. In November, Ebony Development proposed building a supermarket in the Hill District.

Notably missing from this list: any mention of a new Arena.

So much for foresight.

My One String Harp

If you've followed this blog with any regularity, you'll be familiar with my peculiar bugbear with regard to vacant land. If so, feel free to skip this post as it devolves into the typical rantings and raving you'd expect from someone who's obsessed with things like "tax increments" and "the name of Captain Picard's fish on Start Trek: The Next Generation."* If you don't know what the hell I'm talking about, keep reading.

From the P-G:

Blight and abandoned properties are a "growing crisis," robbing this region of millions of dollars. So says a report just released by Sustainable Pittsburgh, the host of a summit on the topic last week.

Vacant and decrepit land is a regional liability in marketing and attracting investment, said John Kromer, a senior consultant at the Fels Institute at the University of Pennsylvania and the keynote speaker.

"If people actually knew how much money they are losing by not having these properties on the tax rolls it might spur them to action," said Ginette Walker Vinski, communications manager for Sustainable Pittsburgh. "If you make the economic case on a regional level, there's so much money we could be making..."

Mike Madison jumps in with a proposal over here, in which he argues for a University sponsored land banking system, which the City does not have at this point in any workable form (although several other Cities do... the land bank bit, not the University part, that is). However, the most important bit being

Most of that vacant land is taxable in theory, but there is no tax revenue associated with it. It's not being developed.

Which brings me to my one string harp:

Back in the day, when the Sabre Systems property assessments first came in, the Pittsburgh City Council, in an effort to cut off its nose to spite its face, eliminated the land/building split on property taxes. Up until this point, land was taxed at a higher rate than the building that sat upon it. When the land/building split was removed, the combined value of the land & building were taxed at the same rate.

So, what this means is that under the old system, if you had a vacant property with a low value, but you were taxed at a really high rate; under the new system you have a vacant property with a low value with a really low rate. If you are a rational actor, therefore, under the new system it is in your best interest to keep a property vacant or a low value building in a state of disrepair, else your taxes go up. Moreover, because I depend on tax money to feed my family, if you're sitting on a piece of vacant property for an extended period of time, you're still paying a really high rate to the City.

I would be curious, therefore, to see what the rate of vacant and abandoned properties was prior to the elimination of the land/building split and the rate is currently. My sense, from nothing more than driving down Fifth Avenue, is that the rate of vacant and abandoned properties has gone up.

Now, I'm not saying that reinstituting the split is going to fix this property problem, but I am saying that it should provide negative incentives for people to leave property vacant.

But that's my one note tune and I guess I'm the only one singing it.

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* A virtual cookie to the first one to know this one. No Googling.

And now a Nutritional Interlude...

Oh dammit:

Penn Brewery has closed.

Jack Isherwood, managing principal of Birchmere Capital that owns the North Side business, confirmed in an e-mail that the restaurant "is closed indefinitely while future options are being evaluated," but he declined to elaborate.

Could this get any worse?

Oh double dammit!

Country singer Toby Keith is bringing his popular restaurant chain to SouthSide Works.

Toby Keith's I Love This Bar and Grill is expected to open on the riverfront next to Hofbrauhaus in late 2010, the Soffer Organization announced today.

Surely it couldn't get any worse than this!

Oh crap:

The 15,000-square-foot restaurant will feature live music, HDTV monitors for watching sporting events and Southern-style cooking, including its signature fried bologna sandwich and deep-fried Twinkees.

Oh for fuck's sake! It's like we're trading in a hand crafted, fine mahogany chest for a vending machine sandwich from Wal*Mart.

Now where am I going to get my monthly strudel fix?

Scheiße!

Two Minutes Hate

Please include in your daily Two Minutes Hate State Senator Jim Ferlo:

The city of Pittsburgh's development arm plans to get back in the business of backing beer, after the Urban Redevelopment Authority board voted today to lend $300,000 to an investor looking to buy Penn Brewing Co. and return its brewing and bottling operations to the base of Troy Hill...

Because the transfer of the building isn't final, URA board member Jim Ferlo, a state senator from Highland Park, voted against the loan. The other four board members voted for it.

Why does Jim Ferlo hate beer?

Ben Franklin once said that "Beer is proof that God loves us and wants us to be happy." Obviously, by voting against this loan, Jim Ferlo doesn't want us to be happy and is thwarting the will of God. People that are thwarting the will of God are in league with the Devil.

Ergo, Jim Ferlo wants you to be unhappy and go to hell.

Remember that on election day: a vote for Jim Ferlo means that you want to burn in hell for all eternity.

Re: Financing, Shitty Urban Mall

There was a day when Parkway Center Mall had "Gold Circle," "David Weiss," "CompUSA," and no carpet. My have times changed:

The developer of the long-struggling Parkway Center Mall has opted to transfer a majority interest to Pittsburgh’s Urban Redevelopment Authority as opposed to paying off the $6.2 million loan in full.

Green Tree-based Kossman Development Co. faced full payment of the loan on June 1 but opted to grant the URA, the city’s economic development arm, a 60 percent interest in the project, said Megan Stearman, a spokesperson for the URA.

Stearman said under the new agreement Kossman will pay 60 percent of the mall’s net proceeds annually toward the remaining debt.

Sounds like the URA is looking at the chance to try to get something out of this deal rather than get nothing. Of course, if the Mall goes totally pear shaped, than this 60% stake is worth 60% of nothing.

And National City Bank isn't around anymore to take over this vacant urban mall.

That being said, "Shakey" mall, is an awesome metaphor for today's real estate/financial market.

Business Districts

Saw this in the P-G:

Mayoral candidate Carmen Robinson used her first major campaign news conference in Bloomfield yesterday to criticize development of neighborhood business districts.

Bloomfield is thriving, the Hill District attorney said, but business districts in Carrick, Homewood and elsewhere are not. She said fellow Democratic nominees Luke Ravenstahl and Patrick Dowd have pursued development policies that support big Downtown firms and corporate entities from outside Pittsburgh, deploying "carnival tactics in a desperate attempt to coax people from elsewhere to step inside our tent."

Ms. Robinson was asked about the Ravenstahl administration's tax abatement plan for more than 25 neighborhoods citywide, which is spurring home sales in East Allegheny, the Hill District, Hazelwood and elsewhere. "Gentrification," she responded, and then pointed to East Liberty. "I believe they're trying to turn it into East Shadyside."

Asked for a policy change she would make in that regard, she said she would form a Department of Neighborhoods to respond to small business needs.

Well, that was the whole article. Obviously the Post-Gazette has kind of cut back on in-depth reporting, printing, and subjunctive clauses. The Trib has a different article, based on the same event, but with a different tone... and a few more words.

Anywho, not to sound like I'm supporting the Mayor or anything, but I'm sort of concerned with what Robinson is suggesting here. Now, I recognize that many neighborhoods have an attachment to their business districts and there are certain amenities that local business districts provide to residents, still, in 2009 Pittsburgh the role of local business districts have diminished considerably over their role in the 1950s, 60s, or 70s. Indeed, the local neighborhood business district I grew up with, which included one market, a pharmacy, a florist, two pizza places, a hardware store, two barbershops, and a dentist is now down to a florist. There are some neighborhood business districts that have been winners, but there have been a whole lot more losers.

So, the question to a Mayor Robinson: is it worth pumping scare resources into 89+ business districts (some of which are doomed from the get go) or to put resources towards those few districts which are doing well in order to sustain them?

No offense, Carmen, but maybe Homewood should be allowed to fail and that other provisions can be made to provide local business districts resources to residents.

And, well, gentrification ain't all bad: it's instant equity for homeowners (although it is a pain in the ass for renters).

I've got a Bad Feeling About This...

Jim over at R2P: Return To Pittsburgh has an unsettling little article out of Newark, NJ:

... "Newark needs people living downtown to realize fully its burgeoning revitalization," Goldman tells GlobeSt.com. "Throughout the country and the world--in places like London, Los Angeles and Pittsburgh--arts centers have led the way in transforming cities. There is every reason to believe that Newark can be the next major urban success story."

Jim adds, "For better or for worse, Pittsburgh is clearly a best-practice model for a number of struggling cities throughout the country."

Frankly, that's the most disturbing thing that I think I've read on the Burghosphere recently: Newark wants to be Pittsburgh.

Perhaps it was the Superbowl, but it seems like we've seen a lot of publicity recently about Pittsburgh being a, well, great place to live. Now, don't get me wrong: I love this place and I do, in fact, think that this is a great place to live.

Articles like the one above, however, seem to imply that what we're doing is part of a consistent, planned strategy, instead of an ad hoc grouping of interests and piecemeal policy decisions. Indeed, certain policy decisions *cough*assessments*cough* would seem to be really, really... well, bad and not conducive at all to redevelopment.

All I can figure is either (a) Pittsburgh is hiding its incompetence really well, (b) we're actually doing something right, (c) other Cities are doing exceptionally bad, or (d) we've been down so long in Pittsburgh, we don't know which way is up.

I hope it's (b) or (d), but I'll wager it's (a).

Re: Taxes and Corporate Losses

One of the functions of taxes is to regulate our behavior. We, as a citizenry, are encouraged to have children, buy houses, buy hybrid cars, move into cities, and stop smoking (among other things) through both affirmative measures -- tax breaks -- or punitive measures -- taxes.

Similarly, the corporate world is encouraged to lessen their tax liability through investing in tax credit programs in which, essentially, companies reduce their overall taxes by buying into certain programs that the government deems worth, i.e., the historic renovation of buildings, inner-city development, etc. etc. The system is a more-market-driven-but-not-quite government investment into certain areas of public interest. The net result is a win for business (lessening of corporate taxes) and a win for the government (no direct subsidies into projects).

There is, however, another way to lessen a company's corporate tax liability: take a loss or, in today's economy, a humongous loss. That's pretty much what PNC is about to do when it picks up National City. My guess is that, because of certain accounting rules, PNC is going to have a couple years to spread out these losses and, therefore, will not need to invest in things like the National Historic Tax Credit (HTC) Program. That gives you a pretty decent sense of how bad National City was really doing.

But, of course, PNC is just a microcosm of all the other firms that are swishing around the drain -- and are probably going to showing some substantial losses in the quarters to come. This forces the question: if all kinds of firms aren't going to have any income to speak of, who will buy all these tax credits, and if the answer is "no one," how will the programs that are dependent on these credits get funded?

And From the "Who Didn't See That One Coming" File

Looks like Mario Lemieux and Mary Conturo are going to be passing around the hat:

The city-Allegheny County Sports & Exhibition Authority Board came together Thursday to agree on a final cost for the new Penguins arena and settled on a figure $31 million higher than previously estimated.

The original budget for the project was $290 million, a 2005 estimate. On Thursday, the Authority board, the Commonwealth and the Penguins approved spending $321 million to open the venue for the 2010-11 hockey season.

The additional funding will be split between the Penguins’ $15.5 million contribution, the state’s $10 million kick-in and $5.5 million from the sports authority.

Some of you may remember from back in March of '07 when the P-G nicely laid out how cost overruns were going to work:

Mr. Rendell said public officials agreed with the team that the previous $270 million construction cost estimate might be too low, and the funding calculations were increased to consider a $290 million pricetag.

The team and the state will split the costs of any increase in construction cost between $290 million and $310 million. The team will cover any cost overrun above $310 million.

So, I'm confused: The Penguins are to pay anything over $310 million, which would come up to $11 million, plus they're kicking in an additional $4.5 million, which leaves $15.5 to be paid for by the Public bodies. That doesn't seem very well "split" to me. Perhaps it's a philosophical thing, but I think I would have liked to see the Penguins share in the marginal cost increases until they got up to the $310 million mark.

Be that as it may, however, it should come as no shock that the budget for this project is all messed up. What with increased fuel surcharges, a financial sector in the crapper, and an economy that is generally going all Tom Joad on us, the Arena project is in dire straits.*

The SEA is saying, apparently, that part of the sports authority’s contribution, due in 2010, may come in the form of two equal-part loans from the Urban Redevelopment Authority and the county’s Redevelopment Authority. Which is fine, except that with the stifled economy, you sort of wonder where these organizations are going to get the borrowing capacity to make these kinds of loans.

And the project still has a negative return on investment... that is, unless the Penguins win about ten Stanley Cups in a row.

---
* Strike that. "Money for Nothing" is the absolute opposite of the Arena situation.**
** Or is it?

Moving the Goal Posts

This story has been sitting in my news feeds for the last few days, so I figure I should be getting around to it. From the Business Times:

Pittsburgh officials Friday completed the foreclosure of four properties in the Beechview neighborhood acquired by developer Bernardo Katz in 2004 and 2005.

Mayor Luke Ravenstahl and other officials are planning to unlock the buildings in the 1600 block of Broadway Avenue in a noon ceremony as part of an ongoing effort to generate interest from developers in the properties.

The city's Urban Redevelopment Authority initiated foreclosure proceedings on the properties earlier this year after the agency said Katz failed to make timely payments on them.

Now, we've covered the Bernardo Katz saga elsewhere, and, let's be fair here, the whole thing is a big old clusterfuck.

That is a technical term, by the way, for an economic development initiative where a mortgagor defaults on his/her mortgage and then flees the country.

So, it's good news that the property is now in the control of an organization that's supposed to have the best interests of the City at heart.

However, I don't think that it's necessarily a great idea to draw attention to a (as we stated above) a giant clusterfuck. It's like taking a giant shit in the living room and proudly asking for a cookie when you cleaned it up. Now, in the current administration's defense, Katz was not their fault... but they could have, I don't know, hastened the end of this mess a little bit more instead of dicking around for the last umpteen months.*

In any case, it's not something that you want to celebrate, but rather something you want to quietly deal with.

---
* So why, you may ask, did this all come about now instead of months ago? What was the impetus here?

Vermicious TRIDs

Saw this today in the P-G (and the Trib for that matter) and felt it deserved a comment:

The city is making its first application for state funds used to boost development near transit stations.

Mayor Luke Ravenstahl is sending legislation to city council today to apply for $300,000 in-state Transit Revitalization Investment District funds, to write redevelopment plans for transit hubs in three city areas: Beechview/Mount Washington, East Liberty and Homewood/North Point Breeze. The Urban Redevelopment Authority is also going to Allegheny County Council and Pittsburgh Public Schools for approvals.

TRID plans are under way for developments by light rail transit stations in Mt. Lebanon and Dormont. The city hopes to spur similar development near the South Hills Junction station as well as East Busway stops in the other neighborhoods.

So I did a little digging to try to uncover what this whole thing is about.

Basically, the bill is supposed to be a tool to encourage economic development at transit stops (subway, light rail, busway, and train stations) and encourage more public transit ridership. Take an existing or proposed busway stop (for example), draw a half mile wide circle around it and you got yourself a TRID district.

Now, here's where it gets interesting:

Consistent with the existing authority or limitations of public transportation agencies to condemn and acquire land for public transportation purposes, such entities are hereby authorized to acquire and improve property located within a designated TRID for real estate development purposes...

If I read that correctly, it gives PAT the authority to assemble property via eminent domain for development purposes within the TRID boundary.

Yes, the same Port Authority that has a half vacant garage sitting next to South Hills Village. Yes, the same Port Authority that dug a giant tunnel under the Allegheny River. Yes, the same Port Authority with persistent budgetary woes. Yes, the same Port Authority. But I digress.

If we go further on:

In conjunction with the formal establishment of the TRID boundaries, a coterminous value capture area shall simultaneously be created to enable local municipalities, school districts, the county and the public transportation agency to share the increased tax increment of real estate and other designated tax revenues generated by new real estate investment within the TRID.

Or, as the folks down at PNC call it "a TIF". Y'all remember what TIFs are, right?

I can see this portion being used to support the improvement of roads, sidewalks, transit stations and water and sewer systems and the construction of new amenities like parking garages that support the economic development investment.

Now, don't get me wrong, I don't think that this a particularly bad idea (apart from the whole PAT involvement) and I think certain neighborhoods in the East End and the South Hills could potentially benefit from this project.

However, if this was truly forward thinking, we shouldn't be focusing on where transit is, but where transit should be and focus our regional development strategies on that.

And believe me, I got a few ideas where PAT can go.

Densities, Development, and Regionalism

Harold Miller, Mike Madison, and Chris Briem have been writing and blogging about the City's dense job concentration. As Harold notes, the Pittsburgh ranks 25th in the number of jobs located in the city, even though it ranks 59th in the number of residents. That leads one to the obvious conclusion: the City has the jobs, the suburbs have the bodies.

Mike's teasing out the inevitable tension between the two: "A "City of Pittsburgh first" approach to regional policy threatens to perpetuate the zero-sum thinking that often dominates regional economic developments efforts. If the City grows, the suburbs lose."

It's easy to see (from 100,000 feet) that a better model for City/Suburb relationship is not one of victim and parasite, but one of symbiosis. Picture the region as a hunk of lichen: fungus and algae mutually supporting one another, and, should either one die, the other would not be able to support itself. To draw out the analogy, the City specializes in the jobs, higher education, culture, entertainment and sports, while the Suburbs specialize in housing, primary education, and small retail.

The theory, however, does not necessarily work in practice. Indeed, the City has its own needs for housing, primary education, and small retail, and suburbs have their own needs for jobs and entertainment. Moreover, the suburbs are competing for housing, retail, and jobs amongst themselves. Municipal policy decisions that are made are not made with view to the entire organism (the region), but rather independently and, as Mike notes, as a zero-sum game.

Of course, the problem is that the first municipality to stop playing the game will be the first to lose; politicians need to raise tax revenue so they can bring in more jobs so they can get votes so they can be re-elected so they can do more projects to increase population to raise more tax revenue so they can bring in more jobs, etc., etc. Municipalities (and elected officials) that are unable to raise revenue through population or revenue through employment, start spiraling down the drain.

But, if the City of Pittsburgh invests in a multimillion dollar corporate center, with the view to increase a corporate presence in the region (rather than just slosh jobs around), surely it is not just the City that benefits. Indeed, not everyone is going to want to live in the City and there will be some "leakage" to the surburban communities... a positive externality, if you would.

So I guess the question really is, can the suburbs win by losing, that is, if suburban developments can be positioned in support of larger City development, then would the suburbs benefit with, but not at the City's expense?

Or would that take too much coordination?

Landmark Announcements

So I saw this in the paper the other day:

An eight-month-old fund that has already loaned $1.6 million to nonprofit groups that boost urban areas will dramatically ramp up its lending, officials said yesterday.

That's because PNC Financial Services Group has loaned $5 million to the Urban Economic Loan Fund, part of Landmarks Community Capital Corp. Landmarks plans to quickly turn that money into capital for street-level revitalization.

"We expect to have a good portion of the $5 million [loaned] out in the next 60 days," said Howard B. Slaughter Jr., chief executive officer of Landmarks, which has as its parent organization the Pittsburgh History & Landmarks Foundation...

Loans from the fund are geared toward neighborhoods in communities throughout the Pittsburgh region. PNC's low-interest, five-year loan allows the fund to offer below-market rates and flexible terms, and to back more risky projects than banks would normally accept, Mr. Slaughter said.

Now, I'm a little leery about all this?

Why you might ask? Well for a couple of reasons:

(1) I'm no expert on housing finance in inner-city neighborhoods, but one must think that this kind of development must be inherently risky, otherwise banks would be taking the lead on it and foundations and the City would be taking a back seat. Compound that with the current state of the lending market, and I have this sneaking suspicion that either the risk hasn't been thought out *or* there's some sort of massive underlying source of funds that's propping up this program.

(2) I'm always suspicious of the tentacles of the Scaife Leviathan, whether that's the Trib, the Scaife Foundation(s), the Allegheny Institute, or the PH&LF and subsidiaries. I can't help think that there's some sort of underlying evil at play here, possibly to undermine and discredit Lukey...

Well, undermine and discredit *more*.

One foreclosure on any one of these projects, and its a big black eye for Luke. Or, alternatively, a string of successful projects and it discredit's the Mayor's economic development agency: the URA.

(3) Dr. Slaughter, until 8 months ago was the head of Fannie Mae in Pittsburgh. You know who Fannie Mae is, right? Not to say that there's any relationship here, but he really got out of there at the right time, didn't he?

Anyway, my Spidey Sense is killing me...

Public Housing & Garfield

The Post-Gazette has an article about the rebuilding of the Garfield Public Housing in today's edition. Here are the nuts and bolts:

When the reconstruction effort was announced in April 2006, it was billed as a $60 million project involving 265 homes that would meld seamlessly into the rest of the neighborhood. The local public investment in the 90-unit first phase, to include 20 market-rate apartments, was put at $10 million.

Not included then: the cost of preparing the site and building roads and sewers. Not anticipated: a market downturn that reduced the value of federal tax credits backing the project.

Now the local public investment in the first phase is expected to be $17.4 million, and the authority may make another $3 million loan to KBK...

Housing Authority Executive Director A. Fulton Meachem Jr. said Friday that he knew a year ago that he had yet to identify $4.1 million needed for roads and sewers. He was holding off on committing his agency's money while he sought state funds...

The gap was filled when [Former HACP Chairman Pat] Ford got a $2 million commitment from the Water Authority and the Housing Authority put in $2.1 million.

And so on.

Dawdling over the Pat Ford scandal once again, Rich Lord doesn't get to, what is in my mind, the big issue until the last few paragraphs:

Some in the community, though, are wondering whether the final product will truly mesh with the rest of Garfield, or remain isolated, allowing it to revert to its troubled form. An older plan involved abandoning some land near the highest part of Garfield Heights and instead building lower down, right into the street grid that runs north of Penn Avenue. That option seems to be off the table.

Indeed, if you look at so much of Pittsburgh's Public and Low Income housing, very little of it is in places that you can get to easily: Addison Terrace, Bedford Dwellings, Arlington Heights, St. Clair Village, Fairywood, Garfield Heights, etc. are all set away from the rest of the communities and, more importantly, without easy access to amenities, necessities, and jobs. Indeed, if you want to get anywhere in these communities, you'll either have to take a long walk, take several buses, a jitney, or drive. None of these options seem sustainable for people that are, by definition, on a low and fixed income. One would have thought that, if HACP was thinking this all the way through, they would have strategically disbursed their public and low income housing throughout the communities or at least provide them with reasonable access to transportation.

I mean, the goal is to get people OUT of public housing and into private housing eventually, right? Right??

Of course, the reason why they didn't is obvious: the Housing Authority had a problem, they had a place that they owned, and they had a budget (and God help them if they deviated from that budget!). It was a short term solution to a long term problem.

It would seem that, as the middle class struggles with $4/gallon gasoline, planners in the Housing Authority should have considered that the costs of transit and access would be equally (if not more) burdensome to the working and lower classes.

But, hey, I'm sure that they'll enjoy replacing Garfield Heights in another 50 years.

On Green Grass and Fences

For all of our hand wringing around these here parts, it's usual to read an article about how Pittsburgh is a downtown economic development "winner." That seems to be the case, however, at least according to the Kansas City Star, which compares its own $4 Billion investment in its downtown with places like Charlotte, Pittsburgh, Oklahoma City and Denver.

Overall, The Star analyzed the downtown progress made in Kansas City and 13 peer cities. The downtowns were compared in 16 statistical measures, but these comparisons have limitations. Some national statistics only measure the first half of this decade. Plus, different downtowns are in different stages of rebirth, with some starting earlier than Kansas City did.

Given all that, The Star’s analysis represents more of a snapshot than a complete picture.

That snapshot, though, shows Kansas City’s downtown progress below average in more than half of the comparisons with its peers — measures such as new bars, new hotels and office vacancy.

Basically, even with $4 billion invested in downtown so far this decade, we still don’t measure up all that well with other downtowns.

The best line, however, comes at the end from the Mayor of Kansas City:

“Pittsburgh’s a winner,” Funkhouser said. “We’re not close to Pittsburgh. It’s got a vibrant street life.

“It’s what I hope we’ll be like.”

The grass is always greener, I suppose.

Impound of Flesh

I saw this report from Friday's PG on redeveloping the City's impound lot:

Yesterday, in the shadow of the 31st Street Bridge near the Strip District, Pittsburgh Mayor Luke Ravenstahl walked among the few hundred wrecked and abandoned cars in the city's impound yard, and nothing dented his impression that there must be a better use for the riverfront land....

Step one: Find a private operator to handle the storage and release of towed cars, at a different location still convenient enough for those seeking to reclaim their vehicles. Interested firms have until May 9 to submit proposals.

Step two: Cut a hole in the box.

Step three: Profit.

No, wait, I'm getting my jokes confused.

Step two: Cast about for ideas for redeveloping the 2-acre site, and possibly the 8- to 10-acre parcel next door, where city trash trucks now sit.

Step three: Work with the Riverlife Task Force and a yet-to-be-selected consultant to turn past and future visions of the water's edge into a comprehensive plan that could include a rewrite of city zoning rules for the shores..

"The idea is that the riverfronts are really precious property from every perspective," said Riverlife Executive Director Lisa Schroeder. She said an effort to revitalize a Y-shaped swath of riverfront is 60 percent done, with another 20 percent underway, and the Strip parcel would be a step toward completion. "We really feel like we're reaching a tipping point now."

Despite all the attention that this idea has generated in the press, this is actually a pretty old idea. Back when Tom Murphy was still in office, the idea was floated as a way to divest the City of some very valuable riverfront property that wasn't being used for its highest and best purposes.

There was a problem though: the City had to find itself a parcel of land to replace the impound lot and, because of the scarcity, most of the large parcels of flat land that were available were too valuable to devote to such a cause. The solution that was presented, whether real or in jest, was to purchase or lease property from the neighboring municipality of McKees Rocks and have them deal with it.

Personally, I thought it was a very clever and unique idea, even though it never came to fruition.

Small Victory for Arena Foes?

I suppose very few people noticed this article buried in the back of the Trib:

The Pittsburgh Stadium Authority on Friday gave a North Side developer 45 days to meet with labor unions and social services groups before it would be willing to approve construction of a $27.5 million, 178-room Hyatt hotel...

Barry Ford, Continental's president of development, agreed to "have a dialogue" with the union-backed group North Side UNITED, which is seeking a community benefits agreement with the private developer that includes support for youth education programs, environmentally friendly design and jobs...

If you've been paying attention, this group is part of the umbrella group Pittsburgh UNITED, which has been at the fore front of the opposition to the new arena and casino, demanding similar concessions from both the Penguins and Don Barden.

So, is this just a small victory for the Pittsburgh UNITED group or is it a portent of things to come?

Development Plans

Last week, if you were paying attention, you would have heard that the City is embarking on a new unified development plan:

Mayor Luke Ravenstahl said that, in the past, the city usually dished out development dollars based largely on prior years' funding levels. "Maybe they're not being allocated the way they should be," he said. "We need to make decisions based on real, hard numbers."

We here at the Angry Drunk Bureaucrat, at great personal peril, have managed to sneak out a copy of the Mayor's first draft of this plan.*


Click picture to embiggen.

Many Bothans died to bring us this information.

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*We apologize that the image is sideways, but our intern "Z" couldn't figure out how the friggin' scanner works.