Developing Trend Feature 37 the Natural Gas Industry in Recovery 06 Mobility: the Future of Development 40 Eye on the Economy

DEVE LPittsburghOPINGFall 2016

MOBILITY The Future of Development

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05CON President's MessageTENTS Developer Profile 31 Burns & Scalo Real Estate Services

Developing Trend Feature 37 The natural gas industry in recovery 06 Mobility: The Future of Development 40 Eye On the Economy

Office Market Update 43 Colliers International Pittsburgh

Industrial Market Update 49 Hanna Langholz Wilson Ellis

53 Capital Markets Update

Legal / Legislative 59 Outlook Pittsburgh’s affordable housing initiative

Benchmarks 65 The Denver Transit blueprint

Voices 69 Legislators weigh in on the role of government in aiding development 23 Development Project Profile East Side Bond Apartments 73 News from the Counties 2016 Buyer’s Guide 81 People / Events 88 Buyer’s Guide The 2016 NAIOP Buyer’s Guide puts contacts for designers, engineers, contractors and lenders in one easy-to-use resource.

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PUBLISHER Time has been on my mind lately. While we The second saying “There is no time like the Tall Timber Group measure time in very precise increments... present.” comes to mind for two reasons. The www.talltimbergroup.com seconds, minutes, hours, days, weeks, years…it first is because I am not sure that there has ever remains an enigma in many ways. been a better time in the last 40 years to be in EDITOR commercial real estate in Western Pennsylvania. Jeff Burd 412-366-1857 As I think about time, two sayings come to We are enjoying growth in industry sectors [email protected] mind. “Time flies.” and “There is no time like such as information technology and energy the present.” that is reflected in all aspects of commercial real PRODUCTION estate including industrial, office, mixed-use, Carson Publishing, Inc. The first is particularly impactful to me as write hospitality and multi-family. The national Kevin J. Gordon these comments for two specific reasons. I attention that we have been receiving is a well- [email protected] recently dropped my first-born off for her deserved testament to what is happening here. freshman year at the University of Alabama ART DIRECTOR/GRAPHIC DESIGN and my time as president of NAIOP Pittsburgh “There is no time like the present.” also comes Carson Publishing, Inc. Jaimee D. Greenawalt is quickly coming to an end. It is hard for me to to mind when I think of those of you reading believe either of these things. these comments who are not NAIOP Pittsburgh CONTRIBUTING PHOTOGRAPHY members. I have always marveled that while our Port Authority of Allegheny County While I will keep my thoughts on the passage membership is 300 + we attract 700 real estate Massery Photography of time vis a vis my family private I would like to professionals to our annual banquet. Why? Do Mark Grasso share with you my thoughts about the last two you not know or understand the benefits of The Mosites Company years steering Western Pennsylvania’s premiere belonging to both NAIOP Pittsburgh and NAIOP Regional Transportation District commercial real estate organization. First, I corporate? Have you not seen your peers in Tall Timber Group will say that it has been my sincere privilege to the industry benefit from their membership? I CONTRIBUTING EDITORS work with NAIOP Pittsburgh’s leadership. My can tell you that NAIOP Pittsburgh has been Karen Kukish collaboration with them has been among the important in my career development……. best of my professional career and I am certain professionally and personally. ADVERTISING SALES that the organization is in good hands as I move Karen Kukish out of my role as president. So...since there is no time like the present I 412-837-6971 suggest that you visit naioppittsburgh.com or [email protected] The past two year’s have seen many NAIOP naiop.org and learn more about how you can Pittsburgh successes. We continue to offer the join forces with us to better your career and the MORE INFORMATION: best networking and educational opportunities Western Pennsylvania’s commercial real estate DevelopingPittsburghTM is published by Tall Timber Group for NAIOP Pittsburgh in the industry. Attendance at our monthly industry. 412-928-8303 education programs continues to grow and www.naioppittsburgh.com registration for our annual banquet in 2016 was Thank you, the second highest in the history of the event. No part of this magazine may be Night at the Fights is on an upswing allowing reproduced without written permission us to to support the great work of Habitat for by the Publisher. All rights reserved. Humanity of Greater Pittsburgh. This fall we will This information is carefully gathered and com- work with the Pittsburgh Regional Alliance to piled in such a manner as to ensure maximum offer timely and important programming during accuracy. We cannot, and do not, guarantee a visit from national site selectors in November. either the correctness of all information furnished nor the complete absence of errors and omis- Advocacy has also been an important part sions. Hence, responsibility for same neither can of my tenure. Our goal, as always, has been be, nor is, assumed. to work on a national, statewide and local Keep up with regional construction basis to ensure that conditions for commercial and real estate events at real estate development are positive and fair. www.buildingpittsburgh.com We have visited our representatives in both Harrisburg and Washington, D.C. to voice our opinions and concerns and we work with NAIOP corporate to keep abreast of issues that could impact the industry. Currently we are working on matters such as permitting and affordable Brian Walker housing locally; DEP and DCED issues statewide; NAIOP Pittsburgh President and tax reforming and energy policy nationally.

www.developingpittsburgh.com 5 FEATURE

Photo by Port Authority of Allegheny County.

6 DEVELOPINGPITTSBURGH | Fall 2016 FEATURE

t’s about mobility. That’s the message that is being communicatedI at virtually every presentation or conference focused on the future of transportation. Advances in technology and unexpected shifts in societal expectations have changed a conversation about highways and transit from systems to individual mobility almost overnight. As that conversation has evolved, so has the future of commercial real estate development.

Pittsburgh has changed. It may seem like the last five years have been something of a civic victory lap, celebrating a remarkable revitalization of a regional economy. That renewed regional vitality was a rising tide that lifted the fortunes of commercial real estate. You could make an effective argument that the turning point in this transforma- tion occurred when the attitude of Pittsburgh’s people changed. Coincidence or not, real economic progress began after the “Imagine Pittsburgh” campaign kicked off in 2008. That progress gave leaders the room to dream and plan about what Pittsburgh should be like in 2030. One of the key components of a future plan is transportation.

www.developingpittsburgh.com 7 FEATURE

New Technology He points out that Uber’s share of the ridership market is still muted Stan Caldwell calls what is going by the company’s relative newness on in transportation and mobility to the market. In the west, where “disruptive technology.” Caldwell San Francisco-based Uber began, aving played an is an adjunct professor of trans- the company’s model is the enormous role portation and public policy at dominant mode of transportation. in convincing Carnegie Mellon’s H. John Heinz In Las Vegas, the city is consider- Pennsylvania’s III College. He’s also the executive ing eliminating the authority that legislatureH that the citizens of the director of the Traffic 21 Institute regulates taxi cabs because so commonwealth would tolerate and deputy executive director of few people use taxis that there higher gas prices to fix its roads, the Technologies for Safe and aren’t many issues to regulate. In Pittsburgh’s civic leaders have Efficient Transportation University a city that exists almost exclusive- undertaken another seemingly Transportation Center. ly for tourism, that’s a disruption impossible task: imagining the that would have been unthinkable future of the region’s transporta- Seated at the junction of technol- five years ago. tion infrastructure. ogy and public policy, Caldwell believes that the changes going Uber is generally near the center Planning for the future of mobil- on in mobility will go beyond of most conversations about the ity allows for the correction of simply making transportation future of mobility, and for good bad decisions of the past or the more efficient and convenient. reason. The company’s rise has adjustment for good decisions He looks at the rapid growth of been meteoric. Just over two that no longer work. Getting this Uber for how it is disrupting an years ago the Pennsylvania Utility opportunity right is critical for a Commission (PUC), with the full region like Pitts- support of Gov. burgh, where a Corbett, took new economy steps to try to is struggling to eliminate Uber work with old and its competi- infrastructure. tor Lyft when Better mobility the companies can also help wouldn’t alter with another their modus critical Pitts- operandi. Mayor burgh problem: Peduto defended workforce. It’s the businesses. estimated that The PUC fined only 30 percent Uber, then of the people allowed them to living in cities operate (while in America can not rescinding access jobs they the fine). Less are qualified to than a year later, do. That number Image courtesy Uber Technologies Inc. Uber began may be light in a its rise as one of Pittsburgh’s region with poor fastest-growing employers. access to all parts of the city. entire industry. He believes that Pennsylvania finds itself in the Attracting new businesses and within five years new technology position of defending an $11.4 workers is extremely hard work. will disrupt most institutions that million fine (after recommending Making jobs accessible to all of touch transit and transportation, a fine of $50 million), while at the talent within the region could including the built environment. the same time welcoming Uber significantly ease that burden. Technologies and celebrating the “What has happened has been fact that the company is doing Pittsburgh’s mayor and its lead- driven by the public,” Caldwell groundbreaking research for the ers are trying to think big about notes. “For years people tried to future. What a difference two the solutions to the problems of get more taxi service in Pittsburgh years makes. getting around. But it may just be without success and concluded it that the future of mobility won’t wasn’t a taxi town. Within a year What we’ve learned in those two require big solutions, just smart or two, Uber has 25 percent of all years is that Uber’s ride service ones. rides.” is but a first step in the com-

8 DEVELOPINGPITTSBURGH | Fall 2016 FEATURE pany’s technological advances, one that allows the company to gather enormous amounts of data about whom we are and where we go. For now, Uber’s next play is in getting an automated vehicle to the market first. Already a tenant in multiple facilities in Lawrenceville, Uber has agreed to be the first tenant in the Almono development. They will convert the former roundhouse building into research facilities and invest millions in building a test track at the site. The Imagine Transportation Crowd Sourcing Initiative produced responses that showed that Southwestern PA residents shared many concerns about the future of transit. The race to get the automated vehicle to the marketplace has been joined. You only needed to on his or her location. Apps exist look at the partners involved in to evaluate the cost, schedule Pittsburgh’s unsuccessful applica- The race to get the and convenience of the multiple tion for the $50 million Smart mobility options available at a Cities Grant to understand that automated vehicle to given location – including ride almost all major players in trans- the marketplace has sharing and walking – and making portation view this technology as recommendations depending upon game-changing for their business. been joined. You only whether the user is seeking to find the fastest, cheapest or most In the short term, the impact of needed to look at direct mode of transit. the new technology on the built the partners involved environment has been primarily in This mobile information usage leases. Part of Google’s growth in in Pittsburgh’s will be one of the most significant Pittsburgh has been because of its technology influences of the next quest to make the first automated unsuccessful five years. The use of real time car and to use its existing lead information is what enables Uber position in mapping to provide application for and its like to operate. Due to the the information needed to oper- the $50 million Internet of things, there will be ate the vehicles without drivers. more access to real-time informa- Caterpillar recently signed as the Smart Cities Grant tion that should significantly first tenant in RIDC’s Lawrencev- increase the penetration of ride- ille Technology Center, taking to understand sharing and private taxi services. 10,000 square feet for its robotics The growth of such services will research. Expect these and other that almost all accelerate more dramatically companies involved in the chase major players in after the adoption of 5G com- to expand their presence here as munication, which should occur the research advances. transportation view in 2020. The use of 5G will make communication between things – A lot of the other new technology this technology as sensors and devices – faster and associated with better mobility is game-changing for cheaper. 5G will also allow more in the arena of software, specifi- information from the field to be cally smart phone apps. New apps their business. communicated to the people. are growing that will track the most efficient public transporta- Letting the imagination wander, tion options for the rider based it’s possible to visualize a time

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when vehicles are com- municating with each other to judge speed PAT has created guidelines for and braking distances transit-oriented development to or traffic signals are encourage more private investment sensing congestion and along public transit assets. adjusting light changes to optimize traffic flow. General Motors is intro- ducing vehicles in 2017 that will have radios that can communicate with the infrastructure and other vehicles, allowing information to be “seen” from vehicles that are around corners.

The advancements in technology are both a blessing and a curse to those trying to plan the transportation of the future. Uber has enhanced public transportation in that it supplements the existing system. With a smartphone app, getting an Uber ride is a matter of a few minutes or less. Workers in Downtown can use that service to make a meeting out in Green Tree or South Side without having to rely on their car. One less parking space is needed. One more rider uses the light rail system or a bus to commute. What will happen when Uber expands its services to what Uber ultimately wants to offer? Would a system of automated on-demand vehicles supplant the need for a bus rapid transit system a critical connection between the connect jobs to where people live or expanded LRT? regional home of the gas industry – but also create additional develop- Southpointe – and the future of the ment corridors. Emerging technology Think of how decisions about high- gas industry – Monaca – with the could change these corridors and ways might have gone in 2006 versus airport in between. It’s not hard to the developments that are drawn to 2016 with the knowledge of how the imagine a string of industrial parks them. natural gas industry would develop. like Findlay Industrial Park or Chap- The Southern Beltway, which was man Westport located all the length Old Technology intended to connect the deep South of that new highway when the gas Hills to the airport and stimulate industry matures. One of the beauties of the new tech- development in an undeveloped nology is that most advances are be- portion of the region, will now make Development is drawn to jobs and ing developed to make using the old commuting corridors. New corridors technology – buses and rail – more

www.developingpittsburgh.com 11 FEATURE

enjoyable. These existing transporta- Port Authority of Allegheny County. propriate and conducive to economic tion modes can certainly be improved “We know that development built development. but for now there isn’t a technology along transit usually does very well. that is aiming to eliminate mass tran- For us, it brings riders. It’s smart “We’re looking at how to take land sit as a key component of modern development. It allows us the ability we own and maybe in joint develop- mobility. to promote sustainable land use. It ment or on our own, make sure has a host of positives.” that the development around there In Pittsburgh, the Port Authority is the appropriate use, whether it’s was one of the big beneficiaries of To that end, PAT wrote what are walk, bike or other modes,” McLean Act 89 of 2013. A main provision of in Pennsylvania the first transit- continues. “In terms of looking at the Act was the inclusion of transit oriented development guidelines. development and participating in de- systems in the funding mechanism, The guidelines are best practices that velopment, we’re taking a new role which gave PAT a stable income were adopted by the PAT board of in it. We see it as a revenue source stream for the first time in decades. directors and vetted by the Congress going forward, with the Port Author- Act 89 didn’t provide for funding of Neighboring Communities, a Pitt ity participating with a developer or that would allow PAT to expand or program that promotes cooperation the community and adding the value restore many routes. To increase among the City of Pittsburgh and 39 that our stop brings to the project.” ridership and connect more people communities. to the transit system, PAT is taking Two major suburban developments another approach: transit-oriented PAT is stepping into the world of that are transit-oriented are nearing development. development to promote ridership construction, although by coinci- of its public assets. In May, PAT held dence both predated PAT’s initiative. “We’re looking at our six fixed a developer’s forum to begin the guideways – east, west and south conversation about transit-oriented SunCap Property Group is in the final busways and our rail - where we project. PAT is mapping its land stages of pre-construction, working own additional land along them,” inventories and working with com- with Rycon Construction to firm up explains Ellen McLean, CEO of the munities to see if their stops are ap- the budget on a 300-unit apartment

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project across Village Drive from the that’s like a bowling alley and that is Building structured parking in resi- Port Authority’s South Hill Village totally undermined. After that much dential properties is especially expen- parking garage. The garage serves time we abandoned that for some- sive. A parking space in a surface lot hundreds of commuters who use the thing more practical. We’ve been is $1,500 to $2,000 to construct but Light Rail Transit system from Upper very lucky to have state grants that a space in a parking garage may be St. Clair, Bethel Park and northern have hung in there with us through- as much as $20,000. That adds a lot Washington County. out. The state and local politicians to the cost of the project. Developers have been very supportive.” build that into the pro forma but the In Castle Shannon, JRA Develop- rents they can charge are determined ment is in the final stages of JRA is working with Mascaro Con- by the market, not the construction securing financing for its Castle struction on the project, which Aiello cost. Parking counts are determined Shannon Station project, a mixed- estimates had a 70/30 chance of go- by code. In a city like Pittsburgh, use development that includes 152 ing ahead. “It should all be decided with historically scarce parking space units of market-rate apartments, within 60 days,” he says. in and around the central business 14,000 square feet of service district, there isn’t a lot of flexibility retail and a parking garage. JRA's Structured parking garages are a for zoning variances. founder, Jim Aiello Sr. says the part of the old solution to build- site constraints that usually come ing in densely populated areas. As One byproduct of the rapid ad- with transit-oriented developments Americans became more dependent vancement of ride sharing and the plagued the planning of the project upon cars for daily transportation, imminent technology of automated for seven years. the demand for parking soared. In vehicles is that parking counts are the suburbs the solution was fairly becoming obsolete. The younger “It’s been a career,” Aiello jokes. simple: allocate some of the land generation that is moving into cities “The first seven or eight years were to parking lots. Within dense urban is proving to be more likely to use spent working on something that areas, where ground is more pre- public transit or bikes instead of was totally unrealistic. In Castle cious, vertical structures were the owning a car. That’s the advantage Shannon we’re working with a site solution. of urban living after all. These trends

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aren’t necessarily glimpses of the except for what we had to build and was primarily a residential trend, future. The changes in behavior are put them somehow towards building with people making the decision to already showing up more in 2016. a better transportation system,” Guy move back into cities to be where asserts. “Every developer can partici- they could live, work and play “The research being done on driver- pate like that. Rather than building without having to drive from one to less cars is fine but if they developed parking that isn’t going to support the other. That phase of moving back one right now it wouldn’t be legal what tomorrow’s generation wants, was characterized by a different set on our roads,” says Steve Guy, CEO we should figure out a better way to of dynamics than today. More often of Oxford Development. “What could move from one transportation portal than not, those moving back to the be done right now is change the to another.” city were professionals who had lived way we do parking. We’re forced to in the suburbs for a while, often build parking to a code count but Ray Gastil, the city’s planning re-urbanizing after raising children. the trend is going the other way director, agrees with the vision Steve New Urbanists came from all walks with the users, especially in the Guys espouses. As the person ulti- of life but the prototype was an fringe CBD or fringe urban areas. mately responsible for Pittsburgh’s empty-nester looking to be where We should be figuring out how to zoning regulations, Gastil can’t get the action was. accommodate better communica- the cart before the horse. Over the past five years, the move to the city has had similar motives but has been subtly – and not so subtly – different. The emphasis is on density rather than urbanization. That may seem a semantic difference but there is more substance to one than the other. New Urbanism was about lifestyle, but the attraction of density has more layers. Density is also about a more sustainable way of living. Density brings more opportunity, more economic activity. And density also lends itself better to a multi-modal transit environment. Not surprisingly, density has been very attractive to younger adults and that’s where the real importance of higher density lies.

Photo by Port Authority of Allegheny County. Much of the hoopla surrounding the new mobility technology is credited to the demand from those between the age of 25 and 35, the so-called tion access tools with Uber; better “There are reductions today that can Millennials. This generation is larger ride-sharing services like Zipcar or get us below a one-to-one [ratio] than any that came before it and is other services like that; other forms but looking at parking requirements therefore quite powerful; however, of transportation to make it safer to is absolutely something we have to there are also a number of myths use in all seasons. People will bundle do,” Gastil acknowledges. “The only about Millennials that are proving to up and ride their bike if they have a way to look seriously at reducing be unfounded. Research is showing safe thoroughfare. I think the mayor parking is to increase other options. that Millennial-aged workers have an is on the right track.” There is ride sharing, more bike equal interest in collaborating and service and more robust and nimble private space as previous genera- Guy reports that when the Hot Metal transit service. But Pittsburgh is not tions. They expect life to be different Flats opened in 2015, demand per where other cities are with that. It’s from their parents’ life, just like any bedroom for leased parking spaces just a little too early.” previous generation. Where the Mil- was about 90 percent. One year later lennials are truly different – and this The Yards is seeing less than half Density and Urbanization is relevant to the topic of mobility that level of demand. and density – is in their expectations What started a decade ago as New for how technology will enhance “I would have rather taken those Urbanism has morphed into a mea- their lives. excess dollars that had no value surable societal shift. New Urbanism

14 DEVELOPINGPITTSBURGH | Fall 2016 FEATURE

Young adults expect information to “Particularly among young people sprawl” can have on real estate. be at their fingertips, in part because there is a push for better mass Baltimore is home to numerous major it always has been for them. The transit, for getting around in a more corporate campuses because of its technology they own defines them in sustainable way,” says Rich Fitzger- beltway connections to Washington, the way that a car defined the Baby ald, Allegheny County executive. DC and the suburbs, but campuses Boomers in the 1960s and 1970s. “Young people want to see transit that aren’t located near Baltimore’s So it’s no surprise that young adults without cars.” Metro rail system are now being would more readily adopt technology hollowed out. in the form of ride sharing or multi- “Increased population density is modal transit commuting to replace good for us and our environment. It is becoming increasingly clear that the reliance on cars. As a practical We have more leisure time, more the draw of city living is attractive to matter, cities are where these forms socialization, a shorter commute, use young talent in all walks of life and

of transit developed first. Moreover, less energy and resources. It pre- that’s having an interesting effect the adoption of this kind of technol- serves open space to be enjoyed in on employers. In growing numbers, ogy and the other conveniences of a natural state,” asserts Tim Inglis, companies are moving back to cities high-density living also allow for CEO of the Colcom foundation. from the suburbs because the talent a more sustainable lifestyle. And “Greater density is certainly possible they want to attract wants to live that’s appealing to Millennials in a and desirable in a stable, no-growth there. What Millennials have shown way that it wasn’t to older genera- or slow-growth region. Think of it as to be different from other generations. Because of their education, reverse sprawl.” tions is that they are willing to live young adults see sustainability as an where they want until they find a important virtue. You only need to look as far as Balti- job there, rather than the other way more to see the impact that “reverse around.

www.developingpittsburgh.com 15 Colliers International | Pittsburgh FEATURE specializes in adding value to our clients to accelerate their success. If you consider that the U.S. economy has shifted from a manufacturing base, which was built upon huge fixed real estate assets, to a service or information base, that attitude shift makes sense too. Manufacturing plants and big headquarters were magnets for hiring. Workers went to where the jobs were. Today, jobs are going where the workers are. As Boom- ers retire and Millennials become the worker being pursued, it follows that companies will chase the talent.

There isn’t much data to support Commercial Real Estate Sales and Leasing Services this movement yet, but there > Real Estate Management > Valuation and Advisory are plenty of anecdotes. In June, McDonalds moved its corporate > Corporate Solutions > Investment headquarters from the suburbs > Sustainability > Auctions into downtown Chicago. In late August, General Electric moved 412 321 4200 | www.colliers.com | @PghCRE into center city Boston from a 70- Learn how we are living our values of service, expertise, acre campus in Fairfield, CT. Wells community and fun at www.colliersinternationalpittsburgh.com Fargo recently reported on conditions in North Carolina and noted that almost 500,000 square feet of new construction in downtown Charlotte was being built to suit for two technology companies located outside of the city. In Raleigh, three companies from suburban locations – two from the vaunted Research Triangle Park – were moving to its downtown, absorbing more than 600,000 square feet of office space.

Perhaps the most compelling anecdote comes from Motorola Solutions, which moved its headquarters from Schaumburg, IL into downtown Chicago on August 15. Motorola’s CEO, Greg Brown said it was clear that his employees – and Motorola’s customers – weren’t interested in coming to an office an hour outside the energy and vibrancy of Chicago. Here in Pittsburgh, one of the driving motives behind Kennametal’s plans for a Pittsburgh headquarters was the difficulty of attracting talent to Latrobe, PA.

“Talent doesn’t want to sit in traffic for an hour on the Parkway or in a tunnel,” Fitzgerald notes.

16 DEVELOPINGPITTSBURGH | Fall 2016 “Today’s talented workforce wants to get where they want, how they want.”

“Fifteen years ago talent attraction would have been one of the factors we’d consider in locating. Now it’s the top factor,” says Dan Adamski, managing director of JLL’s tenant representative group in Pittsburgh. “I’m working right now with a couple of suburban clients who are locating in Down- town or extended Downtown.”

What Could Happen in Pittsburgh

Every three years, the Allegheny Conference conducts an extensive year-long outreach to identify the problems that should be addressed in its next three-year strategic plan. In 2014, those sessions yielded three major concerns that are the cornerstones of the work the Conference will do from 2015 to 2017. Workforce development was the overwhelming issue raised by businesses. Infrastructure was one of the other two. In many ways these two issues are related.

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www.developingpittsburgh.com 17 FEATURE

Photo by Port Authority of Allegheny County.

With a society that is looking McLaughlin points out that the dence that the employment patterns increasingly towards cities, perhaps limited transit options also limit the in Pittsburgh are changing at the driven by the younger generation, options of companies located Down- same time as transportation is employers in those suburban quad- town. Employers with a significant evolving. If moving back into the rants can become more isolated number of workers who use public CBD becomes a permanent shift, so from the workforce. That’s an issue transportation face the real possibil- too seems to be the shift in where that leaders want to see addressed, ity of losing many of those workers people will work in the East End so that all parts of the region can if the company relocates out of the of town. The research being done benefit from the improvements in CBD. At the same time, a Downtown at Carnegie Mellon and Pitt are the regional economy. location may be the only one that spinning out new businesses and allows an employer to recruit from opportunities at a rate that has far “Historically, Pittsburgh has been all corners of the metropolitan area. exceeded the capacity of Oakland’s able to get around having good real estate. Walnut Capital proved at transit because people drive,” “If you do an analysis of employees Bakery Square that East Liberty could notes Gerald McLaughlin, manag- working Downtown you find that be a relief valve for Oakland. More ing executive director at Newmark they live 360 degrees from the cen- recently, the RIDC in Lawrenceville Grubb Knight Frank. “Because of ter of town,” McLaughlin reports. “If and Oxford Development at 3 Cross- how limited our transit system is, we you look at the suburbs, employees ings in the Strip District showed that have more people driving than we live near their workplace or at least high-tech companies can connect should. In the suburbs, public transit on that side of the tunnel or river.” with Oakland while not locating virtually doesn’t exist.” It’s something of a happy coinci- there. But for an optimal future

18 DEVELOPINGPITTSBURGH | Fall 2016 Looking for Commercial Space in Beaver County? Call Avison Young Commercial Real Estate 11 miles 602 Morris St. Darlington, PA Industrial Space 40 acre site For Sale solution, mobility planners would do well to look at making those 5 miles th connections easier. 850 4 Ave. New Brighton, PA “Companies want to be on those Office Space campuses to be close to the peo- + 13,800 sf For Sale ple who are doing the research. 5 miles Extending the Martin Luther King 800 5th Ave. Busway and connecting to Law- New Brighton, PA renceville and down to Almono Flex Space will be huge for our region,” says + 38,000 sf For Sale Fitzgerald. “The value we have in this region is in our universities. Proposed Cracker 3.5 miles Carnegie Mellon has turned out 350 Kentucky Ave. about 40 companies a year.” Rochester, PA Industrial Space Fitzgerald also still advocates for + 24,500 sf For Sale the Bus Rapid Transit system to connect Oakland and Downtown. He likes the funding environment of 2016 better than in past, 4 PPG Place | Suite 300 | Pittsburgh, PA 15222 | T 412.944.2130

www.developingpittsburgh.com 19 FEATURE

noting that politicians aren’t signing tion,” says Dobbins-Bucklad. “If you • Reducing congestion pledges to not raise taxes. can start there and add in more and • Connecting to jobs and more specific insights and expert education “I believe we’re going to see wealth information and work that’s been created, a lot of value added to done before, you get to a picture of “It was really interesting just properties, particularly along Fifth what we want it to look like if we how much alignment in patterns and Forbes Avenue,” he continues. move past the status quo.” did emerge. We were hoping that “We’ve seen that happen in other patterns would emerge because cities and there’s a way to make that In its survey RTA asked organiza- that would be a basis for shared happen in Pittsburgh.” tions, rather than individuals, to conversations but we didn’t know,” report on what the issues facing observes Dobbins-Bucklad. Solving the question of what a their constituents were. Hoping to regional transportation system avoid complaints about bus tardiness The RTA will present a summary of of the future will look like is an or suggestions of hovercraft on the priorities – based on the input that overwhelming prospect. In addition rivers, RTA expected the organiza- RTA received - to the public by the to the workforce mobility issue, tions to understand their local needs end of 2016. Calling it version 1.0 there are issues of economic equity, and to communicate a more collec- because they know it will change, technology, regional inclusion, tive set of concerns. the RTA intends to feed back to multi-modal mix, funding and a the same audience the priorities it myriad of variables. Hoping to take “Everybody is a transportation provided and ask what do you think? the right first steps, the Allegheny expert because everybody deals with Conference is following Pittsburgh’s transportation. What we asked was “What we do know is that things playbook for past successes by what was the biggest transportation won’t change unless there’s a com- creating a broad-based group that is problem that their group or con- munity interest and excitement and reaching out to the widest possible stituency faced,” says Zapinski. The a will to change things,” emphasizes audience of residents. That group is survey also asked why that was the Zapinski. “What that change looks the Regional Transportation Alliance problem raised. like and how it will play out I have (RTA), which is led at the Conference no idea. That’s around the next cor- by Ken Zapinski senior vice president “People tend to think about trans- ner but no change takes place unless energy and infrastructure, and portation as a project, the thing you you have an engaged community Carly Dobbins-Bucklad senior policy build, the thing you change,” says that’s motivated to action.” analyst. Dobbins-Bucklad. “What we wanted out of this was ‘why?’ What is the Technology, density and connectivity Kicked off in the fall of 2015, the underlying problem?” are driving new realities in mobility. RTA is loosely based on the South- While what’s around the next corner western PA Growth Alliance, which Responses came in that could be isn’t known, it’s possible to con- had been successful in Harrisburg at categorized into four main areas of sider what a more-connected future raising issues facing economic devel- concern. Among the thousands of Pittsburgh would look like. Architect opment in the ten counties. Like the comments there was a focus on 17 Chip Desmone is one who thinks the Growth Alliance, the RTA has one priorities to address in those four uncertainty of the future liberates private-sector and one public-sector main categories. Six of those priori- the planning process. representative from all ten counties ties stood out as being concerns that and the City of Pittsburgh. were more urgent than the others. “Cities with big ideas get rewarded. It was interesting the half of the In other cities where they have To start the information-gathering six top priorities dealt with making thought holistically about transit and process the RTA created the Imagine Pittsburgh better for the future. Only connections, it’s been critical to new Transportation Crowd Sourcing Ini- one dealt with basic needs. Creating development,” Desmone says. He tiative, a survey of 23 stakeholders additional public transportation was wants to see planners think beyond groups and 800 organizations. The the suggested solution that was the immediately practical. “If what key was to elicit answers that would mentioned most often. we have is better marketed, that be representative and comparable. will be helpful but what we have Crowd sourcing took six months to The six top priorities are: is completely average. We can do ensure that there were adequate • Want multiple mobility better.” responses to represent everyone. options DP • Guide future “The only way this would be suc- development cessful long-term is if you start by • Attractiveness/ asking broadly what people think competitiveness are the biggest problems and what • Reliability and ease they want to see done in transporta- of use

20 DEVELOPINGPITTSBURGH | Fall 2016

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As part of the $15 million TIGER grant, new pedestrian structures were built that connect East Busway riders directly to Shadyside or East Liberty by access through Eastside Bond.

a seam between East Liberty and designed to be at ground level for Eastside Bond Shadyside that existed since the two different streets in Phase II. The public housing high-rises and the retail on the upper level at Penn Apartments East Busway were built. It’s why the Avenue was ground level on High- project was always referred to as a land Avenue and faced intentionally he Eastside “zipper” development. In fact, the towards the Shadyside neighborhood Bond apart- apartments were named Bond be- that had been cut off before. ments are the cause the developer saw the project final piece of re-bonding the two communities. That the vision succeeded as it did a fifteen-year opened the eyes of public agencies, odyssey of A check of the Mosites Company’s making Mosites successful in at- constructionT that began with the website reveals that the Eastside tracting more grants as it proposed landmark inking of a deal to bring Bond project was originally slated grander ideas for the neighborhood. Whole Foods to Pittsburgh and end- to be Eastside Phase III. After con- ed with a transformed community. struction was completed on Whole “If you posed the question of 'vi- Foods in 2002 and the adjacent sion' to The Mosites Company after Eastside’s origins go back further retail in 2007 – Phases I and II – the each phase of our Eastside develop- than the Whole Foods deal in 2001, third phase was envisioned as ment you may have gotten a differ- of course. Even today, those involved office space. But several factors ent response,” says Mosites. “Look- with the project recall that it was as intervened. One factor was a global ing back, each phase of Eastside was much about a vision for the rebirth economic downturn but another approached as a collaborative design of East Liberty as it was about com- was that the success of the first two driven process of discovery, with mercial real estate. Eastside was phases had created some credibility an overarching search for ‘spatial going to be a multi-phased patient for Mosites Company. The developer magic’ and better neighborhood development and developer Steve had adopted an unorthodox strategy connections.” Mosites saw the project repairing of building two-story retail that was

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24 DEVELOPINGPITTSBURGH | Fall 2016 “Our story had gotten bigger. We and got us through to the Target the top stores in the country, the had more gravity,” is how Mark store,” he recalls. “We got Business notion that East Liberty was a fringe Minnerly, director of real estate for in Our Sites funding, which was a area was dispelled. Mosites Company, puts it. combination of grants and loans that were patient and had no interest. It Mosites had skipped Phase 3 because Mosites would need all the gravity gave us the ability to leverage our it could not rationalize the transit it could muster over the next few funds with lenders to do land accu- piece of the project in an office years. Part of Phase III was a plan to mulation at a time when commercial development. Working with the City incorporate the former bus station real estate was crashing and no one of Pittsburgh and the Port Authority and Port Authority transit stops wanted to do deals.” of Allegheny County (PAT), Mosites along the East Busway in the project. decided to pursue a Transportation But melding transit into the master It was in the midst of that commer- Investment Generating Economic plan was not making sense, either cial real estate collapse that Target Recovery (TIGER) grant to build a economically or to the vision of the announced it had chosen Eastside new multi-modal transit station. It development. The cost of a transit- as the location for a new two-story was a very complex project that was oriented component to the project store, to be located at the corner going to involve city, county, state was out of line but the project was of Penn and Highland. That parcel and federal agencies in a private, attracting public subsidy to help was initially planned to be the final mostly residential development. The with development. Minnerly says phase of Eastside but developing concept resonated well with PAT, those funds probably made the dif- the Target store was a long-awaited which was trying to be creative in ference in the project. opportunity that came at the right increasing its ridership. time. Roughly two years later, when “Those state funding partners Target opened in 2011, Mosites “Eastside was a trade of land for were critical. The DCED (Depart- Company was in the process of the rebuilding of the station and ment of Economic and Community trying to make the remaining phase the construction of the pedestrian Development) funding was extremely of Eastside work by pursuing an walkway and site amenities,” ex- influential because it allowed us ambitious program of residential and plains Ellen McLean, CEO of the Port not to take the first deal that came transit development. And as Target’s Authority. “The Mosites people are along. That gave us the time to think sales soared, performing as well as extraordinary in their progressive

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www.developingpittsburgh.com 25 thinking this way. Not everybody thinks this way in terms of transit.”

Beginning with the TIGER II round of funding, Mosites submitted an unsuccessful application in 2010 and then Celebrate your career by suffered the same fate in 2011 with TIGER III. In 2012, the company prepared to submit another application for joining CREW! TIGER IV. “We decided we were going to try one more time,” recalls Minnerly. “Time is your friend if you can afford to buy it.”

This time the effort hit pay dirt, as Pittsburgh’s application was accepted for a $15 million TIGER grant in June of 2012. With matching funds from the city and PennDOT, the TIGER grant would kick start the project and cover $34 million in costs for the East Busway Transit Center.

In addition to landing the TIGER grant, Eastside’s See how CREW can enrich your partners were able to have the area surrounding the development declared a Transit Revitalization Invest- personal knowledge & network. ment District (TRID). The TRID designation qualified the AND have fun! project to receive a portion of the state taxes collected for the district to reinvest in infrastructure. The enabling legislation passed the PA legislature in 2004 but the In addition to luncheon panels and net- regulations surrounding the TRID process were daunting working events, we have special events at enough that Eastside was the first functioning TRID. great Pittsburgh locations: Mosites Company had been exceptionally creative in The Fairmont Hotel, The Priory, assembling public redevelopment assistance that would Seven Springs, Bird’s Foot Golf Club, and help fund the project but the complexity that accompa- Paint Monkey to name a few. nied those grants was unprecedented for the developer. The mingling of federal money into the project meant that Mosites would have to procure at least part of the project through public bidding, a process the principals didn’t favor. The nature of the TIGER grant also meant that a transit center that would serve multiple users would be delivered in multiple steps.

Beyond the overlapping of public and private funding, the project also overlapped physically and that was a source of some of the complication. The TIGER grant covered the construction of the East Liberty Transit Center, a multi-modal station that replaced the PAT East Busway station and connected the busway to East Liberty proper. Part of that center construction was a 520-car parking garage that was above the grade of the busway but would be sub grade for the street level of Interested? the apartments. The garage is not intended for multi- modal transit use, however. It is designed to support the Contact our Membership Director, Jessica apartments and the needs of the community. Mosites Jarosz at [email protected] or Company’s private investment is the vertical portion of our President, Michele Allerton at the project but it begins with the responsibility for the top of the garage. Confused? Wait until you hear about [email protected] the paperwork.

“We worked with the Port Authority and the URA (Ur- ban Redevelopment Authority) to construct the station on behalf of the Port Authority,” explains Chris Minner- ly, project manager at Mosites Company. “The URA held

26 DEVELOPINGPITTSBURGH | Fall 2016 the construction contracts for the Mark Minnerly says that the contrac- few blocks east and Oakland was less station. Portions of the garage were tor and URA played key roles in keep- than 15 blocks to the west. Apart- conceived as public infrastructure. ing the project in compliance with ments seemed to be a better fit than The garage was built as part of the the federal and state regulations for the office over retail of the original Mosites Company project scope and the various grants that were involved. plan. the public infrastructure was layered on that construction and became part “PJ Dick was extremely valuable “If you looked at the market, at of the TIGER grant. to us because they had knowledge least in the East End, there was still of government procurement and enough demand [for apartments], “What we really built with that procedures,” he says. “The URA was even with the other projects our col- infrastructure was the lid of the a make or break factor. There were a leagues were developing. In a way we garage, a public right-of-way that few individuals at the URA who made were all developing different things,” acts as a public street on top of the it their business to learn the require- explains Mark Minnerly. garage, and the sidewalks and plazas ments so that we could nail it down.’ that help make the connection to the “The big leap was looking at the site communities of Shadyside and East The use of the vertical construction as four acres of urban fabric instead Liberty,” he continues. that followed the completion of the of four acres of retail,” he continues. transit center in 2015 changed after “We could look at the property to It was fortunate that the URA was the recession. By the time that the ask what value-adding product the able to package the transit center TIGER grant was won and construc- upper floors should be. At the time and the garage together when it put tion on the infrastructure started, the market was screaming market the project out to bid, awarding a other developers had undertaken rate housing and Wall Street wanted $34 million contract to PJ Dick Inc. in projects in the neighborhood. Walnut nothing to do with spec office.” October 2013. As the construction of Capital’s Walnut on Highland opened the East Liberty Transit Center pro- in 2013, shortly after East Liberty By the time that the financing for ceeded, the Mosites Company began Place. Dozens of restaurants had the apartments was being finalized, to work with PJ Dick on the develop- opened. Two boutique hotels were Mosites Company had assembled an ment of the private apartments that under construction. Bakery Square’s equally complex capital stack. Two would follow. booming employer base was just a different tranches of New Market Tax

www.developingpittsburgh.com 27 The new street created above the parking garage completes the urban connection between Eastside’s retail west of Highland Avenue and the Centre Avenue intersection at the Target store.

Credits added to the equity in the of commercial real estate for Hun- reconnecting one of Pennsylvania’s project. There was plenty of appetite tington Bank. “It’s a real monument most vibrant communities with the for the tax credits on the first $23 to the development of East Liberty.” rest of a revitalized economy. million tranche and a second tranche of $14 million was raised. Private Mosites Company partnered with “A good developer never works debt of $72 million came from Hun- Morgan Communities on the apart- alone. We have been lucky to work tington Bank as the lead lender, with ments. The Rochester, NY-based in partnership with many design and participation from PNC, First Com- developer and apartment operator development luminaries over the monwealth Bank and First National entered the Pittsburgh market a few years, including Rob Stephany, Ernie Bank. Mark Minnerly marvels at the years earlier and had assembled an Hogan, Skip Schwab, Maelene Myers, difference 15 years made. impressive portfolio of properties. Bill Kolano, Hank Beukema, Dave The Design Collective from Baltimore Gibson, Tom Murphy, Bill Peduto, “When we did Whole Foods, it was designed the 360-unit property, Kevin Acklin, Dan Gilman, Rich a five million dollar deal. The bank which includes amenities like a salt- Fitzgerald, the URA and many others only had two million and they were water pool, outdoor grilling areas, leading the East Liberty revitaliza- nervous about that,” he chuckles. theater, a dog-washing station, tion,” observes Steve Mosites. “Soon health and wellness center and a we will complete the final elements The path Mosites Company took to yoga studio. of Eastside Bond - The Mews and deliver the final phase gave the mar- the East Plaza - a true public space ket a head start on the apartment The final phases of the Eastside connecting and bonding Shadyside, “boom” in Pittsburgh. Bank under- Bond apartments are being com- transit and East Liberty. We hope tt writers had begun to get a little pleted and lease up of the available will be a gathering place for many cautious about apartment projects apartments is ahead of pro forma. years to come.” by late 2014 but there seems to have More than 60 percent of the apart- DP been faith in the Eastside brand. ments are leased at rents that range from $2.40 per square foot to $2.65 “We had a pretty good feeling per square foot. about the demand for that product, and Steve Mosites had such a great Eastside Bond wraps up almost two vision, such great details,” recalls decades of planning and building David Tetrick, senior vice president that played a significant role in

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The Bentley, located at the top of Greentree Hill, will serve as the new headquarters for Burns & Scalo Real Estate Services. Image by LDA+ Architecture & Interior Design.

That project included 486,000 Burns & Scalo square feet of office space, kicked off by construction of a Real Estate build-to-suit new headquarters for Ansys Inc. A second spec office was Services built concurrent to the Ansys headquarters, along with a third spec hen asked handful of buildings in Southpointe building started a year later. That about his during the 1990s, BSRES kept its project became a de facto build-to- company’s powder dry ahead of the financial suit almost immediately when Rice history, crisis. The company took on projects Energy signed a deal to take the Jim Scalo that were out of its sweet spot – like entire building. Zenith Ridge is es- initially the Brix 26 apartments in South sentially full in mid-2016. demurs. TheW CEO of Burns & Scalo Side – during the downturn because Real Estate Services (BSRES), Scalo multi-family was one of the few During the Zenith Ridge project, the prefers to look at what his company products that could be developed in company also built a spec 60,000 has yet to accomplish. the early 2010s. But over the past square foot office building in the three years, BSRES has returned to RIDC Park West. That building, “I’m more of a future guy,” Scalo its core business and prospered. called the Concord, is now home to says. “I never like to talk about the global architectural/engineering firm past because it’s immaterial.” The marquee development of this CH2M. The company also bought streak was its Zenith Ridge project, two troubled business parks, Abele Burns & Scalo Real Estate Services is a three-building office complex Business Park in South Fayette Town- in the middle of a hot streak. After a perched on the southern-most ridge ship and Cedar Ridge in Robinson strong run of developing a in the Southpointe II development. Township.

www.developingpittsburgh.com 31 With news of a final investment de- an affinity for real estate and started “We’re a highly-disciplined firm now cision by Shell Chemicals to build its working there during the summers in with strong financial management. I cracker plant in Monaca and dozens college,” recounts Jim Scalo. “Duke would put our financial management of big users in the market, BSRES Burns had a brother that handled the team up against anybody’s. And I has stepped up its activity to another business and I guess you could say I say that because I get to see a lot level. Putting Jim Scalo’s motto to replaced him when I graduated.” of other company’s when we do work – “new beats old” – BSRES acquisitions.” has nearly one million square feet “What my dad and Duke did was of office projects in the works. The brilliant. They gave Jack and me Over the years, Scalo has grown company has moved the dial quite a our own thing and they gave us a into a manager who believes that bit over the past 20 years. lot of rope to hang ourselves,” he the strength of his business and the continues with a laugh. “We made a desired return for his investors – of Burns & Scalo Real Estate started lot of mistakes at their expense but which he is one – depends on his as an investment business for resi- at the same time we each grew our people. He has learned that keeping dential roofer Duke Burns and Jack business exponentially. I give them them focused on what is important Scalo, Sr. The two men began their all the credit in the world because to the company’s success, rather roofing business in 1956 and saw what we were given was a lot of than a litany of duties, is the differ- real estate as the means to their ence between operating smoothly long-term plans. and pinching pennies. That means “I’m a long-term creating processes and a culture “As they became profitable in their investor. It takes two where the success of the company trade they looked to real estate for translates into the financial success two things, retirement and tax shel- or three years to of the employees. ter,” recalls Jim Scalo. “In the 1960s really get something and 1970s they started investing in “We do one day a month where we small real estate, duplexes and some stabilized,” Scalo just review the financials on every small apartments. When I got out one of our entities. It’s a tough day,” of college in the early 1980s I went concludes. “It’s Scalo explains. “We skip a month straight into that full time to get my probably three to during budget season and January, arms around what they had. We built so it’s just ten times a year. What it up to a couple thousand units and four years if it’s a new we’re looking for in those meeting is then sold it in 1994. And that sent development. If you variance reporting. We’re looking at them into retirement.” month-to-date and year-to-date and sit in a market for that if there’s a reason to look at more That positioned Scalo to get into the long with the right detail we do. business in the way he envisioned it. Scalo and his twin brother, Jack, product, in the right “That’s also a day when the world spent lots of time at Burns & Scalo location and it’s new, stops for the company. The facilities growing up and each ended up guys come in. The leasing people are gravitating towards separate arms you’re going to score.” in. The marketing people come in of the business. Over the more and we just go from one to the next. than 30 years in business, each has It’s a day when we talk about all the grown the respective operations into opportunity. We weren’t given a lot properties. We talk about the busi- formidable enterprises. While Jim of money. That’s probably a good ness in addition to the financials. owns the real estate business wholly lesson as we now have legacy busi- So it’s not just the financials. The separate from the legacy roofing nesses and our children are getting leasing agents all have commitments business that his brother Jack owns, involved.” and we talk about where they are on the two still work together. Jack in- those commitments.” vests in many of the real estate deals Scalo also expresses gratitude for and Jim is an investor in Scalo Solar. that lack of sophistication because Scalo explains that the budgets for he realizes it made him develop his his properties are built upon those At the start of their careers, neither own philosophy about running a real leasing commitments. The success Jim nor Jack came into a business estate services company. in forecasting those budgets means that they would recognize today. Jim the difference between running ac- Scalo remembers that while the real “What we weren’t given was a lot of cording to plan and cutting expenses estate business was not sophisti- guidance. My dad and Burns weren’t to make plan. Scalo is committed cated in any way, the opportunity he real estate pros. They never spent a to planning and making plan for was provided set the foundation for day in the life of a real estate man,” his investors every year. Part of the his career. he says. “They weren’t working off discipline that has been imposed of budgets. They were working off of at Burns & Scalo is that rigorous “I had worked at the roofing com- ten percent appreciation every year. commitment to plan at all levels and pany since we were little kids. I had That solved everything back then. Scalo has communicated well that

32 DEVELOPINGPITTSBURGH | Fall 2016 the key to making plan is leasing. achieved, triggers another financial tracts on one of BSRES’s construction His staff understands that leasing is incentive for the employee. All of projects or managing the project. the life blood of their business and this detail management is aimed at their activities need to support that getting all the employees working Burns & Scalo now acts as the objective. together towards the same goals. general contractor on its own Scalo says his team is rigid in judg- developments. At various times since “The facility manager knows there ing the results but the payoff for Jim Scalo took over the real estate are three fundamental priorities the individual can be thousands of business, the company has both every day: Front door policy, which dollars. acted as contractor and worked with is what does the property look like? a third-party general contractor. The condition of the vacancies; and Scalo says that both methods led to service calls,” Scalo explains. “If you successful projects but he feels more ever go through one of our vacant comfortable in the joint role of both spaces they look really good because “Every year we’re owner and contractor. The size of that manager knows that he needs looking for ways to the BSRES portfolio means that the to remove the negatives and help company regularly works with spe- that leasing agent lease that space change the plan. cialty contractors for maintenance because that’s going to affect plan. One of the things and repair work, as well as tenant And they are all incentivized.” improvements. Having that Rolodex I’m always looking of subs and adding staff with BSRES employees are included in the construction project management metrics of success for the company. at is compensation,” experience, Scalo likes the control Success for a real estate services Scalo admits. “If I it gives BSRES over schedule and company is multi-faceted. There are performance. investors whose expectations must think every day my be met and agreements met. The In the past couple of years, BSRES operations of the company need to employees are coming added an annual prequalification be profitable. Burns & Scalo’s man- to work thinking process, for which it charges ven- agement has worked diligently at dors, to its best practices for con- creating ways for the staff to be part about how to make struction management. Scalo says of the striving and the success. that some subs balked at the idea me more money I’m but that the environment which it “Every year we’re looking for ways foolish. But if I can creates works better for both BSRES to change the plan. One of the and the contractors. things I’m always looking at is put plans in place so compensation,” Scalo admits. “If I that people can think “I remind them that the process think every day my employees are keeps the unqualified competitors coming to work thinking about how about how they can from bidding. They are not going to to make me more money I’m fool- lose work to a sub that isn’t manag- ish. But if I can put plans in place make more money ing its business like they are,” he so that people can think about for themselves and it explains. how they can make more money for themselves and it aligns with aligns with corporate BSRES has grown its operating corporate goals, we both win.” business as its portfolio has grown. goals, we both win.” That business includes brokerage, Burns & Scalo created what it calls property management and develop- a performance result description in ment. In 2016, BSRES acquired a addition to a job description. Instead marketing company to help drive the of a list of tasks, BSRES employees “The point is, we want to pay this front end of the business. Although are given a list of priorities that are money out but we’re strict about its operations primarily support its set to reach key result areas. In the it because if you’re not, it doesn’t own real estate activities, BSRES will effort to move the company forward mean anything,” Scalo asserts. “It do occasional third-party projects. a little every day, Scalo sees the never really works until people start The company was recently hired to accomplishment of the high priority getting the money either. We’ve do office development services at tasks as critical to success and all been doing this about four or five the George Westinghouse Research employees have financial incentives years and it’s working really well.” Center for an outside investor. BSRES tied to those key result areas. It’s a will help with the development plan way for all BSRES staff to make an Scalo explains that the management and brokerage for a fee but will have important contribution to the com- team also looks for special projects no ownership stake in the project. pany’s success and be recognized for for its employees to earn additional those contributions. There’s also a incentives for value-adding oppor- Its portfolio is dominated by Pitts- corporate financial goal that, once tunities like buying out the subcon- burgh properties but it also includes

www.developingpittsburgh.com 33 properties in Ohio, Indiana and Township. BSRES is working through North Carolina. Scalo is bullish on the development process on more the corporate office market, espe- new construction in the RIDC Park cially the Columbus area right now. West, planning two 106,000 square foot buildings it has branded the “I would say that who we are today Boardwalk. Across the Parkway, is narrowly focused. We are an of- BSRES signed an agreement to buy fice, primarily suburban, investment the 192,000 square foot former developer. We’re not interested in GlaxoSmithKline headquarters in other product types - multi-family, Moon Township. And in the city’s retail, or hotel,” he notes. “We have Fairywood section, near Crafton, smidgens of that in our portfolio. BSRES is partnering with Franklin Today the portfolio is a little over Interiors to build a new 150,000 five million square feet. We gener- square foot office and shop; and ally develop to hold. We’re not the will be developing a second 150,000 kind of people who are IRR driven. square foot building for W. J. Beitler We’re driven by cash on cash. I be- Co. across from the Franklin Interiors Jim Scalo lieve wealth is income not liquidity. project. When I get a lot of liquidity I put it to work.” “I’m a long-term investor. It takes two or three years to really get BSRES is poised to put that liquidity something stabilized,” Scalo con- to work again on projects later this cludes. “It’s probably three to four year and into 2017. years if it’s a new development. If you sit in a market for that long Work has started on the first of with the right product, in the right two 80,000 square foot buildings, location and it’s new, you’re going called Beacon One and Two, at the to score.” Abele Business Park in South Fayette DP

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The Gas Industry is Looking Like a Comeback Kid

s the country was mired in a deep recession in 2009, energy companies were descendingA upon Southwestern PA in a frenetic build up of natural gas exploration of the Marcellus Shale formation. The drilling built over the next few years, transforming the economies of Greene and Washing- ton Counties. Economic benefits spilled over into many sectors of the region’s economy, providing construction opportunities, full hotels Supply and demand and a booming market for pickup remain out of trucks and tires. balance but events the summer of 2014. Energy production is a boom-and-bust business. As Commercial real estate benefitted are working to bring has happened through many cycles, from those early years of the Marcel- excess supply had to be absorbed lus play. Hotels and motels quickly demand higher, while before prices could stabilize at popped up to meet the demand from oversupply is absorbed. profitable levels. A failing global roustabouts and engineers from out economy kept demand low and steep of state. Southpointe II, which was Summer 2016 has been cutbacks in drilling, even in the originally set as a retail mixed-use hotter than expected. newly-explored Marcellus and Utica center, was redesigned and became formation, were the only remedy. home to a handful of new office That has boosted buildings leased by gas companies. demand for electricity, The rig count in Pennsylvania has Gas well service companies took fallen to 16 from more than 100. hundreds of small and large industri- including power Thousands of jobs have been cut al leases and sites. Fallow industrial generated by natural in the industry, which was just in parks in Washington, Greene and the beginning stages of its multi- Westmoreland Counties filled with gas. Coal use is down decade build. As could be expected, build-to-suit tenants. Towns like by one third year-over- revenues for businesses serving the Canonsburg and Waynesburg saw industry have fallen as well. empty storefronts fill up and mer- year and gas generation Trumbull Energy Services President chants prosper. Then came a steep Tim O’Brien estimates that its rev- decline in the price of oil and gas. is up ten percent. enues have declined by 80 percent Gas consumption is from the high point. Trumbull is Five years of increasing production involved in construction of well and of gas and oil from shale explora- at record high levels, midstream sites. The Ellwood Group, tion – both in the Appalachian and according to the a manufacturer of steel castings for western regions of the U.S. – cou- the oil and gas industry, reported pled with falling demand from China Energy Information that its revenues fell from $1.1 and the rest of the globe led to a Administration (EIA). billion in 2014 to a forecast of $650 steep decline in prices beginning in million for 2016.

www.developingpittsburgh.com 37 Supply and demand remain out of cryo plant in Smith Township in each. Sunoco Logistics has also balance but events are working to western Washington County. The been taking bids on packages of its bring demand higher, while oversup- processing plant is planned to have proposed Mariner West pipeline, a ply is absorbed. Summer 2016 has a 400 million cubic feet per day second distribution network that is been hotter than expected. That has capacity. ETP also plans a fraction- key to moving liquids from the Mar- boosted demand for electricity, in- ation plant in Marcus Hook, south cellus and Utica to eastern markets cluding power generated by natural of Philadelphia. Based on similar in larger quantities. gas. Coal use is down by one third investments, the cryogenic process- year-over-year and gas generation is ing plant should cost more than “Pipelines are absolutely critical. up ten percent. Gas consumption is $550 million to construct. A contract We’ve got to make sure we have at record high levels, according to for the earthwork for the plant has opportunity to use gas here,” says the Energy Information Administra- been let. Spigelmyer. “It’s a multifaceted tion (EIA). Moreover, construction is effort, making sure we’re building underway on new gas-fired power Washington County is seeing other manufacturing and using product plants in Moundsville, WV, South investments that will boost the here in PA but also having the Huntingdon Township, Lordstown, capacity to process and move gas to avenues to get it to critical consum- OH and Johnstown. Several others market. It is the inability of producing regions across the country. That are on the way. And then there are ers to get the enormous volume of means moving liquid supplies of the ethane crackers. gas extracted from Southwestern PA natural gas to Sabine Pass and over wells that is the root of the steep to the east coast to export.” “The growth of manufacturing here, discounts on the spot price that with those industries all using gas, Marcellus producers are seeing. Another encouraging sign for the that’s a huge opportunity to create gas industry has been the trend new demand,” predicts Dave Spi- EQM Gathering, part of EQT, has in drilling activity. In recent earn- gelmyer, president of the Marcellus plans for the Mako Compressor Sta- ings announcements, most of the Shale coalition. “The cracker and the tion in Amwell Township. Mark West publicly-traded producers have been power generation loads are all pretty is moving forward with the Imperial guiding expectations for drilling critical to demand and we have Land Compressor Station in Robin- higher. In his comments to analysts seen some appreciation in price. It’s son Township and expansions of the on July 28, for example, EQT’s CEO pretty logical that we’d see some Redd and Dryer stations in Robinson David Porgas noted that, “We are additional capital spending. [Spend- and Amwell respectively. Mark West getting in front of a broader industry ing] is certainly not where it was and is also expanding a Sunoco facility ramp-up.” I don’t see it going to where it was in Independence Township. These any time soon. But I do think we’ll projects represent investments of Rig counts have stabilized through- see some reinvestment of capital between $10 million and $30 million out the Marcellus and Utica foot- back in PA and that’s a good thing.” prints, albeit at diminished numbers from even earlier this year. Baker Spot prices for Marcellus gas have Hughes reported that 36 rigs were risen from around $1.30 per million working in Ohio, West Virginia and cubic feet (Mcf) to $1.90. The pros- Washington County Western PA during the last week of pect of this future demand is giving is seeing other July. That’s down from 81 in July producers a reason to invest capital of 2015 but the rig count has been in measures that will also help boost investments that will stable for the past month or so and the current low prices. boost the capacity to looks to have reached the end of a decline. Over the past few months, activity process and move gas in the midstream has surprisingly to market. It is the Even with reduced rig count, gas rebounded. In an environment that production in Pennsylvania has has been rife with retrenchment inability of producers remained fairly strong. Producers and capital budget cuts, capital to get the enormous have become significantly more expenditures on midstream facilities efficient since the early drilling six are a sign that the industry sees a volume of gas extracted or seven years ago and wells are corner turned, if not a recovery on showing flatter decline curves than the horizon. from Southwestern PA were originally expected. Four wells wells that is the root now produce what ten wells did in The largest of these investments is 2009. As a result, PA producers are the $1.5 billion being spent on the of the steep discounts on pace for five trillion cubic feet in Revolution cryogenic processing on the spot price that 2016. That’s more than one-quarter plant and gathering pipelines by of all U.S. gas production. Energy Transfer Partners (ETP). The Marcellus producers project includes 100 miles of pipe- are seeing. Reduced drilling tends to be lines, originating in Butler County reflected in reduced industries as and terminating at the Revolution much as a year later. Current stocks

38 DEVELOPINGPITTSBURGH | Fall 2016 are more than 15 percent above those a year ago and almost 19 percent higher than the five-year average. The Energy Information Agency forecasts that natural gas inventory will be 4.2 trillion in October, an all-time high. But Rice Energy’s CEO, Daniel Rice, believes that the industry has over- corrected. In his presentation to analysts in July Rice explained, “[O]ur analysis of historical state data tells us that the basin needs 50 to 55 rigs to maintain flat production. We think this lack of growth from the basin sets the stage for an improving gas market in 2017 and 2018.”

The size of the reserves in the U.S. shale forma- tions is the root of the problem. Shifting consumption demand from oil and coal to natural gas takes time. The gains in demand have been small compared to the enormous potential of the gas reserves. Demand from the crackers themselves won’t make a big dent. That’s why the build of manufacturing and power generation capacity is viewed as so important to a long-term healthy play.

Shell’s estimated production of 1.6 million tons of polyethylene will require 105,000 barrels of ethane daily as a feedstock. PTT’s cracker, when fully operational, will produce one million tons annually, meaning that the output from the crackers in the early 2020s will be fed by about 170,000 barrels of ethane each day. That’s about 6.4 Mcf of natural gas daily, a fraction of the amount of gas needed to fire the manufacturing processes of the industry that is expected to follow Shell, PTT and any other crackers. At this point, however, few seem certain about the specifics of what’s to come.

“It’s pretty early for that. When you take a look at the multiplier effect behind that kind of investment decision, I think we’ll see it,” notes Spi- gelmyer. “The fact that it’s going to take four or five years to build, I’m sure folks have those kinds of opportunities on the drawing board but I don’t think we’ve really seen what’s going to come yet by any stretch of the imagination.”

The good news is that the prospect of improvement in the gas industry from the construction of the ethane crackers is already driving activity. When asked if they had seen an uptick in business since the June 7 announcement, the reaction of professionals ranging from architects and engineers to brokers to developers is nearly unanimous in the affirmative. Even though the first polyethylene pellet won’t roll off the line until 2021, those who hope to benefit from the production don’t want to be the last in place. That sense of urgency and optimism looks to be energizing the moribund gas industry now. DP

www.developingpittsburgh.com 39 Eye on the Economy

added 292,000 new hires in June growing overhead associated with Markets don’t like and 255,000 in July, according to higher healthcare costs and rising the Bureau of Labor Statistics, which wages. U.S enjoys near full employ- uncertainty. This was well above the 175,000 consen- ment status – at least technically sus estimate. Within the report were – but that also means that worker truism seems to two noteworthy items. First, the productivity has peaked, which also categories of employment that grew pressures employer costs. Although be irrelevant to the most were higher-paying sectors hiring continues and layoffs are still like IT, education and health services declining, corporations will curtail the U.S. economy and professional services. Second adding to staff if flat or declining was the continued growth in wages. profits begin to erode the value of

thus far in 2016. Average hourly wages were 2.6 per- the company. It’s the growth in jobs cent higher year-over-year through that ultimately drives commercial ritain’s voters July. That represents healthy growth real estate. chose to leave over price inflation and a steady – if the European unspectacular – trend upward over Within the commercial real estate Union. Acts of the past year. category there are certainly signs terrorism have that the business cycle is getting taken terrible Unspectacular – perhaps disappoint- long in the tooth, or at least is tolls on a number of cities in the B ing is more accurate – is a generous reaching a point where growth will U.S., Europe and Asia. Racial strife description of gross domestic prod- be flatter in the coming quarters. has sparked protests and deaths in uct (GDP) growth. The first estimate the U.S. And the American presiden- of GDP growth for the second JLL illustrates its office market report tial campaigns promise (threaten?) quarter was reported at 1.2 percent with the use of its “Skyline Clock” to produce the most infuriating, on July 29, less than half the rate and categorizes major city markets divisive and entertaining few months forecasted by economists surveyed as rising, peaking, falling or bottom- in generations of politics. Yet the by Bloomberg. Moreover, the rate ing. At midyear, JLL placed some of reaction to all of this disruption has of growth in the first quarter was the cities with high concentrations been a collective yawn from the adjusted downward to 0.8 percent. of technology business – San Fran- U.S. consumer. Spending on durable Economists had been expecting more cisco, Austin, Denver and Seattle - as goods, vacations and consumer of a bounce back from the slow first in the peaking category. Not surpris- items remains on an upward path, quarter but the pattern of economic ing, energy-dependent Houston helping to push the U.S. economy activity makes it seem more likely was in the falling group. While New forward, even as the economies of that growth for the rest of 2016 will York, Chicago and Washington, DC much of the world struggle. remain below two percent. were the largest cities in the rising category, Pittsburgh was also classi- You could certainly make a good A look at the components of GDP fied as a rising market. argument that the U.S. consumer is growth reveals that the drag on the displaying the same hubris that he economy was business investment, More markets were in the rising or she did in 2007, just before the rather than consumer. Investment category than not but if the pace of roof caved in, but there are few – if by businesses fell by 3.2 percent hiring begins to slow further (and any – parallels between today and from April through June. That’s a hiring has already slowed by about the run-up to the financial crisis. For reflection of weak global demand, a one-third since 2015), many of those the most part, the relative calm and persistently strong dollar and more markets will see demand peak ahead optimism of the American worker is aggressive reduction of inventories. of JLL’s expectations. owed to the strength of the employ- By comparison, consumers were ment situation. Whether the measure buoyed by continued job growth, Slower job growth has also begun is car-buying or leasing office space, low inflation, slightly higher wages, to impact the multi-family sector, the underlying strength of the U.S. low interest rates and low energy although it’s worth noting that the jobs market is supporting steady – if prices. In fact, several of the key market dynamics in the multi-family unspectacular – growth. drags on business are catalysts for market are still trending upward. consumer investment. The July reports on apartment rents The June and July jobs reports showed that growth had slowed were – not surprisingly – almost Corporate earnings have been again, falling to two percent since a mirror image of the “surprise” pressured by weaker sales and July of 2015. In two of the major report on May’s hiring. Employers

40 DEVELOPINGPITTSBURGH | Fall 2016 cities in the U.S., San Francisco and New York, rents were actually off by between one and two percent. Multi-family construction reached cyclical highs in 2015 for starts, completions and permits. That level of activity suggests that the first stages of oversupply will be seen later this year. Construction starts have only fallen by about 16,000 units or 4.2 percent year-over-year through June. As the oversupplied conditions become better recognized, especially if rent growth slows or reverses, development of new multi-family projects will slow further.

In addition to the supply and demand conditions, two other factors A strong dollar, weak global economy and lower earnings are holding U.S. GDP growth down. helping with apartment development Year-end GDP growth data from Bureau of Economic Analysis. are beginning to become drags on expansion. among the youngest – and largest – demographic group in America. The first half of summer has brought Overhanging single-family in- little to indicate that consumers are ventories created by the wave of These two trends shouldn’t materi- losing confidence in their personal foreclosures from 2008 to 2010 ally impact the multi-family market economic conditions, even though have abated. In fact, the fallout in 2016 but the cyclical shift towards as many as 70 percent of the people from the mortgage crisis prevented ownership and away from renting in some surveys have expressed new developments, either because should be noticeable in 2017. dissatisfaction with the condition developers weren’t willing or financ- of the national economy or leader- ing wasn’t available. The result is a Strong consumer health is the ship. Spending for travel and dining shortage of buildable lots for at least driving factor behind strength in are up. Home values continue to the last 12 to 18 months. As might two other real estate categories. appreciate faster than the rate of be expected, that shortage was an Consumer spending growth is lifting inflation. A surprising six percent incentive for developers to step up retail enterprise overall but within drop in gasoline prices has made activity and more new construction the retail category, the explosive filling up the tank roughly 50 cents will be possible later in 2016. growth of online sellers like Amazon, per gallon cheaper than last summer. Zappos and Wayfair have driven Household and mortgage debt ratios At the same time, lenders continue strong growth in industrial construc- are lower than at any time since the to have excess liquidity and a desire tion. Large fulfillment centers, like Carter Administration. to lend. Demand for single-family the one proposed for Amazon by home ownership is pent up and with Hillwood at Chapman Westport, America in the third quarter of 2016 rents exceeding mortgage payments have driven more development and is a safe haven for investment and in many markets, mortgage demand positive absorption. The hospitality a stronger economy than most of should grow. Banks are still saddled industry is likewise seeing continued the rest of the world. In spite of with regulations that hinder their strength from individual and group unsettling headlines and political ability to make deals but there are travel. Revenue per available room rhetoric designed to inflame voters, an increasing number of programs – (RevPar) and average daily rate (ADR) the American worker and consumer particularly from Fannie and Freddie are both on a pace to experience are behaving as though he or she is – that are making first-time owner- growth in excess of five percent comfortable with his or her house- ship more accessible. Most notable in 2016. The positive metrics are hold’s conditions. That’s good news are loans with low or no down pay- pushing development of additional for the U.S. economy for now. ment required. That comes at a time supply of roughly two percent more DP when home ownership is growing capacity in 2016.

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ollowing a strong performance in the first quarter of 2016, Pitts- burgh’s office market endedF the second quarter with similar strength, boasting a vacancy rate of just 7.7 percent. The average rental rate, over all classes, finished at a solid $20.40 per square foot.

Overall, Pittsburgh’s Central Business District (CBD) posted a declining vacancy rate of 8.3 percent, down over 0.5 percent from this time last quarter. The average asking rental rate per square foot for all classes in the CBD remained steady from previous quarters reaching $23.66 per square foot. The average asking rental rate for Class “A” buildings in the CBD was just over $26.65 per square foot with Class ”B” reaching an average of $20.60 per square foot. We can expect overall rental rates in the CBD to increase due to the two large renovations underway to include: the 529,000 square foot Liberty Center and the 1,011,000 square foot One Oxford Centre. The buildings are currently quoting $33.00 and $34.00, respectively.

Similarly, Pittsburgh’s suburban office market remained strong. The end of the second quarter showed a 7.4 percent vacancy rate compared to the first quarter’s vacancy rate of 7.9 percent. The average rental rate As we pass the midpoint of 2016, million. Local investors continue to for Class “A” buildings in the subur- Pittsburgh continues to see positive demonstrate their commitment to ban office markets reached $23.43 activity in the market. One of the the region with ventures such as per square foot with Class “B” largest transactions this quarter was McKnight Realty Partners’ recent attaining rates of $19.36 per square the purchase of the 307,000 square acquisition and planned reposition- foot. Both classes demonstrated an foot Centre City Tower in the CBD ing of River Walk Corporate Centre increase from the previous quarter. by the New York-based King Pen- located in the CBD Fringe submar- Suburban submarkets, such as the guin Opportunity Fund III. Another ket (800,000+ square feet). Parkway West, have retained large major transaction involved the amounts of Class “A” inventory 18-story Arrott Building downtown, As evidenced by this quarter’s posi- providing sizeable users with options which transferred to Columbus- tive absorption of 677,809 square in the market. based Batra Realty Group for $3.0 feet, the office market continues to

www.developingpittsburgh.com 43 Source: CoStar Office Report, Q2 Pittsburgh Office Market, Colliers International

strengthen. Thanks to local and na- Pittsburgh region maintains move- **CoStar defines the Suburban mar- tional investors as well as companies ment and national interest that has ket as including all office inventory like Oculus (Facebook) and Uber, the long been absent since our days of not located in the CBD. earning the title of Steel City. We ***Office statistics include office can expect this high level of interest condominiums, office loft, office This has created and activity to carry forward into the medical, all classes and all sizes, and next quarter. both multi-tenant and single-tenant a fertile business buildings, including owner-occupied environment for All information in this report is pro- buildings. vided on an “as reported” basis from ****All rental rates have been con- startups. Not just data reported by CoStar in its 2Q verted to a full service equivalent. limited to the tech Office Report as of July 11, 2016. Colliers International | Pittsburgh has Co-Working Space: The Nest Before used reasonable care in preparing industry, Forbes The Flight the information included in this Magazine declares report, but makes no representation Pittsburgh, a city historically known regarding the completeness, accu- that there is an for its blue-collar mentality and rich racy, or timeliness of any information industrial history, is going through a increasingly diverse or that such information and data renaissance. This time, it is emerging will be error-free. cross-section of as a city rich in intellectual capital and technological advancement. individuals leaving Alexis Wilkerson, Associate larger organizations The drivers of Pittsburgh’s economy *CoStar characterizes the CBD to venture out on (Central Business District) as a high have consistently been “meds, techs, density, well organized core within eds and finance.” As of late, the their own and create the largest city of a given MSA, this Technology Sector has taken a no- businesses. case being the City of Pittsburgh. ticeable lead. This lead is attributed to the innovation emanating from

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www.developingpittsburgh.com 45 stated, “co-working space allows for collaboration and free thinking. It provides an exciting atmosphere to stay motivated and focused on growing young companies. The benefit of being in spaces like Alloy 26 is that companies can feed off each other.”

Due to the emergence of startups in the City of Pittsburgh, large co-working space corporations like WeWork and Industrious are rumored to currently be searching in the Cen- tral Business District for office space in the 20,000 to 30,000 square foot range. This presence could serve as a benefit to the city in other ways as well. Naturally, if companies such as WeWork or Industrious leased space in the CBD, that would bring more startups to the CBD as well. That, in turn, would entice the employees of these startups to potentially look Downtown and in the Fringe for residence. As our CBD continues to evolve through resurgence and create a new identity for itself (mainly that it’s livable), this would definitely (From left) Maria Hanson, Mamadou Balde, David Thor and Patrick Sentner. create a bigger buzz and bring even more life to our CBD after work hours. the two largest universities in the and Alloy 26. These co-working city; Carnegie Mellon University and spaces usually provide a large open This is an exciting time in our city The University of Pittsburgh. With layout with some designated offices as technology continues to advance innovation comes ideas and with and breakaway, conference and and new companies are formed. ideas comes enterprise. This has cre- quiet rooms. Essentially, anything Co-working space nurtures these ated a fertile business environment a startup needs is contained within new and developing companies for startups. Not just limited to the space. until they are established and ready the tech industry, Forbes Magazine to stand alone. The fact that such declares that there is an increasingly The benefits of co-working space are notable co-working developers such diverse cross-section of individuals many; the most apparent being cost as WeWork and Industrious are seek- leaving larger organizations to savings. Unlike traditional office ing to establish offices in Pittsburgh venture out on their own and create spaces, lease rates are determined further substantiates the city’s grow- businesses. by the number of desks or offices ing national reputation as a hub for and frequency of visits, instead of technology and innovation. One thing every business needs the square footage. Rent at these is space for work. This space can spaces can cost you less than a cup Mamadou Baldé Esq. Vice President be a home office, coffee shop or of coffee a day and provide you with & In-House Counsel conventional office building. The the necessary space and resources. newcomer to this list of preferences In addition, the tenants in the co- Colliers International is “co-working space.” working spaces are not obligated or Two Gateway Center held to the traditional long-term of- 603 Stanwix Street, Suite 125 The idea of co-working space, in fice leases. Furthermore, the culture Pittsburgh PA 15222 Pittsburgh specifically, began before is one that epitomizes the millennial 412-321-4200 the term was coined. Dale McNutt’s generation; laid back and care-free. Patrick Sentner StartUptown has been in existence This means no shirt and tie; rather Founder since 2006 and is still going strong. flip-flops and t-shirts. [email protected] Since then, other spaces have DP popped up, including Beauty Shop- As Alloy 26 tenant and Digital pe, Innovation Works, Revv Oakland Dream Labs CEO Jacob Hanchar

46 DEVELOPINGPITTSBURGH | Fall 2016

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n a national paired well with an economy that will hopefully even out with the level, the has continued to add jobs, which is pent up demand that exists out in warehouse creating consumer confidence and the market. This was reflected in a and manu- in turn, has increased consumer recent transaction that was final- facturing spending. This will continue to ized between Berlin Packaging and markets stack up the demand for warehouse Neyer in July prior to the develop- are creatingO a lot of positive press. and manufacturing space in quar- ment of Clinton Commerce Center Absorption numbers are setting ters to come. being completed. After scouring record levels compared to other the market for a couple of years, recovery and expansion phases. On a local level, Pittsburgh’s mes- Berlin finally executed a deal for Overall vacancy is the lowest it has sage is very similar. Absorption and 150,000 square feet of the 252,000 been since the Great Recession, vacancy remain stable for ware- square foot speculative warehouse and in some instances statisticians house space and were impacted building with a plan to expand by are saying that it is the lowest it only slightly when American Eagle an additional 150,000 square foot has been in 30 years. E-commerce vacated the 440,000 square foot within a year of occupancy. has played a big part in this shift distribution center in Warrendale. because of the increase in online However, it seems that when the The so-called Amazon effect has sales versus that of retail stores. building was acquired in January played a big role in driving new This so called “Amazon effect” by McKnight Realty, leasing inter- demand for warehouse space in has impacted the way each one of est has been continuous with the Southwestern Pennsylvania and us shops and demands goods. We belief that a few 100,000 square the market is seeing much larger live in a society where most of us foot – 150,000 square foot deals requirements because of it. At the cringe at the thought of waiting will be signed in the near future. end of July, the Pittsburgh Business longer than two days for a package As the roughly 700,000 square Times announced that Hillwood – let alone leaving the house to feet of speculative development is obtaining approvals to build a wait in a potential traffic jam that continues going vertical in the million square foot warehouse out will lead us to an unpredictable Parkway West/Airport corridor, by the Pittsburgh International line at a store. This new trend has vacancy levels might increase, but Airport. The only reason a million

www.developingpittsburgh.com 49 Over time, and closer to construction commencement in 2018, the market will see an increased demand for industrial space, especially for properties that are serviced by barge and rail. If the tri-state area is fortunate enough to obtain multiple cracker plants, it is likely that the market will see manufacturers of the plastics and compounds move closer to the region as well.

trying to figure out how to accommodate new delivery demands. This trend has even impacted companies that distribute specifically to Southwestern Pennsylvania in that they need to be as close to the city as possible in order to efficiently distribute around the region with the antiquated “hub and spoke” state road network. With a lack of land available for warehouse development, paired with new zoning regulations that could make warehouse development around the city more difficult (Riverfront Interim Planning Overlay District), some of these companies are also looking for smaller hubs in areas that do not have convenient access. (Monroeville is a good example.)

This demand for space also exists in Southwestern Pennsylvania’s industrial and manufacturing sector. Examples are seen with the recent square foot warehouse building searches for requirements ranging acquisitions completed by Westing- would locate in Southwestern from 300,000 to 500,000 square house Plasma and Retal Industries. Pennsylvania is due to a shift in feet or more have taken place and Westinghouse Plasma acquired 221 shipping patterns. Preliminary it is believed these users are also Westec Drive in New Stanton in or-

50 DEVELOPINGPITTSBURGH | Fall 2016 der to support the growing demand to obtain multiple cracker plants, of their technology that is used to it is likely that the market will see convert waste into energy. Retal manufacturers of the plastics and Industries expanded into the United compounds move closer to the States through an acquisition of a region as well. 150,000 square foot manufacturing building in Donora where they plan With the ongoing expansion of on manufacturing polyethylene for Google, Uber and other related the packaging industry. technology firms, the region will continue to see an influx of The oil and gas industry has been companies that feed off the same around Southwestern Pennsylvania talent pool. The Strip District, for many years. However, Shell’s Lawrenceville and Oakland are the announcement to proceed with demanded location for these firms, the development of a cracker plant and are experiencing a transforma- on the former Horsehead site in tion because of it. Only time will Monaca has created an entire new tell how this trend will mature and Amy Broadhurst industry of its own. It has already come to impact the market. spurred a flurry of investment activity in the immediate market. Amy Broadhurst (Brocato), CCIM Over time, and closer to construc- Vice President tion commencement in 2018, Hanna Langholz Wilson Ellis the market will see an increased One PPG Place | Suite 1640 demand for industrial space, Pittsburgh, PA 15222 especially for properties that are 412-261-7115 serviced by barge and rail. If the [email protected] tri-state area is fortunate enough www.HannaLWE.com DP

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Equal Housing Lender. Member FDIC.ome Copyright eight © 2012, Dollar Bank, FederalU.S. Savings even Bank. more attractive for park- that a rebound from the winter BUS037_12 years removed ing cash. Several Eurozone central slowdown had been completed. from the fall banks are currently offering negative Pointing to continued improvements of 2008, when interest rates and the uncertainty of in the labor markets, steady gross lending came how and when Great Britain will exit domestic product (GDP) growth and BUS037_12.indd 1 2/14/12 11:08 AM to a complete makes the low-yielding U.S. Treasury low inflation, the FOMC hinted that standstill, Sthe capital markets in bonds seem quite healthy in com- it would look to September for the 2016 are marked by excess liquidity, parison. Demand for Treasuries has next upward signal in rates. The strong commercial real estate funda- pushed prices up and yields down FOMC also left the door open to mentals, few signs of overbuilding or since the Brexit vote, driving rates take action in response to what it economic recession and a consumer for medium- and long-term debt called “readings on financial and balance sheet that is as strong as it lower still. international developments.” has been in more than 40 years. The markets are also marked by ultra-low “Events like the Brexit have actu- Most observers saw this provision interest rates, a burdensome regula- ally helped our market because the as a safety valve, leaving the Fed to tory environment (which accounts U.S. is that much more attractive keep rates lower should U.S. GDP for some of the liquidity) and an to investors,” says Mark Popovich, growth slow or global markets face extraordinarily weak global economy. senior managing director for HFF in further disruption. Given that any For all the background noise in the Pittsburgh. change in rates by the Fed should be markets, the outlook for lending and no more than 25 basis points (bps), borrowing in the U.S. is surprisingly This heightened demand should put the upshot of the FOMC action this stable. talk of negative rates in the U.S. summer is that interest rates will on hold and make it easier for the not be a disruption to capital flows. During the second quarter, the most Federal Reserve Bank to contemplate The same cannot be said about the disruptive event was likely the June normalization; however, the unspec- regulatory environment. 23 vote by the British to exit the tacular rate of economic growth European Union. The exit will take in the U.S. doesn’t inspire higher As predicted, the creeping impact of many months – perhaps even years – rates. And against the backdrop of Dodd-Frank regulations is having a to execute but there was an immedi- the global economy, there seems to material impact on commercial real ate negative response by investors be less and less of an argument for estate financing in 2016 and will be throughout the world. That response normalization of interest rates within a significant negative factor on the ranged from cuts in the credit rating the three-year horizon. In fact, you market in 2017 and beyond. Regula- for Great Britain to flights of capital could argue that the current environ- tions have steadily tightened their from Britain and Eurozone countries. ment has become normal. grip on lenders, making it harder While the vote seemed to be a nega- and progressively more expensive to tive for England, Scotland, Wales At its June meeting, the Federal borrow money for commercial real and Northern Ireland, it will take the Open Markets Committee (FOMC) estate, even without an onerous full implementation of the divorce to seemed not to embrace the rate increase in interest rates. understand the economic impact. environment as a new normal, yet the FOMC chose not to raise its key For a couple of years, regulators For borrowers, the Brexit was defi- overnight lending rates again. In have looked at individual banks nitely good news. As was seen in the the minutes of the meeting, which with heightened scrutiny and a early primal response by investors, a were released July 27, the FOMC more formulaic approach to routine divided European Union makes the members expressed satisfaction reviews of portfolio. Risk rating was

www.developingpittsburgh.com 53 tougher and there were requirements whether those are higher or just improvements. The artificially high for reserves that were unreasonable, regulated higher. Higher capital value increased the amount of equity especially since the regulations were reserves limit a bank’s ability to needed for new construction. passed – but not implemented – pursue other loan opportunities. during a downturn in real estate that These regulations come at a time Each of these regulatory burdens has now passed. when there is increased competi- impacted the banks by imposing tion within the bank for capital, as higher reserve values on projects or “In the majority of cases with lenders find they must invest more deals that did not meet the HVCRE development and construction heavily in technology, reinventing guidelines. That, in turn, impacts projects, banks are looking for the branch banking and cyber security. all borrowers doing business with permanent loan to be consumed by banks. the institutional market – insurance Beginning in 2015, banks also faced companies or CMBS – but regula- the implementation of High Velocity “The impact of HVCRE is in the tions are starting to impact those Commercial Real Estate (HVCRE) higher cost of capital to the banks,” institutions,” notes Jack Shelley, regulations. HVCRE placed arbitrary explains John Fetsko, senior vice senior vice president for real estate – and often higher – rules for equity president and senior commercial lending and services for Dollar Bank. in deals. More problematic were banker at Wesbanco. “Banks then “If we took on the permanent loan, regulations that forced banks to use have to increase their prices or raise it’s not that it wouldn’t perform but, cost rather than current market value the rate being charged.” with the regulations on portfolio for assets – like land – that were part size and diversification, that might of the deal’s equity. That regulation Although warnings about HVCRE make it more difficult to participate is particularly onerous in a market regulations have been sounding since in further developments with our where developers have long-standing mid-2015, the gestation cycle of a long-term customers.” land positions. At the same time, development deal is long enough HVCRE required that applicable that the impact of HVCRE wasn’t ex- The regulations Shelley references ratios use the fully-stabilized value perienced much until 2016. Similarly, force banks to reserve higher levels of the property as the denominator, regulatory oversight of certain types of capital to recognize the risks, rather than the cost of the project or of deals, primarily multi-family, has

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54 DEVELOPINGPITTSBURGH | Fall 2016 tightened in 2016. Lenders in that required. Fifth Third Bank and space are finding that deals that At the opposite end BankCorp South have kicked off zero drew no comment a year ago are down payment mortgages, although now requiring remedies or higher of the spectrum, unlike during the housing bubble, reserves. these kinds of loans are available conditions for only to borrowers with above- “The [HVCRE] regulations have average credit and payment cover- worked their way into the system residential mortgages age. Lending to those with poor or but they have not been fully average credit remains challenging. digested yet. If a bank is blessed to continue to be be well-capitalized, it can sit back more aggressive. Dodd-Frank regulations on com- and plan for the changes and still mercial mortgage backed securities serve its customers in the way they Regulatory burdens (CMBS) have begun to kick in. are accustomed,” observes Shelley. The regulations that will have the “HVCRE is definitely an issue and it’s on residential biggest impact will be those that having an effect, but we don’t see a impose risk retention by the buyers pattern yet of how that is affecting mortgages remain of the bonds. In particular, buyers the market. I do see a handful of of B-rated bonds will be required banks in the region that are doing high but several to retain five percent interest in less because of HVCRE.” major banks have the unrated transactions. With the disruption in the CMBS markets that At the opposite end of the spectrum, begun to offer occurred in the first quarter, buy- conditions for residential mortgages ers of B-piece bonds were already continue to be more aggressive. mortgages with chafing at the spreads or last-minute Regulatory burdens on residential rate hikes for those deals. The mortgages remain high but several no down payment increased regulation will make it major banks have begun to offer more difficult to finance projects mortgages with no down payment required. with higher risks.

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www.developingpittsburgh.com 55 The first CMBS deal with a risk to the CMBS bond buyers but risk retention structure included was put retention adds another layer of risk forward by Wells Fargo on August During the first and cost that will impede volume. 1. It was not a surprise that spreads In market conditions where volume drifted higher in the early response; quarter of 2016, is already being diminished by risk however, the risk retention proved fears about the perception, such an additional an attraction and the majority of the burden is unwelcome. investment-grade bonds in the $871 Chinese economy million issue were oversubscribed. During the first quarter of 2016, Spreads fell to 94 basis points, be- and a potential fears about the Chinese economy low the 97 bps that was the forecast real estate bubble and a potential real estate bubble and well below the 108 bps spread implosion drove spreads on B-piece of the offering a week earlier. implosion drove bonds much higher. Many CMBS issuance this past winter saw erosion While it may seem that such spreads on B-piece of B-piece tranches, as individual regulation is logical, Dodd-Frank bonds much higher. loans were rejected by buyers. The addresses CMBS in a way that belies result of the risk aversion was a an understanding of how the market Many CMBS issuance steep decline in CMBS volume. works and could be seen as redun- this past winter Global CMBS volume was $19.4 dant. CMBS deals include multiple billion, down almost one-third from tranches of loans with varying saw erosion of the $28 billion of the first quarter of degrees of quality. The variances are 2015. Since then, however, calm has rated and the risk premiums associ- B-piece tranches, returned to the CMBS market. ated with the lower quality – mean- as individual loans ing higher risk of default – loans “CMBS has definitely seen recovery are priced into the deals. As risk were rejected by from the first quarter,” notes perception rises, so does the price Popovich. “Everyone is quoting now. or the spread of the lower-rated buyers. The result of Spreads have come in 50 to 75 basis pieces of the CMBS issuances. At the the risk aversion was points. Everyone is eager to get to heart of CMBS is the opportunity for the market because the paper is in borrowers of riskier projects to get a steep decline in demand and the fundamentals of financing, while at the same time commercial real estate are very good offering buyers of the loans a higher CMBS volume. right now.” return. Improving transparency or rating accuracy could be beneficial The disruption from the first quarter greeted a year in which CMBS volume was forecasted to reach as high as $125 billion. Forecasts of volume for the full year have been moderated accordingly, with expectations falling to $65 to $70 billion by year’s end.

There may be better news for CMBS on the regulatory front too. A bill that passed through the House Financial Services Committee in March, known as The Preserving Access to CRE Capital Act of 2016 (H.R. 4620), is going through Congress with the intention of removing some of Dodd-Frank’s impact on low-risk CMBS. The increased regulation of unrated pieces would still remain with its passage, however. Thus far, market conditions have stabilized and second quarter volume bounced back to billion; however, the CMBS market remains cautious about higher defaults and Rates from the Eurozone and several European nations remain negative. Source Wells Fargo Economics. the Dodd-Frank regulation won’t help deal generation.

56 DEVELOPINGPITTSBURGH | Fall 2016 In many ways, however, disruption levels of caution among lenders in percent, two years of interest only, in global markets and increased that space. 80 percent loan-to-value and ten- regulation are just distractions year amortizations. from what is primarily a stable “In some markets life companies borrowing environment, especially are backing off of multi-family but Terms like those offered by Fannie in comparison to the upheaval that in general they are not,” observes and Freddie on multi-family call to marked the years following the Dan Puntil, senior vice president for mind the kinds of aggressive deals financial crisis of 2008. Grandbridge Real Estate Capital. that marked the mid-decade bubble “There is a sense that some markets in the 2000s. But lending conditions Events in China and Europe were are getting overbuilt. There are a like that are far from the norm. largely irrelevant to the life insur- few markets that are getting soft, After a decade which saw money ance companies that lend into like Houston, with a lot of transient lent without regard to repayment, commercial real estate. All of the workers.” followed by a complete freezing life insurance lenders increased of liquidity and then slow, painful allocations for commercial real “If you’re looking for a construction deleveraging, capital markets are estate again in 2016 and, absent loan to get a multi-family project behaving rationally and predictably. the concerns that marked CMBS and started in Pittsburgh that could be There remains an excess of cash bank regulations, life companies a tough sell,” predicts Nick Matt, looking for a place to work but have been able to remain aggressive senior managing director at HFF. that’s not a bad place for borrowers and choosy lenders. One factor “There has been a lot of inven- in commercial real estate. plaguing life insurance companies tory added and there is a lot in the is low interest rates. Given the fact pipeline. Banks want to see how “There is a lot of money looking for that real estate is meant to be part things play out. On the permanent less product than buyers would like, of a portfolio that produces income financing side, the product has been particularly when everyone is in the to hedge against hiccups in actuarial holding up. Occupancy has hung game,” says Puntil. assumptions that lead to losses, low in there. Rents have hung in there. rates make the hedge less effective. We’re financing a number of multi- “The capital markets seem to be To combat the falling rates, life family deals right now.” clicking very well right now,” notes companies have begun to establish Popovich. “There is more capital floors for rates, generally in the 3.25 Matt reports that Fannie Mae and chasing than there are deals. That to 3.5 percent range. Freddie Mac have been particularly has pushed capital to look at sec- aggressive on stabilized multi-family ondary markets like Pittsburgh for Life companies have been especially deals, many of which represent opportunities.” integral to the financing of the projects that started construction DP apartment boom across the nation. within the past few years. In addi- Some six years into a growth cycle tion to the liquidity, borrowers are for multi-family, the amount of seeing very favorable conditions on new construction is causing higher the deals, with rates as low as four

www.developingpittsburgh.com 57

Legal/Legislative Outlook

Pittsburgh’s Affordable Housing Initiative

ittsburgh’s recent revitalization is partly the result of what was a broad- based, persistent effort to bring prosperityP back to the region after a generation of struggle. Pittsburgh has become a model for such efforts elsewhere but there is an unintended downside to that broad-based effort: the fruits of the recovery have not been equal.

During the past 30 years the broad-based approach also meant that initiatives to foster recovery were diffused, often marked by similar groups competing for the same resources. The results have also been diffuse, however. The rising tide of Pittsburgh’s economy has not lifted all boats. One group that has been left behind is the residents of affordable housing.

In this decade the renaissance has been especially beneficial to the City of Pittsburgh, which has seen an influx of population – espe- The Overlook, developed by cially of younger people – and a Trek Development in Braddock, PA. boom in new residential construc- © 2014 Massery Photography. tion. Housing starts within the city limits over the last half dozen years have exceeded the activity levels of Cranberry Township in its heyday. The neighborhood that In May, the City Council received the • Respect and stabilize exist- has seen the most dramatic revival is report of the 27-member Pittsburgh ing communities; East Liberty, which has changed from Affordable Housing Task Force • Create quality affordable blighted to hip in less than a decade. (PAHTF), which included members of housing opportunities; and As the success in East Liberty begins Mayor Peduto’s staff, elected of- • Maximize the impact of to spread north to Garfield and east ficials and private sector developers resources by ensuring to Larimer and Homewood, concerns like Trek Development’s Bill Gatti. lasting affordability about affordable housing options for The PAHTF looked at the problem of The desire to ensure affordable hous- the existing residents is growing and inadequate affordable housing and ing for all Pittsburgh residents has its the City of Pittsburgh is responding. came up with three major goals: roots in basic fairness. Advocates for

www.developingpittsburgh.com 59 lower-income and working class citizens, as well as the region’s leaders, see Pittsburgh’s turnaround as a hollow victory if there isn’t equity in the fruits of that turnaround. Pittsburgh is a blue- collar town, with a history of upward mobility and opportunity for its working people. But like other cities, Pittsburgh also has an ugly side to its history. The “urban renewal” of the Lower Hill District to prepare for the Civic Arena is but the best-known of missteps in the treatment of poorer residents. There seems to be a genuine desire to learn from past mistakes. There is also a practical side to the initiative to ensure affordable housing for all.

“I’ve been to Pittsburgh many times and in many respects it’s a good news story, but there are many people in Pittsburgh paying an unsustain- able amount of their income to rent or own their home,” reports Stockton Williams, executive director of the Terwilliger Center for Housing at the Urban Land Institute (ULI). “There is abundant research that shows when people pay an unsus- tainable share of their income for housing, they sacrifice in other areas. That’s not good for them or the economy.”

Williams noted that the most recent survey of metropolitan Pittsburgh working families – defined by earning up to 120 percent of the median household income and working at least 20 hours per week – showed that 52,266 households were paying more than 50 percent of their income for housing.

In its report the PAHTF found that while more than ten percent of the housing stock in Pittsburgh was affordable income-restricted, “there remains an affordability gap of 17, 241 units for households earning up to 50 percent of the city’s median household income.”

One big difference in policy that is part of the reason that the Peduto Administration feels com- pelled to act is the diminished role of the federal government. Beginning with the formation of the Department of Housing and Urban Development as a cabinet position in 1965, the federal government has taken the lead in housing equality as an outgrowth of civil rights advocacy. Since 2010, however, two of the primary funding sources for housing subsidy - the HOME Investment Partner- ships Program and the Community Development Block Grant program – have decreased by 52 percent and 28 percent respectively. Moreover, the lack of affordable housing stock in the city has left 41 percent of the holders of Housing Choice Vouchers could not find homes that qualified for use, leaving one-fourth of the $42 million available unused.

“The mayor is really determined to get something done and formed the task force. The city reached

60 DEVELOPINGPITTSBURGH | Fall 2016 out to the Urban Land Institute (ULI) to connect market-rate developers to the discussion,” recalls Lynn DeLorenzo, executive associate at Tarquin- CoRE LLC, past president of NAIOP Pittsburgh and executive committee member of ULI. “What I like is that the city came out to developers to ask what challenges might be created for future projects. Developers want to do more affordable housing but are challenged by the lack of the tax credits.”

The lack of tax credits has been a disincentive for development of the affordable product across the U.S. In cities with historically high home prices, this shortage of development has created a crisis. It is the Peduto administration’s goal to avert such a crisis in Pittsburgh.

East Liberty is ground zero of sorts for this problem. Once home to a high percentage of public housing projects, East Liberty has seen the most new market rate multi-family development, with rents that are $2.25 per square foot and higher. Three high-rise projects were demolished in 2009, along with 174 townhouses and smaller dilapidated apartments. Roughly 650 units of subsidized affordable housing were replaced with about 75 low-income restricted units.

The remaining residents struggled to find affordable housing in East Liberty. Many were forced to leave the community and the problem persists today. A recent opportunity for residents to rent 19 affordable homes in Bloomfield/Garfield brought 300 applications. While the demolition of the high rises was a key to reconnecting East Liberty to its neighboring communities and to shoppers, the loss of affordable units is regrettable.

With two of the city’s biggest proposed redevelopment projects located in the Hill District and Hazelwood, the timing for instituting workable programs is ripe. The environment in which the reforms will take place is less so.

DeLorenzo points out that the cost of development in the City of Pittsburgh is proportionally higher 24 rated AV® Preeminent™ than in other cities, making development of afford- 21 named as Best Lawyers® able housing more difficult to pencil out. Using tax 13 are Super Lawyers® credits to make up the gap caused by the lower rents of affordable apartments made the pro forma and work in past but without them, projects become 6 listed as Super Lawyers Rising Stars® unfeasible. Moreover, many of the region’s most successful multi-family projects – The Yards, East Side Bond, Bakery Square and Village Green – are located in neighborhoods where higher rents can be commanded, making developers less than anx- ious to reduce the possible return on investment. On the other hand, all of those successful projects received some significant public subsidy to account for the higher costs associated with urban development and requirements that wouldn’t have been

www.developingpittsburgh.com 61 made on suburban developments. mechanism was borne by the com- additional work is needed with devel- With the acceptance of public funds, mercial real estate industry alone. opers, property owners and financiers reasons the city, comes the responsi- Developers pointed out that the to find workable rules. bility to include affordable housing in real estate transfer tax was already the development. high and that raising millage would “We are not the same kind of market dampen the desire to have property as other cities. We recognize that,” “We are looking at incentives. There in the city. Several attendees at the acknowledges Gastil. “Pittsburgh is are no mandatory requirements but meetings suggested broadening the in many ways an emerging market for it’s also not mandatory [that a de- base of the revenue sources and be- affordable housing.” veloper] get public subsidies,” notes ing more creative in funding ideas. It Indeed, the first attempts at funding Raymond Gastil, AICP, director of city was noted that several of Pittsburgh’s the Pittsburgh Housing Trust Fund planning. “If a developer is getting philanthropic foundations have have met some resistance. PAHTF low-income tax credits, affordable affordable housing as a key mission. recommends using expiring Tax Incre- housing units are part of the require- Brian Walker, NAIOP Pittsburgh’s ment Financing and tax abatements ments but there are other forms of president, cited examples of similar (like LERTA), along with a one dollar public assistance. The administration initiatives in other cities that floun- increase in the hotel room tax. It also wants to take a hard look at develop- dered when commercial real estate recommends a one-half mill increase ments that are getting public subsidy bore the full weight of funding. to the real estate tax and a one to see if there are opportunities for percent increase in the real estate affordable housing. There is no abso- “When this was happening in San transfer tax, a tax that is already lute baseline in the recommendations Diego, the development of the Gas viewed as onerous by the real estate the task force made but we need to Light District sat idle for four years,” community. incentivize the inclusion of affordable he reported. “It wasn't until the units in new developments.” impact fees being assessed solely Pittsburgh’s leaders seem intent upon on the developers was decreased, the affordable housing initiative There are direct financial incentives until density bonuses and expedited working and it’s likelier than not that that come from state or federal agen- permitting plans were arranged, and a funding mechanism that is accept- cies but Gastil cited the use of zoning the burden of funding the affordable able to all stakeholders will be found. adjustments as examples of incen- housing trust fund was spread across As with most incentive-based devel- tives for developers. The city’s zoning the whole community, not just real opment programs, ways can be found ordinances could be altered to allow estate developers, that redevelop- to do good projects while making for increases in density or building ment of the District took off.” desirable returns. There appears to height in recognition of inclusion be sufficient development will to cre- of affordable units in a housing or The trust fund is recommended to be ate good projects for good reasons. If mixed-use development. These would $10 million to be used annually to executed properly, affordable housing help offset the loss of rental revenue low-income families to assist them in can be blended into the fabric of the for lower-income units compared to affording their homes. It is the inclu- communities in Pittsburgh in a way market-rate rents. Adding more units sionary housing category where the that raises the standard of living. For to a project would obviously add actions Ray Gastil describes would the Pittsburgh revitalization to be more top line and could make a pro come into play, with the recommen- complete, the standard of living must forma work. dation that any development of 25 increase throughout the population. or more units that receives any public The PAHTF made five specific recom- assistance be considered for inclu- “Any growing economy needs service mendations in its May report. sion of affordable units. Affordable workers and blue collar workers Those are: Housing Opportunity Overlay zones to fill out critical positions in the are proposed for the best locations economy,” notes Williams. “Those • The Pittsburgh Housing for new market-rate apartments to kinds of workers tend to live in Trust Fund. include affordable units as well. affordable housing.” • Increased Utilization of the 4% Low Income Housing PAHTF exhorts City Council to take “I have never been to one good Tax Credit. action by preparing for implementa- mixed housing project around the • Inclusionary Housing. tion of the recommendations in country where you can tell the dif- • Preservation of Existing 2017. During the balance of 2016, ference between the affordable and Affordable Housing. PAHTF suggests that governance market-rate units,” asserts DeLo- • Protection of Existing be established, along with finding renzo. “You don’t want to create the Homeowners and Tenants. sources of funding the Trust Fund tenements of the future. If you build and tax credits. In 2017 and 2018, affordable housing that is separate During work sessions with the city, it is recommended that the specific from other neighborhoods that’s developers applauded the effort to implementation of the five strate- what you’ll get.” build more affordable housing but gies be codified into ordinance. This DP expressed concerns that the funding implementation process implies that

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The Denver Transit Solution

n June 2014, the Allegheny Confer- ence on Community Development led a group of more than 90 Pittsburgh leaders onI a benchmarking trip to Denver. The visit was a reciprocal trip that included corporate CEO’s, elected officials, small business owners, philanthropic foundations and public employees. Denver was one of the few cities to create more jobs than Pittsburgh after the Great Recession and Pittsburgh’s civic leaders wanted to see what could be learned.

In many ways, Denver had succeeded following a playbook similar to Pittsburgh’s. There was an energy economy entrenched in Denver that benefitted from the fossil fuel market of 2008-2013. Linkage to universities that were fostering entrepreneurship helped boost the technology and healthcare sectors of the economy and was a job- generator. But two major factors were different: population growth and public transportation.

People had been attracted to Den- ver’s climate, outdoors and economy since the 1980s. Population growth averaged 50,000 people annually since the mid-1990s. These were dynamics that were 180 degrees from Pittsburgh’s experience. In practice, of course, attracting new population is difficult for older, colder cities. Drawing on Denver’s experience in that area wasn’t instructional.

www.developingpittsburgh.com 65 Denver’s light rail extension connected the city’s central business district with its airport, creating a corridor for new business and technology innovation.

What was instructional – and eye take slightly less than a decade opening – was the massive expan- to complete. They saw significant sion project that the Regional Transit What happened next private real estate investment occur- District (RTD) was nearing comple- ring around Union Station and along tion after a decade. The project is resonated with the several corridors where connections called FasTracks and it involves 122 were being made between business miles of new light rail and commuter Pittsburgh leaders and technology, or consumers and lines, 18 miles of bus rapid transit in 2014. Denver’s employment. What made the big- and 57 new transit stations. The gest impression, however, seemed project also includes technology leaders returned to to be the way Denver’s civic lead- and connections that enhance bus ers accomplished the project and service from suburb-to-suburb and the voters again in especially how it was funded. makes using the transit system safer 2004 with a better and more efficient than in the past. Located at the foot of the Rocky Most of the expanded system will be story. Voters were Mountains, Denver is a major city completed by the end of 2016 with a in a sparsely-populated Western price tag of almost $6 billion. given a clear vision state. There is ample land to of how an expanded accommodate growth in all direc- FasTracks restored Denver’s historic tions. After decades of growth, Union Station in its center city and light rail and bus Denver was a sprawling metropoli- connected it to Denver International system would make tan area that lacked connectivity. Airport, the booming suburbs north, Its leaders were convinced that the west and south of the city and to the Denver a more key to continued prosperity and University of Colorado in Boulder, diversification of its economy lie in some 30 miles to the northwest. The unified economic creating a regional transportation ambitious project nearly quadrupled region and be better system that would attract business the size of the transit system. and jobs. Plans were made. A solu- prepared to compete tion was presented to the voters The Pittsburgh delegation found for funding the program and it was the scope of the project impressive, in the 21st Century. soundly defeated. especially since construction will

66 DEVELOPINGPITTSBURGH | Fall 2016 What happened next resonated work together towards a common To accomplish a similar expansion with the Pittsburgh leaders in 2014. goal and common vision,” O’Brien of Pittsburgh’s transit system will Denver’s leaders returned to the chuckles. “We’re sitting there think- require some legislative heavy lifting, voters again in 2004 with a better ing we just organized this trip with a bit of persuasion with the federal story. Voters were given a clear exactly those kinds of people. We’re government and a Herculean effort vision of how an expanded light rail sort of halfway there. For Denver, to figure out what solutions need to and bus system would make Denver that was what they described as one be included. a more unified economic region and of the biggest challenges.” be better prepared to compete in the One of the immediate responses to 21st Century. A funding mechanism Civic leaders in Pittsburgh have the Denver trip was the formation of was proposed that was a sales tax a history of assembling teams the Regional Transportation Alliance increase that was small enough – 4 of like-minded individuals from (RTA), a task force that includes the cents on every $10 purchased – that very different industries to tackle kind of coalition that the RTD used it was neither punitive nor a dis- problems. The genesis of the Al- to accomplish its mission. That kind incentive to shopping. Put on the legheny Conference, for example, of broad-based effort may be second ballot in an environment of no new was a result of an effort led by Jack nature to Pittsburgh’s leaders but taxes, the measure passed in large Heinz and David Lawrence to clean working out what kind of system will part because Denver’s citizens saw an up Pittsburgh’s awful pollution serve the region best won’t be an infrastructure improvement that they problem. Since that time, groups of easy task. The RTA conducted a large believed would pay off for them. corporate CEO’s, politicians, labor crowd sourced survey throughout and non-profit leaders have leaned the past winter and spring and Colorado is not a tax and spend into the major problems confronting an initial report is expected to be state. The Tax Foundation ranked the the region. Some of those, like the presented by year’s end for further state 18th most business-friendly for loss of heavy manufacturing, have action. It’s unlikely that the solutions corporate taxes. A powerful coalition been awesome problems and many ultimately presented will be any less of politicians, contractors and labor of the problems haven’t been solved. ambitious or expensive than Den- have been trying to get a similar one But the challenge of articulating the ver’s were. Morgan O’Brien is one percent sales tax passed since 2013 recommended solutions to the public regional leader who isn’t daunted by to raise $600 million annually to in- shouldn’t be beyond the leadership that prospect. crease the funds spent on highways in Pittsburgh. and bridges. In June, that coalition “The other thing that they talked announced that the proposal was Denver has also been successful at about during that trip was that it again being pulled from the ballot in executing the vision in a very com- was a regional strategy. It wasn’t 2016. Voters went for the Regional pressed timeframe. Legislation that just the City of Denver or a particu- Transportation District’s increase enabled a construction manager/ lar area. It was the whole communi- in 2004 because there was a vision general contractor to be hired early ty, leaders all at the table coming up they could share. in the project helped RTD go from with a single strategy,” he says. “We no design to construction on the had a number of county commission- “People embraced the vision. They first packages in about two years. ers around Pittsburgh sitting in the embraced the strategy. They under- The bulk of the construction didn’t room with us on that trip. It’s been stood it,” notes Morgan O’Brien, begin until 2009, yet RTD was able the DNA of successful efforts in this CEO of Peoples Gas and chairman to begin opening commuter lines as region to have a broad cross-section of the Allegheny Conference at the early as 2013 and the Union Station of people. We all felt really excited. time of the trip. “There was a broad in 2014. We thought we can do this. We group behind it. There wasn’t one don’t have the specifics as to how it political person leading it.” Executing the financing of the might look but I think we all came expansion, which is made up of back and said we’ve done things like O’Brien recalls that the leaders of roughly a dozen major projects to this before. the effort in Denver explained to the create nine transit corridors, was Pittsburgh delegation that the big- also difficult. The sales tax increase “We’re competitive people. We said gest challenges in the process were was critical to the expansion but the if Denver can do it we can do it. It things that weren’t surprising to the funding that the tax raised wasn’t gave a little more energy to the idea Pittsburghers. enough for the entire FasTracks that we have to work together as a program. Significant portions of broader community and have a re- “One of the ingredients they said FasTracks proceeded with private/ gional strategy. That was reinforced caused them to be successful in public partnerships as developer. out there in Denver.” moving that strategy forward was Bonds were issued that rely on fares DP that they had broad community sup- and tax receipts to repay the bond- port. The formula was that you need holders. The Federal Transportation a bunch of community leaders from Administration contributed more all walks of life who were willing to than a billion dollars to the effort.

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What is your position on the role of state/federal government in maintaining infrastructure and supporting transit?

Congressman Bill Shuster businesses depend on drivable Unfortunately, the state and U.S. House of Representatives roads, an efficient aviation system, federal governments have often and functional ports to travel and shortchanged the maintenance and "I believe move products; and industries like modernization of our highways, in lim- coal and natural gas require pipe- mass transit systems, and other ited govern- lines, railroads, and highways to infrastructure. That’s costing each ment. Adam enable quick and reliable access to US household, on average, $3,400 Smith, the markets. As Chairman of the House a year. father of Transportation and Infrastructure modern Committee, I have worked to I’ve consistently supported econom- address our infrastructure needs increased federal government ics who through legislation like the FAST investment in transportation – in developed Act. This measure was the first the 2009 American Recovery and the underly- long-term highway bill in over Reinvestment Act, for example, and ing prin- a decade, and it did not raise a in 2015’s Fixing America’s Surface ciples of a penny in taxes. The optimal situ- Transportation Act, which autho- capitalistic market economy, also ation for government supporting rized $305 billion over five years believed in limited government. transportation is when federal, for improvements to US highways He recognized that there are three state, and local governments are and mass transit – and I believe primary roles the government must working together, along with the that more must be done to fix our fulfill for its citizens: to preserve private sector, to meet those needs, crumbling infrastructure. I would justice, to provide for defense, like we are working to accomplish support a number of options to and to erect and maintain public through legislation in the Transpor- increase funding for infrastructure works to facilitate commerce. Our tation Committee." construction and maintenance – Founding Fathers also understood including legislation to establish the important role of the national Congressman Michael F. Doyle a National Infrastructure Develop- government in helping connect our U.S. House of Representatives ment Bank, which would leverage country through its infrastructure. billions of dollars in private invest- In addition, it has long been a "Trans- ments into infrastructure improve- Republican tradition to take this portation ments. I would also support raising obligation seriously — from Presi- infrastruc- the federal gas tax, or taxing each dent Abraham Lincoln’s support ture plays barrel of oil. A modest fuel tax for the transcontinental railroad a critical increase would cost most Ameri- to President Theodore Roosevelt’s role in our cans less than the costs they would construction of the Panama Canal nation’s otherwise incur from our increas- to President Eisenhower’s establish- economy. ingly outdated, poorly-maintained, ment of the Interstate Highway Poorly and over-capacity transportation System. maintained, infrastructure. In addition, it would inadequate create new jobs and promote These beliefs hold true today as infra- economic growth." infrastructure in the United States structure slows economic growth, is something that touches the reduces Americans’ quality of life, lives of people of all backgrounds. and results in more travel-related Parents need the ability to safely injuries and deaths. transport their children to school;

www.developingpittsburgh.com 69 Despite the economic successes of the past decade Pittsburgh still experiences very slow growth in job creation and population. What are your ideas for supporting job and population growth in Western PA?

Representative Mike Turzai capital investment and development. By unique combination of world-class Speaker of the House allowing this nascent industry to grow, players in different industry sectors, Pennsylvania House of Pittsburgh can lead the nation in creating from financial services to health care Representatives family-sustaining jobs that will retain to education to manufacturing to our best and brightest young minds and technology to energy to construction, "Any vision attract many others to the region." the people of Western Pennsylvania can for family- lead the rebuilding in the 21st. sustaining job Congressman Mike Kelly creation and U.S. House of Representatives One of the missing ingredients for population healthier growth in Western PA is a growth for "We’ve been hostile Federal regulatory and tax Pittsburgh blessed by environment. Fed Chair Janet Yellen re- should begin God in Penn- peatedly blames slow economic growth by ensuring sylvania, but on "headwinds" hitting our economy. Pennsylvania’s particularly I recently suggested to her that the energy inde- Southwest headwinds are actually man-made. In pendence. Pennsylvania, other words, there is a considerable with all the drag on growth due the many pages of For a 21st century Pittsburgh energy resources we regulations coming from agencies like policy to work, we must pass into law need to be the Environmental Protection Agency, the Keystone Energy Enhancement Act successful. the Department of Labor, and the (KEEA), a bill that will utilize the region’s Population financial regulators that are limiting vast resources by incentivizing job growth capital and financial services. creation and infrastructure development comes with economic opportunity. With within Pennsylvania’s natural gas, manu- our resources of coal and natural gas in Rather than overregulation, we need facturing and petrochemical industries. particular, we have the opportunity to smart regulation. We need to slow be the epicenter of an energy revolu- the Washington regulatory onslaught. In 2012, the American Chemical Council tion if government could get out of the That's why I introduced and passed in studied the potential impact natural gas way. Additionally, we’ve been blessed the House the SENSE Act, which will could have on employment and found a with some of the most highly trained save 5,200 middle class Pennsylvania staggering 1.1 million family-sustaining workforces in the country which means jobs and allow the coal-refuse to downstream jobs were available around we can continue to aggressively manu- energy industry to continue to supply the industry in construction, 980,000 facture things and build wealth. Combine power to the grid while cleaning up potential jobs revolved around the supply those two items, energy resources and the environment. It's why I am working chain and 200,000 manufacturing jobs a strong manufacturing workforce, with for increased flexibility for community were waiting to be filled. a top-notch education system and our financial institutions so they can get opportunities for economic growth are more capital flowing to small busi- It’s commonsense that even a portion of bright." nesses. And it's also why I've pushed 2.2 million jobs downstream that could for accountability for Federal regulators, turn Pittsburgh into a great global energy Congressman Keith Rothfus insisting that they accept responsibility hub cannot be created if the supply is U.S. House of Representatives for the negative impact of regulations killed upstream by onerous taxes and on wages and job growth. We also overregulation. "It was the need to ensure the stability of our By creating Keystone Energy Enhance- people of infrastructure, and I have been a ment Zones throughout Pennsylvania, Western strong advocate for investing in our modeled after the successful Keystone Pennsylvania locks and dams that allow signifi- Opportunity Zones program, industrial that built this cant shipping to occur within our locations and brownfield sites once left country in region." for dead can be filled with companies the DP and jobs for decades to come. 19th and early 20th Participation in the KEEZ program is centuries. contingent upon job creation, private Given the

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The construction will start in approximately 18 months, with commercial production expected to begin early in the next decade. The project will have up to 6,000 construction workers involved in building the facility, and an expected 600 permanent employees when completed.

Allegheny County Economic Development (ACED) and our economic development partners are prepared for the growth, as well as the opportunities, Allegheny County that will come as a result of Allegheny County the project. In addition to the Economic Development immediate workforce and sup- Chatham One, Suite 900 ply needs, the project will also 112 Washington Place bring substantial downstream Pittsburgh, PA 15219 activities to the entire region. 412-350-1000 (T) 412-642-2217 (F) The petrochemical complex Robert Hurley, Director is in close proximity to gas [email protected] feedstock providing shorter www.alleghenycounty.us/economic and more dependable supply chains to Shell. Far more In June, our region finally important to the region is the received the news that we had fact that more than 70 percent been hoping for and expecting: of North American polyethylene Shell Chemical announced its customers are within a 700-mile final investment decision to radius of Pittsburgh. The facility build a major petrochemical will serve as a magnet for the complex in Beaver County. plastics industry, but also for

www.developingpittsburgh.com 73 other companies which will become port manufacturers and businesses is designed to provide another part of the industrial supply chain as they work to become a part of economic development tool for the that will serve the plant. The com- the cracker supply chain. ACED of- region by engaging companies from pleted facility will need suppliers fers a menu of resources for these Pittsburgh and across the globe in of the industrial gases and other developers and businesses, includ- leading research. chemicals required for the cracking ing tax and financing incentives. process. There will also be a de- The region has become a model in mand for companies who will work ACED is also providing investment repositioning itself from a place to service, repair, and refurbish the and support to partnerships and of decline to a hub of innovation, plant’s equipment and technology. programs that will prepare a work- research, energy, investment, and Businesses that supply hospitality force that will be in demand for the collaboration. Allegheny County and other services or consumables construction and operation of new Economic Development looks to the plant are also planning to facilities. ACED awarded a grant to forward to continuing to work with make significant investments in the the Iron Workers Joint Apprentice- its partners in supporting new busi- area and planning for significant ship and Journeyman Training Fund ness and industry, and is excited increases in business. to support the expansion of its about what this project and its training facility that will result in ancillary results will mean for the Manufacturers, companies and de- the training of an additional 300 region’s overall growth. velopers are contacting ACED with apprentices and journeymen to both small and large requirements help meet the anticipated demands for sites, and expressing interest in of the construction industry. ACED the I-376 and I-79 corridor. We are also participated in the launch of working closely with federal, state, CMU’s new Additive Manufactur- and local development partners on ing Lab this summer– The Next business attraction efforts to sup- Manufacturing Center. The Center

The new office in the Pittsburgh a variety of high-tech composite Armstrong County region positions ADEX Medical applications in many demanding Armstrong County Department Staffing to serve the growing industries. of Economic Development healthcare industry in southwestern Northpointe Technology Center Pennsylvania and the tri-state area. The ACIDC continues to promote Center II the remaining office and light 187 Northpointe Boulevard In March 2016, the ACIDC sold industrial lease space in Technol- Freeport, PA 16229 an 85,000 square foot industrial ogy Center II and pad-ready sites 724-548-1500 (T) building in Kittanning Borough to in Northpointe. Northpointe has 724-545-6055 (F) long-time tenant, Dielectric Solu- continued to generate interest with Michael Coonley, Executive Director tions LLC. The ACIDC purchased four lots currently under agree- [email protected] the unoccupied building in 2005 ment. The ACIDC also operates www.armstrongidc.org and made extensive renovations the West Hills Industrial Park and and tenant improvements. Shortly maintains a database of properties In June 2016, ADEX Medical thereafter, the ACIDC entered into available throughout the county. Staffing LLC leased 1,000 square a lease to purchase agreement with For information about the services feet in Northpointe Technology Dielectric Solutions. The company offered by the ACIDC, or to search Center II. Owned and operated by has developed a revolutionary available land and buildings in the Armstrong County Industrial process for producing light-weight Armstrong County, visit http:// Development Council, Technology glass fiber fabric, a key component www.armstrongidc.org. Center II is a 32,000 square foot utilized in many advanced elec- multi-tenant building located along tronics products. Their patented SR 28 at Exit 18. ADEX Medical process results in a superior per- Staffing is headquartered near forming product that is typically Tampa, Florida and provides recruit- much thinner and stronger, with ment and placement services for improved electrical and thermal medical professionals, specifically properties compared to other traveling nurses. Their other offices commercially available products. In are located in Atlanta, Los Angeles, additional to electronics, Dielectric New York City, along with an inter- Solutions' products are used in national office in Amman, Jordan.

74 DEVELOPINGPITTSBURGH | Fall 2016 construction and an expected 600 ommended the Pennsylvania Indus- Beaver County permanent employees will work at trial Development Authority (PIDA) Beaver County Corporation for the complex when it is completed. approve an additional $400,000 Economic Development loan to support the expansion. 250 Insurance Street, Suite 300 Columbia Gas of Pennsylvania Creekside is a private label and Beaver, PA 15009 opened a new centralized training contract packager of water-based 724-728-8610 (T) facility in Center Township for em- beverages. The financing will fund 724-728-3666 (F) ployees who operate and maintain a new single serve production line, James Palmer, President its natural gas distribution system. allowing the company to retain 30 [email protected] The $10 million, 22,000 square employees and create 12 new jobs. www.beavercountyced.org foot facility features innovative teaching environments, including CED also approved a $123,000 Shell Chemical Appalachia LLC an outdoor “Emergency Response loan and recommended PIDA made a final investment decision Safety Town,” a mock neighbor- approve an additional $123,000 to build an ethylene cracker with a hood of mini-homes and businesses to Standard Horse Nail, Co., LLC polyethylene derivatives unit in Pot- complete with underground utilities in New Brighton, a manufacturer ter Township. The complex will use and meters where instructors can of machine “Woodruff” keys, taper ethane from shale gas to produce create and control various emer- pins, and other precision fasten- 1.6 million tons of polyethylene gency training scenarios. ers. This $290,000 project will per year. With the site’s proximity convert unused warehouse areas to gas feedstock, the complex, and The Beaver County Corporation into manufacturing space for a its customers, Shell will benefit for Economic Development (CED) new technology to be used in the from shorter and more dependable approved financing for Creekside company’s production process, supply chains compared to supply Springs, LLC, who will invest over retaining 22 jobs and the creating from the Gulf Coast. Up to 6,000 $1 million in New Brighton. CED 10 new positions. workers will be employed during approved a $250,000 loan and rec-

www.developingpittsburgh.com 75 in the works in Cranberry Township in VA facility that would create a zone Butler County the 25,000 square foot range includ- to allow for professional offices, data Community Development Corporation ing a Cochran Collision Center, Planet processing, educational institutions of Butler County Fitness, Urban Air, and a Goodwill and other specific enterprises. Future 112 Hollywood Drive #102 store. Sterling Properties is proposing POS, a technology company that Butler, PA 16001 an 81,000-square-foot warehouse and produces point-of-sale software for the 724-283-1961 (T) distribution center for Marshall Road. restaurants, is in the planning stage 724-283 3599 (F) If built, the warehouse and distribution for a 40,000 square foot headquarters Ken Raybuck, Executive Director center would be leased to one or more to be built along Route 8 in Center [email protected] businesses. Township. www.butlercountycdc.com Jackson Township along route I-79 The CDC is managing construction of Butler County construction growth is continues to see growth with plans for a 230-space parking garage that will occurring in all areas, including the a 14 duplex homes on 4 acres on Old serve the Springhill Suites Hotel and completion of the $4.2 million Freeport Little Creek Road in Harmony Place. other businesses. The new 76-room School sports stadium in the south and Jackson Crossing will have 107 homes Marriott Springhill Suites in downtown Slippery Rock University in the north, built in three phases. The 350,000 Butler is well underway. CDC is also where they expect this summer’s work square foot Fed Ex off Route 528 in working with Butler County Tour- will top $10 million. Jackson Township is nearing comple- ism on the planned Kaufman House tion and nearby an additional 42-acre renovation in Zelienople, planned for The most concentrated area of development was recently recom- opening in 2017. CDC is working with development is in the southwestern mended by the township planning Butler County Commissioners on plans part of the County near the turnpike commission for a hotel, restaurant, to renovate the existing government and route I-79. Cranberry Township is convenience store and office space. center and build-out space on the continuing to see hotel growth includ- The Buncher Company continues to second floor of the new government ing a Best Western Plus (101 rooms), plan for growth at its Jackson’s Pointe center annex. to be built at Cranberry Springs Drive; development, and recently submit- a Marriott Town Place currently under ted plans for phases three and four, CDC is currently working with two construction at Cranberry Springs (96 which will include retail development. manufacturers who are considering rooms); and construction is underway Jackson Township is just east of Beaver new buildings at its Pullman Center on the 122 room Wood Springs Hotel County where the new Shell Cracker Business Park Expansion in Butler. on Wisconsin Ave. plant is being built. For information on land available at Pullman and the Victory Road Business In addition to hotels, Cranberry Town- One of this year’s top 10 construction Park in Clinton Township, contact Ken ship continues to grow in residential, projects in the region includes Center Raybuck at Community Development commercial and retail space. A 300- Township’s new 168,000 square foot of Butler County for information: 724 room apartment building, to include VA Butler Healthcare facility. Earlier 283 1961. CDC also has a link for all parking garage and pool is planned for this spring the township supervisors known available sites and buildings the village of Cranberry Woods. Nu- approved the creation of an economic in Butler County at www.butlercoun- merous new construction projects are resource overlay district nearby the tycdc.com

Most recently, Fay-Penn completed Fay-Penn is also constructing an upscale Fayette County Phase I of the Dunbar Township Busi- business event center here to host up Fay-Penn Economic ness Park and held a ribbon cutting to 70 attendees for workshops, confer- Development Council ceremony in July. Phase I provides 12 ences, and meetings. 1040 Eberly Way, Suite 200 pad-ready parcels on 92 acres. The Lemont Furnace, PA 15456 Park is geared toward light to heavy Fay-Penn is nearly complete with 724-437-7913 (T) industrial use, and provides highway renovations to a 24,000 square foot 724-437-7315 (F) frontage along Route 119, one of the VFW Building at the western gateway Bob Shark, Executive Director, bobs@ main North-South corridors through to downtown Uniontown. Fay-Penn faypenn.org the county. It also features rail access. invested $2.4 million to revitalize the Lori Scott, Business Support Coordina- Fay-Penn estimates that the Park can historic building, including construc- tor, [email protected] ultimately house 1,100 new jobs. tion of a second floor. PTC, a software www.faypenn.org development company, has signed a Fay-Penn’s University Business Park, 5-year lease to become the first oc- Fay-Penn Economic Development which is home to Fay-Penn headquar- cupant on September 1 in what is now Council is midway in its 25th anniver- ters and caters primarily to technology- the Fay-Penn Business Center, keeping sary year celebration. The organization oriented firms, is undergoing major 50 high-tech jobs in the central busi- is continuing its legacy of growing road upgrades this August. Within this ness district. Additional companies have the economy of Fayette County, Park, Fay-Penn is collaborating with expressed interest in becoming tenants Pennsylvania, and has been announcing Penn State Fayette – The Eberly Campus once the Center is open. the results and prospects of various (adjacent to the Park) to launch the projects. county’s first business accelerator.

76 DEVELOPINGPITTSBURGH | Fall 2016 During the first half of the year Fay- impacted by the decline of the coal renamed Orville and Ruth Eberly Work- Penn closed three business loans in the industry, and to assist them in enter- force Development Scholarship Fund. amount of $523,000, impacting 51 ing new markets for their products. Fay-Penn opened this fund in 2014 jobs either being created or retained. Catalyst’s project is part of its overall and plans to grow it until its proceeds Additional loan projects closing soon Partnerships for Opportunity and can provide approximately $10,000 in total $362,000, and several others are Workforce and Economic Revitalization annual scholarships to Fayette County in various stages of development. (POWER) strategy, with $400,000 in residents pursuing technical or trade funding to date coming from the Ap- career education. In business support activity, Fay-Penn palachian Regional Commission. continues to meet with local companies Although Fay-Penn's efforts are broad to better understand and address their Fay-Penn’s workforce development in scope, we focus on bringing the needs. Eleven businesses have been efforts were highlighted by $50,000 in highest economic benefit return to visited to date in 2016. As an offshoot recent contributions to its scholarship our community. Since its inception in to this effort, Fay-Penn is supporting fund. The Eberly Foundation and the 1991, Fay-Penn has helped to create Pittsburgh’s Catalyst Connection to Community Foundation of Fayette and retain over 9,000 jobs and generate identify Fayette County manufacturers County gave $25,000 each to the newly $1.5 billion in business investment.

Sheetz announced plans for a second Greene County Industrial Develop- Greene County operation in Waynesburg along SR 21. ments, Inc. and Greene County Office Greene County Industrial of Economic Development started a Developments, Inc. A local township announced plans to new out-reach program to meet with 300 EverGreene Drive construct a new municipal building. all manufacturing businesses within the Waynesburg, PA 15370 Two local companies had construction county to promote growth and diversifi- 724-852-2965 (T) plans approved for building expansions. cation of the economy. 724-852-4132 (F) Vantage Energy bid and received the gas Don Chappel, Executive Director rights to Alpha Natural Resources gas Both Greene County economic develop- [email protected] rights through a bankruptcy proceeding. ment agencies partnered with Catalyst www.gcidc.org Connection, University of Pittsburgh In- Greene County has seen some slow- Emerald Mine and Cumberland Mine stitute for Entrepreneurial Excellence and downs in natural gas drilling and the coal UMWA employees both approved a several others and received a $400,000 mining industry. However, that has not new five-year contract. Greene County POWER Grant through the U.S. Economic overshadowed projects that saw advanc- Memorial Hospital Foundation held a Development Administration to enable es in energy storage, gas compression ground breaking for their new $60,000 and begin a long-awaited partnership facilities and a power generation project. square foot recreation center in Ever- to boost manufacturing and provide job Greene Technology Park. development opportunities for struggling Other plans that began or moved communities whose livelihood once was forward in the first half of 2016 include: based on coal mining.

The daylong tour began at the National Ruppersberger went on to say, “In order Indiana County Center for Defense Manufacturing and for Indiana County to be successful in Indiana County Center for Machining (NCDMM) headquarters in attracting business investment that will Economic Operations the Corporate Campus business park in create and retain jobs, a robust inventory 801 Water Street Burrell Township and concluded at the of business parks and pad-ready sites, as Indiana, PA 15701 Windy Ridge Business & Technology Park well as other incentives, such as Keystone 724-465-2662 (T) in White Township. The tour also visited Opportunity Zone (KOZ)-related programs 724-465-3150 (F) the Interchange Center, 119 Business Park, must be on the docket. These create a Byron G. Stauffer, Jr., Executive Director 280 Indian Springs Road, Indiana Regional level playing field in terms of being com- [email protected] Medical Center (IRMC), Kovalchick Con- petitive in the Pittsburgh region, as well www.indianacountyceo.com vention & Athletic Complex, 3-Ring Realty as globally. The Indiana County Center for (former Fisher Scientific Co.), TROIKA Economic Operations team has done an On July 14th, the Indiana County Center (former Gorell Window & Doors), Indiana excellent job of acquiring strategic sites for Economic Operations hosted David University of Pennsylvania (IUP) Campus, and preparing them for investment.” Ruppersberger, President of the Pittsburgh downtown Indiana and the Indiana Regional Alliance (PRA), and an affiliate County Jimmy Stewart Airport/Air Park. Complete details about economic of the Allegheny Conference on Com- development efforts in Indiana County are munity Development. Mr. Ruppersberger “Businesses considering investment in our available at www.indianacountyceo.com. was joined by his team of economic region – location or expansion – have a development marketing professionals for large menu of options here because of a familiarization (FAM) tour of Indiana the region’s large footprint and its diver- County arranged by Byron G. Stauffer, Jr. sity. We’re 10 counties, but one region of and his staff at the Indiana County Office opportunity,” said Ruppersberger. of Planning & Development.

www.developingpittsburgh.com 77 Zone dollars to help fund the $100,000+ in Enterprise Zone tax credits and a Multi- Lawrence County project involving the acquisition of a Modal Grant from the Commonwealth of Lawrence County Economic new facility, renovation and equipment PA in the amount of $204,615 to assist Development Corporation purchases. Owners Patti and Keith Kuhn with rail line construction. 100 East Reynolds Street hope to be up and running at the new Plaza South, Suite 100 location in October of this year. Steve Caldararo, owner of Nick’s New Castle, PA 16101 Autobody, in New Castle, has recently 724-658-1488 (T) The LCEDC was recently awarded a completed construction of a new paint 724-658-0313 (F) $200,000 matching grant from the Appa- facility located near his headquarters on Linda Nitch, Executive Director lachian Regional Commission (ARC) that Mill Street. The company is a full service [email protected] will complete the Corporation’s 50,000 collision, painting, and mechanical repair www.lawrencecounty.com square foot, multi-tenant facility at the facility, recognized as an I-CAR (Platinum) Millennium Technology Park. The monies facility. The $400,000 project is partially The second annual Lawrence County will help build out the second bay includ- funded by the Lawrence County Enterprise Impact Awards, celebrating businesses in ing office space and the installation of Zone Revolving Loan program. our county that have made a significant HVAC. Steelite International, a warehouse impact in our community, is scheduled for distribution facility for the tableware firm, Earlier this year, Penn Power embarked on Thursday, August 29, 2016. This year’s now occupies both halves of the building. a large-scale project here in New Castle to event will be held at the New Castle build a transmission line from their Grant Country Club and will honor Nick’s Auto Ben Weitsman of New Castle recently Street substation to the Hillcrest Avenue Body, First Energy, Posies by Patti, New opened doors at its downtown location on substation. This project has been at least Castle Tool and Die and Dairy Farmers of May 7, 2016. The company constructed three years in the works that involved America. all new buildings, equipped the facility completion of an engineering plan, with new equipment and fully paved and establishing a right of way and, finally, The Lawrence County Economic Devel- landscaped the entire yard to operate construction. Once completed, the line opment Corporation (LCEDC) and the their brand new shredder serving a full, will give extra reliability to many custom- Borough of Ellwood City recently teamed nonferrous downstream and retail scrap ers in western Pennsylvania, including up to complete a financing package for metal recycling facility. The LCEDC as- (UPMC) Jameson Hospital. Ellwood City based flower retailer, Posies sisted the company in obtaining $500,000 by Patti. Both entities utilized Enterprise

DEVELOPED SITES QUALIFIED WORKFORCE STRATEGIC LOCATION

Westmoreland County WestmorelandCountyIDC.org 724-830-3061

78 DEVELOPINGPITTSBURGH | Fall 2016 redevelop the Washington Trust Building. This full-depth reconstruction project for five miles Washington County project involves construction of a two story, of Interstate 70 between the East Beau Street Washington County Chamber 74-car parking garage as well as renovation (Route 136) and Eighty Four Interchanges. of Commerce of floors two through ten in the annex tower 375 Southpointe Boulevard #240 to accommodate 24 one-bedroom residential The newly launched American Petroleum Part- Canonsburg, PA 15317 units. Commercial use in the original six-story ners, LLC located in Southpointe, has recently 724-225-3010 (T) building and on the ground floor of the annex entered into a business partnership with Apollo 724-228-7337 (F) will be retained. A $467, 675 infrastructure Global Management LLC, which will be able Jeff Kotula, President project is also underway to improve numerous to provide up to $800 million in private equity [email protected] storm water management systems throughout investment for exploration and production in www.washcochamber.com the City of Washington. the Marcellus and Utica Shales. Washington County continues to develop and First Energy’s subsidiary, Allegheny Line Co. Southpointe Town Center announced two expand its economy and business community will invest tens of millions of dollars to build recreational facilities, Faster Fitness and Athlete with several significant projects. Retal Group a static Var compensator substation in Smith Performance Training Facility and Barre3 that proudly announced that they are opening Township to meet the anticipated demand features a mix of ballet movements, yoga and their first manufacturing facility in the United from midstream natural gas production Pilates classes. States in the Donora Industrial Park. Retal PA, facilities and to reinforce the grid for existing LLC acquired a 143,225 square foot facility customers. The Pittsburgh Veterinary Specialty & Emergen- where they will manufacture plastic preforms, cy Center broke ground for a 13,000 square high density lids and closures for the food and Additionally, DreBo America is planning a $2.1 foot, $5 million facility in North Strabane beverage industry. million project to double the size of its packag- Township. The facility will employ about 60 ing and distribution center, which will lead to people and offer emergency services, internal Mylan announced expansion plans for the 20 new jobs in California Technology Park. medicine services and surgery to animals. company. They are adding a parking garage to their headquarters in Southpointe to expand Four major transportation projects are in Housing is up and coming within the com- their campus with 1,035 more parking spaces. progress on Interstate 70. The westbound side munity with nearly 700 units in various stages In addition to the parking garage, they plan of the $51 million project to build a diverging of construction at three mixed-use projects. In to add a five story, 180,000 square foot office diamond interchange at the Murtland Avenue addition, NVR is proposing a 126-acre housing building and a pedestrian bridge to connect and Route 19 interchange, the reconstruction development in Cecil Township, consisting of to their existing administrative building. The of the Centerville/Monongahela interchange 125 single family dwellings, 124 single family building project should be completed by 2018. and the reconstruction of the Ginger Hill/ attached townhomes and 42 single family Bentleyville interchange are all underway. Pre- attached duplexes. Improvements in the City of Washington in- liminary work has begun on the $100 million clude Trek Development’s $11 million project to

updates and more information. In May, the Exel Inc. - The developer began construction Westmoreland County WCIDC reached a settlement agreement with Zion on Philips Respironics’ new 260,000 square Westmoreland County Industrial Bullitt Avenue LP concerning the former Jeannette foot distribution center on a 44-acre parcel in Development Corporation Glass Plant property. As part of the agreement, Westmoreland Distribution Park North, East 40 North Pennsylvania Avenue #520 Zion will turn over the deed to the blighted Huntingdon Township. Construction is expected Greensburg, PA 15601 13-acre property purchased by the WCIDC at to be completed within the second half of the 724-830-3061 (T) a tax sale in 2012. Before redevelopment can year. 200 jobs are projected. 724-830-3611 (F) begin, the property will be accurately assessed for Jason W. Rigone, Executive Director environmental and safety issues. JD Oliver, LLC – The real estate company [email protected] purchased a 6.55-acre parcel in Westmoreland www.co.westmoreland.pa.us Also noteworthy developments: Alcoa Inc. – The Airpark, Unity Township. A 25,000 square company opened a 3-D printing metal powder foot truck service and parts facility is planned Westmoreland County has seen strong economic production facility at its Alcoa Technology Center for the site, and will be leased to Freightliner development growth in terms of expansions and in Upper Burrell. The facility is part of a $60 mil- upon completion. 30 jobs are projected. This is attraction projects in 2016. As part of the ongoing lion expansion project announced last September. Freightliner’s second expansion in the County’s revitalization efforts in the City of Jeannette, de- 100 jobs are projected. industrial park system in the last two years. molition of the former Monsour Medical Center, located at the County gateway fronting US Rt. Donegal Real Estate Development, LLC ¬– Ap- Tenaska – The energy developer began site work 30, has been completed. Site work continues proximately 8.13 acres in Westmoreland at their 134-acre parcel in South Huntingdon and Phase II is expected to begin in early fall. By Technology Park II, Hempfield Township, was Township. The site will be the future home of the end of the fourth quarter, the Westmoreland optioned by the company. They represent Donegal Tenaska Westmoreland Generating Station, County Industrial Development Corporation Construction Corporation, which will utilize the a state-of-the-art electric generating facility. (WCIDC) will invite developers to submit RFP’s property for a newly constructed administrative Estimated construction cost is more than $500 for commercial development possibilities at the headquarters along with a repair facility and million. More than 300 jobs are projected during 3.7-acre developed site. Please visit our website, associated yard area for their milling operations. construction and 25 permanent jobs during www.westmorelandcountyIDC.org for project 30 jobs are projected. operation.

www.developingpittsburgh.com 79 Project7_Layout 1 2/12/15 3:11 PM Page 1 People & Events

JLL’s Jackie Bezek and Adam Viccaro from CBRE cut two-by-fours for NAIOP Developing Leaders’ volun- teer day with Habitat for Humanity on June 11.

(From left) HFF’s Mark Popovich, Wesbanco’s John Fetsko and Jim Scalo from Burns & Scalo Real Estate Services were presenters at NAIOP Pittsburgh’s annual finance update.

www.developingpittsburgh.com 81 (Left-to-right) Guardian’s Christina Bucciero, Christi Neroni from Agency Assist Outsource Solutions, Julie Kline from Strassburger McKenna Gutnick & Gefsky PC and Terri Sokoloff from Spe- cialty Bar & Restau- rant at the CREW/ NAIOP Pittsburgh Clay Shoot.

(From left) Tony Pitassi from PWWG Architects, Scott Rowland from Langan Engineering, Nate Phillips from Chap- man Properties and Langan’s Ben Hunter.

82 DEVELOPINGPITTSBURGH | Fall 2016 St. Clair Hospital Outpatient Center, IKM Architects AIA Design Pittsburgh 2013 People’s Choice Awards Photo by Massery Photography

We Are Building

412-942-0200 [email protected] www.volpatt.com

Delivering quality construction since 1991 in the institutional, industrial and commercial market.

Your Site. Our Team.

3D Laser Scanning Land Surveying Due Diligence Site Development Civil Engineering Structural Engineering

Pittsburgh | Chicago | LA | Milwaukee rasmithnational.com (412) 828-7604

www.developingpittsburgh.com 83 B&G Breaking Ground Ad:Layout 1 7/2/14 11:58 AM Page 1

Real Estate I Construction I Manufacturing P. 412-227-2500 • F. 412-227-2050 www.BlumlingGusky.com

Chuck Chiatto from BB&T, with Megan Zillweger-Jones and Dan Puntil from Granbridge and Charles Krushan- sky from Newmark Grubb Knight Frank (right).

Project success. It’s what our clients do. It’s what we do.

(From left) LLI Engineering’s John Shaginaw, Michael Haberman from Gateway Engineer, Jamie White and Regis Etzel from Etzel Engineer Builder.

DLA+ A UNIQUE APPROACH TO ACHIEVE YOUR UNIQUE VISION

Minimize risk. Maximize results.

Jim Scalo(left), RIDC’s Don Smith and Newmark Grubb’s Lou Oliva (right) at NAIOP Pittsburgh’s annual golf outing. Architecture interior Design PlAnning consulting

www.DLApLus.com Pittsburgh 412-921-4300

connect with us: @DlA_Plus linkeDin.com/comPAny/3017087 DlAPlus.com/blog Chapman’s Nate Phillips (left) and Martin Taube with Menard USA at NAIOP’s golf outing.

84 DEVELOPINGPITTSBURGH | Fall 2016 Environmental Management and Site Development Engineering

Speaker Doug Herold from Integra Realty Resources (left) with NAIOP President Brian Walker, from Millcraft Industries.

Innovative Solutions Outstanding Support

22 S. Linden St. | Duquesne, PA 15110 | 412.469.9331 www.kuresources.com

Joe Chaffin from Michael Baker International with Turner’s Drew Kerr (right).

Building Your Success

Grandbridge provides commercial and Our scope of services includes: (From left) Jessica Jarosz from Century Realty, At- multifamily finance solutions through n Insurance Companies torney Holly Forsberg, Robin Alexander from Bank of a wide range of capital sources America, Robin Zoufalik from Pieper O’Brien Herr and n Banks In 2015, Grandbridge’s Pittsburgh Office closed Kimly Vu Gianoutsos from McGuire Woods. n Pension Funds loans totaling more $91.4 million – working with ® n Freddie Mac Program Plus our clients to meet their financial goals and ® ensure their success. n Fannie Mae DUS n FHA-Insured MAP and LEAN At Grandbridge, we connect you with the right source of funding – creating a personal, n CMBS Investors successful approach for each transaction. n BB&T Real Estate Funding – Structured Finance – Stabilized Fixed-Rate Finance CONTACT US n Capital Markets Dan Puntil, Senior Vice President – Taxable and Tax-Exempt Financing Two Gateway Center – Credit Facilities 603 Stanwix St., Suite 1899 Pittsburgh, PA 15222 Rachel Pagone from Babb, Copasec’s Julia Poepping, 412.391.3366 Grandbridge.com Andrea Geraghty from Meyer Unkovic & Scott David For- restall from SecurIT360 and CardConnect’s Brett Fishe. Loans are subject to credit approval. Equal Housing Lender.

www.developingpittsburgh.com 85

Coming to Lawrenceville 2017 Arsenal Terminal Phase One

Rebecca Williams from Kimball Office, with LGA Partners’ Paulette Burns, Jonathon Glance and Mary Rose Hopkins, Cindy Nielsen and Autumn Harris from Century Equities (seated).

243 units / retail / parking ______TRYP Hotel

First Commonwealth’s John Clingan (left) and Brian Pukylo at NAIOP Pittsburgh’s golf outing.

Former Washington Education Center ______

Square View Apartments

12 apartments / retail

Joshua Fye from Farmers National Bank of Emlenton and Ed Lantz Commercial General Contractor from Appraisal Nation (right). www.franjo.com

86 DEVELOPINGPITTSBURGH | Fall 2016

Allegheny County Economic Development (ACED) is the county’s lead economic and residential development agency.

Our six authorities assist manufacturers, businesses, municipalities, health care facilities, nonprofits, and homeowners with funding for land development, improvements, acquisitions, expansions, and renovations:

Redevelopment Authority for Industrial Authority of Allegheny Improvements in Development County (RAAC) Municipalities (AIM) Authority (IDA) •Assists new and •Assits local •Assists expanding businesses municipalities with manufacturers, with grants and low- capital needs and nonprofits, and interest loan improvement developers. programs. projects. •Provides financing for •Tax incentives and tax •Low interest funding land aquisition, exempt financing. source for projects construction, •Vacant Property such as sewer renovation and Recovery Program. systems, bridges, equipment roads. purchases.

Higher Education Hospital Development Residential Finance Building Authority Authority (HDA) Authority (RFA) (HEBA) •Assists hospitals, •Tax-exempt financing •Financing or health care centers, for colleges, refinancing of costs personal care universities, and for the acquisition, facilities, nursing other higher learning renovation or homes, and others. institutions. improvements of •Tax Increment •Reduced interest projects. Financing (TIF). rates on loans for •Assistance with low- •Tax exemptions. developers. interest, fixed-rate mortgages and closing costs. •First-Time Homebuyer Program.

To learn more about how ACED can support you and your project, visit www.alleghenycounty.us, or contact us at 412-350-1000.

We look forward to partnering with you.

Robert Hurley, Director

LANDAU BUILDING COMPANY Allegheny County Economic Development RELATIONSHIPS I REPUTATION I RESULTS One Chatham Center • Suite 900 • 112 Washington Place • Pittsburgh, PA 15219 Phone (412) 350-1000 • 724-935-8800 I www.landau-bldg.com www.alleghenycounty.us/economic/

www.developingpittsburgh.com 87 DEVELOPINGPittsburgh 2016 Buyer’s Guide! LOOKING FOR AN ARCHITECT, ENGINEER, ARCHITECTURE | INTERIORS | PLANNING CONTRACTOR OR LENDER? THE 2016 NAIOP BUYER’S GUIDE LISTS DOZENS OF FIRMS FROM AROUND THE REGION THAT CAN FIT THE BILL. lga-partners.com Architect...... 89 ASA Specialty Contractors ...... 90 Civil Engineer...... 90 From Concept Contractor...... 91 Developer...... 91 to Completion Document Handling ...... 92 Economic Development...... 92 Engineer...... 92 Environmental...... 93 ERIE 1001 State Street Finance...... 93 Suite 1400 Erie, PA 16501 Geotechnical Engineer...... 93 T 814.451.1172 Alphabet City® Center F 814.451.1150 Industry/Trade Association...... 93 PITTSBURGH Insurance...... 93 707 Grant Street From predevelopment support to long-term Suite 1920 lending, Bridgeway Capital has the financing Interior Designer...... 94 Pittsburgh, PA 15219 tools to strengthen real estate development T 412.201.2450 F 412.201.2451 projects with lasting community impact. Land Surveyor...... 94 UNIONTOWN Landscape Architect...... 94 2 West Main Street Suite 135 Uniontown, PA 15401 For more information contact: Legal Services...... 94 T 724.425.0330 Dwayne Rankin | Team Leader – Loan Officers & F 724.425.0332 Community Development Loan Officer Owner Representative...... 94 412.201.2450 x 128 | [email protected] Professional Services...... 95 bridgewaycapital.org Real Estate Broker...... 95

88 DEVELOPINGPITTSBURGH | Fall 2016 Architect DLA+ Architecture & Interior Design Folster Plaza, Suite 200 750 Holiday Drive Pittsburgh, PA 15220 Perfido Weiskopf Wagstaff + Goettel HHSDR Architects/Engineers 408 Boulevard of the Allies www.DLAplus.com 40 Shenango Avenue Pittsburgh, PA 15219 Kari Miller Sharon, PA 16146-1502 T: 412.391.2884 CH2M [email protected] 400 Industry Drive, Suite 100 130 7th Street, 201 Century Bldg. F: 412.391.1657 Pittsburgh, PA 15275 DLA+ is a full service architecture and interior design Pittsburgh PA 15222-3413 www.pwwgarch.com T: 412-249-6495 firm dedicated to providing Strategic ArchitectureSM T: 800-447-3799 Alan Weiskopf, Managing Principal F: 412-269-5425 solutions through a collaborative and integrated T: 412-281-2280 [email protected] approach to delivering projects for our clients in www.hhsdr.com www.idcarchitects.com PWWG offers architecture, planning, and urban design Jeff Murray, FAIA, LEED AP Corporate/Commercial, Higher Education, Sports, Andreas Dometakis Government, Healthcare, and Retail/Hospitality. We [email protected] for projects in multi-family housing; education and [email protected] technical training; and the rehab, preservation, and Mark Witouski, CPSM are committed to delivering not only a technically Frank Gargiulo successful project, but also one that includes sound [email protected] adaptive reuse of historic structures. Our award- [email protected] principles of sustainable design intended to serve the winning design work also includes hotels, parking HHSDR has been Building Relationships with our structures, theaters, and commercial operations. For CH2M (formerly IDC Architects) is a world leader in client and the community well into the future. Fueled clients since 1953. We are regional leaders in design high-performance building design committed to by a creative and talented team, our once two person 39 years, from our studios in downtown Pittsburgh, and construction contract administration, with a port- we have assisted owners with detail-oriented imaginative sustainable workplace, research and firm has grown to 30 people in a matter of six years folio of projects sized from a few hundred to 400,000 industrial facilities. We have developed a portfolio earning us a spot as one of the “100 Fastest Growing service, from early explorations, to coordinating square feet. We deliver design solutions through multi-disciplinary teams of engineers, to construction of design excellence and technical quality in build- Companies in Pittsburgh” two years in a row and the traditional design-bid-build techniques as well as ings and spaces that inspire human innovation and INC 5000 Fastest Growing Companies in the United management and LEED commissioning. PWWG is also design-build. Ranked annually by the Pennsylvania expert in code and zoning compliance, feasibility and enhance performance. CH2M’s Pittsburgh office has a States three years in a row. Builders Exchange as the most active firm in the tri- global reach providing a full range of services includ- space programming, historic tax credit applications, state region, we earn our clients’ trust by providing community outreach, and 3D visualizations. ing planning, architecture, engineering, and interior high-quality and responsive service. design for demanding projects requiring innovative design solutions. Our multidisciplinary design teams integrate art, technology and human imagination to create architecture embodying the spirit of those it serves. DRS Architects, Inc. One Gateway Center, Seventeenth Floor Pittsburgh, PA 15222 T: 412-391-4850 F: 412-391-4815 Renaissance 3 Architects, P.C. www.drsarchitects.com 48 South 14th Street Pittsburgh, PA 15203 Kathryn A. Jolley, MBA, ASID, LEED AP IKM Incorporated [email protected] T: 412-431-2480 One PPG Place www.r3a.com Designing for the future, DRS Architects continues to Pittsburgh, PA 15222 provide innovative and creative architectural solutions Deepak Wadhwani Design 3 Architecture PC T: 412-281-1337 [email protected] as we have for nearly 60 years. We listen carefully F: 412-281-4639 300 Oxford Dr. Ste. 120 At R3A we believe that successful design shapes to our clients’ needs and develop customized respons- www.ikminc.com Monroeville, PA 15146 environments that actively engage the senses and es to each design challenge. We provide architecture, Joel R. Bernard, AIA, NCARB, LEED AP T: 412-373-2220 facilitates positive human interactions and behaviors, interior design and master planning services through Principal www.d3a.com while employing technologies that help improve the the varied markets of higher education, laboratories, [email protected] William Snyder health and wellness, government, hospitality, and performance of our daily lives. R3A is a 23-person firm IKM Incorporated has been providing architecture, [email protected] corporate offices. Our talented design teams work to with two principals, supported by an experienced planning and interior design services to corporate and Design 3 Architecture has been offering architecture, develop exemplary projects which enrich daily life, and creative team of architects, interior designers and institutional clients for 100-years. IKM’s mission is to planning, and interior design services to the Pitts- improve communities, advance a sustainable future project managers. R3A provides a full range of archi- provide innovative and informed architecture that burgh region since 1982. We view inherent project and promote design excellence. tectural, interior design, planning services. We pride constraints as potential opportunities for innovative positively impacts the world through leadership in ourselves in being uniquely qualified to respond to the design solutions. With a philosophy grounded in team understanding, exploration and decision making. IKM increasingly diverse and complex facilities needs of collaboration, providing both personal attention and is a member of the American Institute of Architects our clients and their organizations. project leadership, Design 3 Architecture does more and the US Green Building Council. than solve problems. We provide solutions that are unique, exciting and affordable. Gerard Associates Architects 410 Fort Pitt Commons 445 Fort Pitt Boulevard Stantec Pittsburgh PA 15219 650 Smithfield Street # 2500 T: 412-566-1531 Pittsburgh, PA 15222 www.gerardassociatesarchitects.com T: 412-394-7000 Dawn Danyo DiMedio, AIA, LEED AP BD+C www.stantec.com [email protected] George Halkias, AIA, LEED, AP A Woman Owned Business providing architecture, [email protected] planning, interior and environmentally responsible Alicia Wolfe, NCIDQ Cert., LEED AP design services to a full range of commercial clients [email protected] since 1959. The firm commits itself to understanding Stantec unites approximately 22,000 employees in projects completely, developing working relationships over 400 locations. We collaborate across disciplines with clients and delivering projects that are techni- and industries to bring buildings, energy and resource, cally and aesthetically complete. Every project is given environmental, and infrastructure projects to life. principal attention. We believe this commitment to Our work— architecture, engineering, interior service yields superior design. design, landscape architecture, surveying, project management, and project economics, from initial project concept and planning through design, construction, and commissioning—begins at the intersection of community, creativity, and client relationships. Since 1954, local strength, knowledge, and relationships, coupled with our world-class expertise, have allowed us to go anywhere to meet our clients' needs in more creative ways. www.developingpittsburgh.com 89 Overhead Door Company of The Gateway Engineers Greater Pittsburgh 400 Holiday Drive #300 400 Poplar Street Pittsburgh, PA 15220 T: 412-921-4030 VEBH Architects Pittsburgh, PA 15223 R.A. Smith National, Inc. T: 412-781-4000 Ext. 216 F: 412-921-9960 470 Washington Road 333 Allegheny Avenue, Suite 202 F: 412-781-2446 www.GatewayEngineers.com Pittsburgh, PA 15228 Oakmont, PA 15139-2072 www.overheaddoorpittsburgh.com Ryan L. Hayes, Director of T: 412-561-7117 T: 412-828-7604 Jason Henze Business Development www.vebh.com F: 412-828-7608 [email protected] [email protected] Contact: Daniel Skrabski www.rasmithnational.com [email protected] From the time we invented the garage door in 1921 Gateway Engineers and its predecessors have played an John Frydrych, M.S., P.E. active role in the development of the Ohio Valley since VEBH Architects has been serving the communities Overhead Door has always produced and installed the [email protected] highest quality products. Our superior product crafts- 1882. Our incessant pursuit of project management of Southwestern Pennsylvania and beyond for more R.A. Smith National is a multi-disciplinary consulting manship and dedicated excellence in customer care has excellence has created strengths in municipal engi- than 65 years. We are passionate about creating engineering firm that is a leader in civil engineering made us the leader in door systems for diverse markets neering, consulting work, and all facets of private de- quality environments for our clients. Our designs for and site development, structural engineering and and customers around the globe. We offer the most velopment including the burgeoning energy industries. workplaces enhance client identity, offer increased land surveying. R.A. Smith National works with clients complete line of quality residential, commercial and The tradition of providing value-added engineering productivity, and deliver long-term value to a business, to deliver excellence, vision and responsive service. industrial upward-acting door systems. Our Red Ribbon solutions carries on as the company continues to grow. as well as the customers and the community it serves. Developers and governmental agencies take advantage trademark is your guarantee of receiving unequaled Gateway Engineers staff of registered professional en- We are committed to creating great places that inspire, of the diverse expertise and team collaboration that personalized service and expertise – from assistance gineers, surveyors, construction inspectors, and land- motivate, and ultimately enrich our region and the is incorporated in every project. The firm provides with product selection through the timely completion scape architects, along with qualified technicians, is communities in and around the places we call home. comprehensive services that include civil engineering, of product installation. ready to provide the expertise and personalized service which every project deserves. For more information, structural engineering, site development engineering, please visit the new GatewayEngineers.com. site planning, surveying, water resources engineering and 3D laser scanning. Offices are located in Oakmont (Pittsburgh), PA; Brookfield (Milwaukee), Madison and ASA Specialty Contractors Appleton, WI; Naperville (Chicago), IL; and Irvine, CA. Civil Engineer

Pennoni Associates Inc. 9 Foster Plaza, Suite 700 750 Holiday Drive Allegheny Mineral Corporation Pittsburgh, PA 15220 Red Swing Group One Glade Park T: 412-521-3000 x2778 Corporate Office: East Kittanning, PA 16201 www.pennoni.com 4154 Old William Penn Hwy, Suite 300 T: 724-548-8101 GAI Consultants, Inc. 385 E. Waterfront Drive John Skorupan Murrysville, PA 15668 www.alleghenymineral.com [email protected] T: 724.325.1215 Dennis C. Snyder, President Homestead, PA 15120 Pennoni is proud to be celebrating our 50th anniver- F: 866.295.5226 Mike Odasso, Vice President of Sales T: 412-476-2000 sary as a multi-disciplined consulting engineering Surveying & Telecommunications Office: [email protected] www.gaiconsultants.com Patrick M. Gallagher, and design firm. An ESOP company, Pennoni employs 3001 Jacks Run Rd, Suite 107 Allegheny Mineral Corp. provides crushed stone, indus- Assistant Vice President / Senior Director over 1,000 professional and technical personnel with White Oak, PA 15301 trial rock dust and agricultural lime to Pennsylvania, [email protected] 30 offices throughout the Mid-Atlantic States, Ohio, T: 412.678.4403 Ohio, and West Virginia. In 2014, the company was F: 866.295.5226 Transforming ideas into reality for over 50 years, North Carolina and Florida. Pennoni is a full-service listed as one of the 40th largest aggregate producers provider of Land Development, Landscape Architecture, www.RedSwingGroup.com in the nation. Our limestone product has provided a GAI’s teams of real estate and economic counselors, Matthew E. Smith, P.E. urban planners, engineers, environmental specialists, Structural Engineering, Surveying, Environmental, solid foundation for schools, churches, hospitals and Transportation, Geotechnical, MEP Design and Energy [email protected] family homes in and around our community. Allegheny surveyors, and landscape architects provide innovative, practical, and cost-effective solutions for all stages of & Sustainability. Locally, Pennoni has offices in Pitts- Red Swing Consulting Services views its Clients as Part- Mineral has been recognized for its efforts in areas of burgh, State College and Uniontown that service the ners; focusing first and foremost on building and safety, sustainability, community relations and indus- land development. Our award-winning land development portfolio includes large multi-use complexes, developer, industrial, transportation, education and maintaining strong relationships and trust. This mu- try contributions in the form of awards from state and the Marcellus Shale industry in Western Pennsylvania, tual trust is the foundation of a solid business federal agencies. retail centers, healthcare and educational campuses, residential communities, urban streetscapes, parks and Ohio and West Virginia. We promise to put all of our partnership. Red Swing offers Land Development Con- trails, marinas, and resorts. Distinguished in our com- passion, our knowledge and our skill into doing what- sulting Services to take a project from concept mitment to urban-infill, Greenfield, and brownfield ever it takes, every day, every time, for every project. through construction. Red Swing has experience in development, we help clients achieve their project Surveying, Civil Engineering, Infrastructure, Utility, goals. GAI brings projects from ideas to reality. Learn and Telecommunications Projects. Red Swing effec- more at www.gaiconsultants.com. tively maximizes the return on investment through a collaborative design approach, utilizing a low impact design philosophy that reduces project capital costs and produces the competitive edge that we and our partners demand.

90 DEVELOPINGPITTSBURGH | Fall 2016 Rycon Construction Inc. 2501 Smallman Street, Suite 100 LANDAU BUILDING COMPANY Pittsburgh, PA 15222 Burchick Construction Company Inc. 9855 Rinaman Road T: 412-392-2525 500 Lowries Run Road Wexford, Pennsylvania 15090 F: 412-392-2526 2 East Crafton Avenue Pittsburgh, PA 15237 T: 724-935-8800 www.ryconinc.com Pittsburgh, PA 15205-2804 T: 412-369-9700 www.landau-bldg.com Todd Dominick 341 Science Park Drive, Suite 205 www.burchick.com Jeffrey Landau, President [email protected] State College, PA 16803 Joseph E. Burchick [email protected] Rycon Construction, Inc. is a premier preconstruction, T: 412-921-3303 [email protected] Established over 100 years ago, Landau Building general contracting and construction management C: 412-491-6132 Burchick Construction is a full-service general contrac- Company (LBC) has become one of the premier firm with offices in Pittsburgh, Atlanta, Cleveland, and www.dewooster.com tor founded on the commitment to excellence that Joe family-owned and operated general contracting firms Ft. Lauderdale. An ENR Top 400 Contractor, Rycon spe- Chuck Wooster, President Burchick brings to each project the company under- in Western Pennsylvania. In 2006, Landau Building cializes in new construction, renovations and design- [email protected] takes. Burchick’s management approach is designed Company expanded its construction services to include build projects for owners of commercial, industrial, Since 1971, our firm has been a highly regarded and to ensure optimum results for our clients, setting the the northern West Virginia region when it created the institutional, multi-unit residential and governmental respected leader in the traffic engineering industry. performance standard for construction services. Our subsidiary Marks-Landau Construction. Now in its 5th buildings. Rycon’s stellar reputation for quality service We are most proud of our uncompromising integrity. executives and managers have broad-based experience generation, LBC continues to build strong RELATION- is built on a solid history of successful projects complet- Our goal is to guide our clients through the rigorous delivering construction to the highest standards, re- SHIPS with its clients by focusing on their need to build ed on time and on budget and an unwavering business process of real estate development and assist them by gardless of the client’s preference for delivery method. a safe, high-quality project on time and within budget. philosophy that puts customer satisfaction first. The correctly identifying on-site and off-site traffic impacts, Burchick’s project team and professional engineers Our commitment to integrity, honesty, and excellent results are return customers and impressive company develop cost effective and efficient mitigation strate- on staff are equally comfortable with a completed client service has built the solid REPUTATION we exhibit growth. The company has executed more than $2.5 gies, and seek and receive municipal and State DOT design or with providing pre-construction assistance every day and on every project. We deliver exceptional billion of work and currently Rycon’s revenues exceed approvals and/or permits. Our skills include: Traffic at the earliest stages of design. Burchick has managed RESULTS that exceed our client’s expectations for qual- $300 million. Engineering Studies, Highway Occupancy Permits, Traf- commercial, industrial and institutional projects from ity and service and make Landau Building Company fic Signal System Design, Roadway Design, Intersection $100,000 to $73 million with equal attention. Burchick their builder of choice. We welcome the opportunity to Design, and Parking Studies. Wooster also provides site Construction, setting the performance standard. be your builder of choice. design services. Developer Contractor

Restoring the Past Building the Future Jendoco Construction Corporation McKamish, Inc. 2000 Lincoln Road 55th & AVRR AdVenture Development, LLC A. Martini & Company Pittsburgh, PA 15235 Pittsburgh, PA 15201 111 E. Oak Street 320 Grant Street T: 412-361-4500 T: 412-781-6262 Selma, NC 27576 Verona, PA 15137 F: 412-361-4790 F: 412-781-2007 T: 919-965-5661 T: 412-828-5500 www.jendoco.com www.mckamish.com www.adventuredev.com www.amartinigc.com Domenic Dozzi Dave Casciani Kevin M. Dougherty Emily Landerman [email protected] [email protected] [email protected] [email protected] Located in Pittsburgh for over 50 years, Jendoco has When it comes to specialty mechanical contracting, Kevin Dougherty formed AdVenture Development, LLC Established in 1951, A. Martini & Co. is not just a gener- built a reputation for being a premier quality general McKamish sets the bar. The Commercial Construction in 2005. AdVenture Development focuses on com- al contracting and construction management firm – it contractor and construction manager with expertise Group at McKamish serves customers big and small in mercial real estate development projects and is actively is a family business that embodies the dedication, work in many facets of building construction. From renova- virtually all market segments, meeting their Mechani- involved in the acquisition, development, leasing and ethic and talent of three generations of the Martini tions, to restorations, to new construction, our team cal Contracting, Plumbing and HVAC needs. We excel at management and has also retained real estate consult- family. A. Martini & Co.’s size, history and work phi- of seasoned professionals has the experience and Pre-Construction and Design Assist/Build services. The ing assignments in Pennsylvania, Virginia, West Virginia losophy are specifically geared to offering experience, commitment to meet the challenges of your projects. McKamish Service Group thrives to optimize customer and North Carolina. Currently being developed in commitment and a partnering approach. A. Martini & We have experience with new construction, renova- investment in new and existing building systems. A Pittsburgh, PA is McCandless Crossing, a 1.2 million sf Co. provides construction management and general tion, historical restoration and preservation, research dedicated team of professional technicians, operating a mixed-use development. In the Raleigh, North Carolina construction services for multimillion dollar and facilities, hospitals and medical facilities, schools and fleet of vehicles, provide McKamish Service customers area a similar development , EASTFIELD, is planned. smaller projects for industry, retail, medical, entertain- universities, religious facilities, water treatment facili- with around-the-clock support. Please visit our website Kevin and his team are dedicated to exceeding their ment, corporate, residential, education and non-profit ties, multi-tenant residential, commercial, industrial, – www.mckamish.com – to learn more about us! clients’ expectations. Please visit our website at: clients. “We at A. Martini & Company believe that a true institutional, retail and sustainable construction. www.adventuredev.com to learn more. collaborative approach from preconstruction through final closeout is in the best interest of the owner. Our competitive stature and cost consciousness is apparent in both hard bid and negotiated contacts."

PJ Dick Inc. 225 North Shore Drive Pittsburgh PA 15212 T: 412-807-2000 www.pjdick.com Bernard J. Kobosky [email protected] PJ Dick – Trumbull – Lindy Paving is a Pittsburgh, PA based contracting entity providing building construction, highway, site, and civil construction and asphalt paving services. Since 1979, the companies have served a number of different owner groups including commercial, institutional, government and private equity developers. Consistently ranked among the nation’s top firms, the family owned group of companies is widely considered the region’s largest construction firm offering a variety of delivery systems utilizing superior expertise, equipment and innovation.

www.developingpittsburgh.com 91 Economic Development Engineer

Chapman Properties 100 Leetsdale Industrial Drive Leetsdale, PA 15056 Fay-Penn Economic T: 724-266-4499 Ambridge Regional www.chapmanprop.com Development Council 2301 Duss Avenue #1 1040 Eberly Way Civil & Environmental Steve Thomas Ambridge, PA 15003 Suite 200 Consultants, Inc. [email protected] T: 724-266-4661 Lemont Furnace, PA 15456 333 Baldwin Road Chapman Properties is a leading provider of quality www.AmbridgeRegional.com T: 724-437-7913 Pittsburgh, PA 15216 business facilities in Southwestern Pennsylvania. An Erica Loftus, Marketing & www.faypenn.org T: 800-365-2324 award winning commercial property development and Public Relations Manager Bob Stark, Executive Director www.cecinc.com management company based in Pittsburgh, Chapman [email protected] [email protected] Gregory P. Quatchak, P.E. designs, builds, and operates state-of-the-art business The Ambridge Regional Center is "Rail Served. Crane [email protected] parks with a concentration on regional distribution Fay-Penn Economic Development Council is on point Served. Customer Served.” Our 85 Acre, 22 Buildings Civil & Environmental Consultants, Inc. (CEC) is a com- and industrial projects. They are best known for their to grow and diversify the economy in Fayette County, and Over 1 million square foot Industrial Park offers: pany of professionals who provide integrated design redevelopment of the 2+ million square foot Leetsdale Pennsylvania. We’re the pre-eminent "1st stop shop" Warehouse, Distribution, Manufacturing, Lab & Yard and consulting services at all points in a property’s life Industrial Park, and are currently developing Chapman economic development organization in the county, Space. Convenient to all major roadways, and only 11 cycle. CEC’s industry experts offer a full complement Westport, a 2.6 million square foot master-planned providing comprehensive, second-to-none business miles from the future Shell cracker plant, our tenants of evaluation, technical and regulatory insight. Our mixed use business park located 3 miles from Pitts- development services through our staff and partners to enjoy direct access to Norfolk Southern Rail Co. service value lies in the practical knowledge senior leaders burgh International Airport on the Westport Road In- make clients more competitive in a global marketplace. as well as on-site maintenance and logistics services, contribute along with our broad skill-sets and desire to terchange of PA Turnpike 576, and Chapman Southport, We do “traditional” economic development – rental through our Con-Am Warehouse. Designations: Foreign advance our clients’ strategic objectives. We’re build- a 153-acre mixed use office park located on Racetrack space, pad-ready business park acreage, and financing Trade Zone, HUB Zone, Enterprise Zone, PA Act 2 ing trust and our reputation on a local level through Road in Washington County next to the Meadows Race- – but also provide innovative programming to sup- Clearance. personal business relationships while continually as- track and Casino and Tanger Outlet Mall. port entrepreneurs, develop leaders, and promote the business amenities of Fayette County. In our 25-year sessing our environmental and economic sustainability history, we’ve helped countless businesses to succeed. in the communities where we practice. Yours could be next! Document Handling Armstrong County Industrial Development Council Northpointe Technology Center II KU Resources, Inc. 22 South Linden Street 187 Northpointe Boulevard Duquesne, PA 15110 RI STT Freeport, PA 16229 T E T: 412-469-9331 T: 724-548-1500 Washington County Chamber F: 412-469-9336 www.armstrongidc.org of Commerce www.kuresources.com Michael P. Coonley, AICP 375 Southpointe Boulevard #240 Mark Urbassik Tri-State Reprographics, Inc. Executive Director Canonsburg, PA 15317 [email protected] 2934 Smallman Street [email protected] T: 724-225-3010 KU Resources, Inc. provides a full range of environmen- Pittsburgh, PA 15201 The Armstrong County Industrial Development Council F: 724-228-7337 tal management and site development engineering T: 412-281-3538 (ACIDC), established in 1968 is a private 501(c)(3) www.washcochamber.com services to industrial, commercial, and community- F: 412-281-3344 industrial development corporation. Identified as the Mary Stollar based clients. The firm specializes in brownfield rede- www.tsrepro.com lead economic development group within the County, Senior Vice President Economic velopment, environmental site assessment, economic DJ McClary, Director of Operations the ACIDC, along with its sister organization the Development revitalization assistance, regulatory permitting and [email protected] Armstrong County Industrial Development Authority, [email protected] compliance, remediation design and implementation, For 70 years, Tri-State has provided printing and docu- provides single-point-of-contact service for emerg- The Washington County Chamber of Commerce is the and environmental risk management strategies. The ment management to Architects, Engineers and Con- ing or expanding business and industry. Owners and largest business organization in Washington County firm’s engineering and environmental consulting capa- tractors. Today we utilize the latest in Online Planroom operators of four industrial parks, single use and multi- and the second largest chamber of commerce in South- bilities also include the areas of civil and geotechnical Services, Scanning / Printing in both Black &White and tenant facilities, the ACIDC works closely with existing western Pennsylvania. The Chamber focuses on eco- engineering, site development engineering, water Color. Level 3 Graphics, a division of Tri-State specializ- or prospective businesses to identify the right location. nomic and business development initiatives to expand resources engineering, mining and quarry services, ing in large format color, services the Sign, Advertising, They also provide financing assistance to companies the economy of Washington County and was one of the water quality monitoring, and air quality compliance and Display Markets. Our unique approach combined through government loan/grant programs and private first organizations to publically support the economic and permitting. with our product research and years of knowledge sector financial institutions. benefits and job creation potential of the natural gas enables us to continually present new possibilities to industry. Learn more at www.washcochamber.com. our clients.

LLI ENGINEERING 1501 Preble Ave, Suite 300 Westmoreland County Industrial Pittsburgh, PA 15233 Community Development Development Corporation Corporation of Butler County T: (412) 904-4310 Fifth Floor, Suite 520 www.LLIEngineering.com 112 Hollywood Drive #102 40 North Pennsylvania Avenue James D. White, PE, LEED AP Butler, PA 16001 Greensburg, PA 15601 [email protected] T: 800-283-0021 T: 724-830-3061 F: 724-283-3599 F: 724-830-3611 LLI Engineering provides mechanical, electrical, www.butlercountycdc.com www.westmorelandcountyidc.org architectural, commissioning, and structural engineer- Ken Raybuck, Executive Director Jason W. Rigone ing services. Since 1910, LLI Engineering has been [email protected] Executive Director consistently recognized for providing top-quality engineering design services. We specialize in commer- The Community Development Corporation of Butler [email protected] cial, critical facilities, education, healthcare, industrial, County (CDC) is the lead economic development orga- Founded in 1983 by the Westmoreland County Board infrastructure upgrades, green building design, energy nization in Butler County. The CDC is your first contact of Commissioners, the Westmoreland County Industrial conservation modifications, project engineering, and for economic development in Butler County. The CDC Development Corporation (WCIDC) implements a com- engineering estimates. Located in Pittsburgh, Pennsyl- works closely with you to identify the right location prehensive economic development strategy to promote vania, LLI Engineering has completed projects in over for your business. Available land includes 60 acres at growth in terms of job creation, economic output and a the Victory Road Business Park, with a KOZ designa- stable tax base for Westmoreland County. Through the 20 different states. tion, and 30 acres at the Pullman Center Business Park development of a county-wide industrial park system, Expansion. Initial lots at the Pullman site are priced as a responsive Business Calling Program and involvement low as $50,000 per acre. All utilities are at both sites. in public/private partnerships, WCIDC strives to foster The CDC also has financing available for real estate, business growth, resulting in job opportunities for the equipment, working capital and lines of credit. citizens of Westmoreland County. 92 DEVELOPINGPITTSBURGH | Fall 2016 Finance Geotechnical Engineer

ACA Engineering, Inc. IRONWORKER EMPLOYERS 2 East Crafton Avenue Dollar Bank 410 North Balph Avenue ASSOCIATION Pittsburgh, PA 15205-2804 Three Gateway Center Pittsburgh, PA 15202 Of Western Pennsylvania 341 Science Park Drive, Suite 205 401 Liberty Avenue T: 412-761-1990 Foster Plaza 9 State College, PA 16803 Pittsburgh, PA 15222 www.acaengineering.com 750 Holiday Drive, Suite 615 T: 412-921-3303 T: 412-261-7515 Thomas R. Beatty, P.G. Pittsburgh, PA 15220 C: 412-491-6132 www.dollarbank.com [email protected] T: 412-922-6855 www.dewooster.com David Weber ACA Engineering, Inc. is an independently owned www.iwea.org Chuck Wooster, President [email protected] and operated geotechnical and environmental engi- William C. Ligetti, Jr. [email protected] As your business changes, you'll need the flexibility to neering, materials testing and inspection firm with [email protected] Since 1971, our firm has been a highly regarded and respond to market opportunities by purchasing equip- offices in Pittsburgh, Mechanicsburg, and Laporte The IWEA is a Trade Association of Union Contractors respected leader in the traffic engineering industry. ment, expanding your facilities or increasing working PA, and Youngstown, OH. Our engineers, geologist, who work in all aspects of the Ironworking Trade within We are most proud of our uncompromising integrity. capital. Your credit needs will change as your business draftspersons, inspectors, and technicians provide the Construction Industry. We are a resource for all Our goal is to guide our clients through the rigorous grows, so your overall credit plan should address quality designs, engineering studies, surveys, and owners, developers and contractors who are looking process of real estate development and assist them by short-term demands as well as long-term growth. project management. Our senior staff has a combined for a qualified contractor with a well-trained work- correctly identifying on-site and off-site traffic impacts, Dollar Bank’s Business Banking Experts will work to experience of over 100 years in engineering, construc- force. Visit our website or call our office for additional develop cost effective and efficient mitigation strate- understand your business and assist you in achieving tion inspection, and laboratory testing. ACA maintains information. gies, and seek and receive municipal and State DOT your goals with the right financing for your needs. For an in-house laboratory that has been inspected and approvals and/or permits. Our skills include: Traffic more information, contact David Weber, Vice President accredited by AASHTO Materials Reference Laboratory, Engineering Studies, Highway Occupancy Permits, Traf- Business Lending. Cement and Concrete Reference Laboratory, and the fic Signal System Design, Roadway Design, Intersection U.S. Corps of Engineers. Design, and Parking Studies. Wooster also provides site design services. Master Builders’ Association of Industry/Trade Association Western Pennsylvania, Inc. 631 Iron City Drive Pittsburgh, PA 15205 Environmental First Niagara Bank, N.A. T: 412-922-3912 Commercial Real Estate www.mbawpa.org 11 Stanwix Street, 16th Floor Leading the Industry, Building the Region! Pittsburgh, PA 15222 The Master Builders’ Association represents the pre- T: 412-807-2834 ferred commercial contractor in our region. Collectively, www.fnfg.com the membership accounts for over 80% of the commer- KU Resources, Inc. Greg Boyd, VP cial construction in our area and the MBA contractors 22 South Linden Street [email protected] have built over 90% of the square-footage of LEED Duquesne, PA 15110 Kris Volpatti, FVP American Subcontractors certified buildings in the Pittsburgh region. With skilled T: 412-469-9331 [email protected] Association of WPA labor, superior safety services and the latest technol- F: 412-469-9336 With First Niagara you’ll find a perfect balance, a com- 565 Callery Road ogy, the MBA contractor is the best value. www.kuresources.com munity oriented bank offering personal attention, de- Cranberry Twp., PA 16066 Mark Urbassik livering customized solutions, and keeping current with T: 724-538-8227 [email protected] products and services required for any project. We aim F: 724-538-8227 KU Resources, Inc. provides a full range of environmen- to improve the quality of life of our neighbors in terms www.asawpa.org Insurance tal management and site development engineering of where they live, work and play. Today, over 70,000 Angie Wentz, Executive Director services to industrial, commercial, and community- neighbors live in apartments, over 60,000 people work [email protected] based clients. The firm specializes in brownfield rede- in facilities, over $3,500,000,000 in commerce flows ASA Western PA, the American Subcontractors As- velopment, environmental site assessment, economic through retail and hospitality projects all financed by sociation of Western PA, is a non-profit organization revitalization assistance, regulatory permitting and First Niagara. Work with one of our teammates – ben- dedicated to the representation and advocacy for the compliance, remediation design and implementation, efit from the consistent quality they deliver. subcontractor, specialty trade contractor, supplier and and environmental risk management strategies. The service provider business community; promoting an firm’s engineering and environmental consulting capa- equitable business environment through providing bilities also include the areas of civil and geotechnical professional education, networking opportunities, engineering, site development engineering, water government advocacy and influence throughout the resources engineering, mining and quarry services, construction industry. ASA was founded in 1966, our Simpson & McCrady LLC water quality monitoring, and air quality compliance 310-330 Grant Street | Suite 1320 chapter was established in 1989. ASA of Western PA and permitting. Pittsburgh, PA 15219 has been around for 26 years. Learn more about what PNC Real Estate ASA Western PA can do for your company by visiting T: 412.261.2222 [email protected] 249 Fifth Avenue our website or contacting the office. Pittsburgh, PA 15222 Simpson | McCrady is a boutique risk management firm www.pnc.com/realestate with a tailored approach to client management ser- Joe Pascarella, VP vices. Our firm prides itself on providing our client base T: 412-762-2672 with access to specialists in all areas of the insurance [email protected] industry including Commercial Insurance, Private Client PNC Real Estate is a leading provider of banking, Services, Employee Benefits and captive risk alterna- financing and servicing solutions for commercial real tives. We strive to go above and beyond taking care of estate clients. Our capabilities include acquisition, con- your insurance needs by providing risk management struction and permanent financing for developers and tools and solutions through our trusted vendors. As one Builders Guild of Western PA, Inc. of the largest personal and commercial insurance advi- investors; agency financing for multifamily properties; 650 Ridge Road, Suite 301 and debt and equity capital for the affordable housing sors in Pennsylvania, we have the expertise to handle Pittsburgh, PA, 15205 any account size anywhere in the world. industry. And, through Midland Loan Services, we T: 412-921-9000 provide third-party loan servicing, asset management www.buildersguild.org and technology solutions. Building trade unions and contractors working together to provide the best value in construction. Our 40,000 member workforce is professionally trained in the finest apprenticeship centers in the country. We understand the demands of the industry, are committed to customer satisfaction and are drug free. Today’s building trade unions are setting a new standard of www.developingpittsburgh.com excellence. Get to know us. 93 Interior Designer Landscape Architect

Meyer Unkovic & Scott 1300 Oliver Building Pittsburgh, PA 15222 T: 412-456-2800 Lennon, Smith, Souleret www.muslaw.com Engineering, Inc. W. Grant Scott 846 Fourth Avenue GAI Consultants, Inc. T: 412-456-2893 Coraopolis, PA 15108 385 E. Waterfront Drive [email protected] Design 3 Architecture PC T: 412-264-4400 Homestead, PA 15120 Patricia E. Farrell 300 Oxford Dr. Ste. 120 www.lsse.com T: 412-476-2000 T: 412-456-2831 Monroeville, PA 15146 Larry W. Souleret, P.E., P.L.S., M.ASCE www.gaiconsultants.com [email protected] T: 412-373-2220 Patrick M. Gallagher, [email protected] The Real Estate & Lending Group recognizes the impor- www.d3a.com Assistant Vice President / Senior Director Established in 1985, Lennon, Smith, Souleret Engineer- tance of understanding our clients’ business objectives William Snyder [email protected] [email protected] ing (LSSE) is a civil engineering and surveying firm and providing timely, creative, and cost-effective with offices located in Coraopolis (Allegheny County) Transforming ideas into reality for over 50 years, solutions. We work with financial institutions, manu- Design 3 Architecture has been offering architecture, and Greensburg (Westmoreland County), PA. LSSE GAI’s teams of real estate and economic counselors, facturers, shopping center and mixed-use property planning, and interior design services to the Pittsburgh provides surveying services for sites throughout urban planners, engineers, environmental specialists, owners, brokers, developers, buyers, sellers, landlords, region since 1982. We view inherent project constraints Pennsylvania and Ohio. Our recent experience includes surveyors, and landscape architects provide innovative, and tenants. Our team handles a broad range of mat- as potential opportunities for innovative design solu- an 833-acre industrial park site in Findlay Township, practical, and cost-effective solutions for all stages of ters such as contract negotiation, site acquisition and tions. With a philosophy grounded in team collabora- 40+ miles of new waterlines for a regional utility, land development. Our award-winning land develop- development, evaluation of potential environmental tion, providing both personal attention and project approximately 300 miles of new sanitary and storm ment portfolio includes large multi-use complexes, issues, site planning, commercial loan closings, and leadership, Design 3 Architecture does more than solve sewers, property surveys for sites ranging from 0.5 to retail centers, healthcare and educational campuses, zoning variances. Our team also handles land use, title problems. We provide solutions that are unique, excit- 833 acres, and over 3,000 rights-of-way. residential communities, urban streetscapes, parks and insurance, residential transactions, oil and gas leasing ing and affordable. trails, marinas, and resorts. Distinguished in our com- issues, and tax assessment appeals. mitment to urban-infill, Greenfield, and brownfield development, we help clients achieve their project goals. GAI brings projects from ideas to reality. Learn Land Surveyor more at www.gaiconsultants.com. Owner Representative

Red Swing Group Corporate Office: Legal Services 4154 Old William Penn Hwy, Suite 300 Murrysville, PA 15668 T: 724.325.1215 Campayno Consulting Services, LLC GAI Consultants, Inc. F: 866.295.5226 P.O. Box 554 385 E. Waterfront Drive Surveying & Telecommunications Office: Oakmont, PA 15139 Homestead, PA 15120 3001 Jacks Run Rd, Suite 107 T: (412) 794-8129 T: 412-476-2000 White Oak, PA 15301 F: (412) 794-8130 Babst Calland www.campaynoconsulting.com www.gaiconsultants.com T: 412.678.4403 Two Gateway Center Jesse C. Campayno Patrick M. Gallagher, F: 866.295.5226 603 Stanwix Street, 6th Floor T: 412-302-0035 Assistant Vice President / Senior Director www.RedSwingGroup.com Pittsburgh, PA 15222 [email protected] [email protected] Matthew E. Smith, P.E. T: (412) 394-5400 Transforming ideas into reality for over 50 years, [email protected] www.babstcalland.com Campayno Consulting provides construction consulting GAI’s teams of real estate and economic counselors, Red Swing Consulting Services views its Clients as Part- Justin D. Ackerman, Esquire services for owners and developers who need assistance urban planners, engineers, environmental specialists, ners; focusing first and foremost on building and [email protected] managing the complex contractual relationships surveyors, and landscape architects provide innovative, maintaining strong relationships and trust. This mu- Marcia L. Grimes, Esquire between their contractor and architect. Jesse Campayno practical, and cost-effective solutions for all stages of tual trust is the foundation of a solid business [email protected] has more than 37 years of experience in field and land development. Our award-winning land develop- partnership. Red Swing offers Land Development Con- Peter H. Schnore, Esquire executive positions, giving him insight into the best ment portfolio includes large multi-use complexes, sulting Services to take a project from concept [email protected] practices of project management. Campayno focuses on five core services: Owner representation and construc- retail centers, healthcare and educational campuses, through construction. Red Swing has experience in Babst Calland’s real estate lawyers have well-rounded residential communities, urban streetscapes, parks and Surveying, Civil Engineering, Infrastructure, Utility, tion management; estimating and conceptual budget- skills and experience in real estate development, fi- ing; project executive services; dispute resolution and trails, marinas, and resorts. Distinguished in our com- and Telecommunications Projects. Red Swing effec- nance, construction, energy, environmental risk assess- mitment to urban-infill, Greenfield, and brownfield tively maximizes the return on investment through a business consulting. Our clients rely on our expertise to ment, zoning and land use, tax assessment appeals, add value to their projects by providing clear direction, development, we help clients achieve their project collaborative design approach, utilizing a low impact eminent domain, and other corporate and litigation goals. GAI brings projects from ideas to reality. Learn design philosophy that reduces project capital costs maintaining open lines of communication and placing services. We provide creative, pragmatic advice to the project owner’s goals as the top priority. more at www.gaiconsultants.com. and produces the competitive edge that we and our developers, landlords, tenants, investors, brokers and partners demand. managers of commercial real estate to help them reach their goals, through attentive service that keeps the client’s bottom line in mind. From acquisition to dispo- sition, our approach to the practice of law gives our real estate clients an edge.

94 DEVELOPINGPITTSBURGH | Fall 2016 Professional Services

AmeriServ Trust And Financial Services Company – Trustee PenTrust Real Estate Advisory Services, Inc. – Investment Advisor

2 East Crafton Avenue Oxford Development Company’s Riverfront East Office Building: Pittsburgh, PA 15205-2804 Built with ERECT Funds 341 Science Park Drive, Suite 205 State College, PA 16803 Opening May 2017 T: 412-921-3303 C: 412-491-6132 www.dewooster.com Chuck Wooster, President [email protected] Since 1971, our firm has been a highly regarded and respected leader in the traffic engineering industry. We are most proud of our uncompromising integrity. Our goal is to guide our clients through the rigorous process of real estate development and assist them by correctly identifying on-site and off-site traffic impacts, develop cost effective and efficient mitigation strategies, and seek and receive municipal and State DOT approvals and/or permits. Our skills include: Traffic Engineer- ing Studies, Highway Occupancy Permits, Traffic Signal System Design, Roadway Design, Intersection Design, and Parking Studies. Wooster also provides site design services. Photo by Mark Grasso Building Solid Investment Returns For Tomorrow, Real Estate Broker And Creating Union Jobs Today For more information call 412-279-4100.

Avison Young 4 PPG Place, Suite 300 Pittsburgh, PA 15222 T: 412.944.2137 F: 412.944.2124 www.avisonyoung.com Brad Totten Principal and Managing Director [email protected] Avison Young is the world’s fastest-growing commercial real estate services firm. Headquartered in Toronto, Canada, Avison Young is a collaborative, global firm owned and operated by its principals. Founded in 1978, the company comprises 2,400 real estate professionals in 78 offices, providing value-added, client-centric investment sales, leasing, advisory, management, financing and mortgage placement services to owners and occupiers of office, retail, industrial and multi-family properties.

TARQUINCoRE, LLC Creating Value Throughout the Construction Process 2403 Sidney Street, Suite 200 Pittsburgh, PA 15203 T: 412-381-7433 F: 412-381-6793 www.Tarquincore.com Ronald J. Tarquinio, Principal [email protected] Whether you’re an investor, developer, landlord or tenant, you need a partner who can provide you with comprehensive real estate knowledge… and help you put that knowledge to work for your benefit. Someone who can analyze all of the relevant aspects of a potential transaction, develop creative strategies based on an insightful understanding of the market, then help you effectively implement your plans. TARQUINCoRE meets these needs with a unique, client-focused approach across a complete range of commercial real estate services. From landlord and tenant representation to property management to land acquisitions and brokerage services – whatever your real estate needs might be – TARQUINCoRE can help you maximize options, seize opportunities, avoid potential pitfalls and expedite transaction times. www.developingpittsburgh.com 95

The Partnership Behind the Project.

412-683-3810 412-261-8810

Developing Trend Feature 37 the Natural Gas Industry in Recovery 06 Mobility: the Future of Development 40 Eye on the Economy

Developing Trend Feature 37 the Natural Gas Industry in Recovery 06 Mobility: the Future of Development 40 Eye on the Economy