THE MAGAZINE OF THE MASTER BUILDERS’ ASSOCIATION OF WESTERN PENNSYLVANIA SEPTEMBER/OCTOBER 2012 SOUTHPOINTE Turns Twenty RANGE RESOURCES HEADQUARTERS PROFILE PITTSBURGH 2030 DISTRICT LAUNCHES DO OWNERS NEED PROFESSIONAL LIABILITY COVERAGE? I AM THE FRONT LINE. I AM THE LIGHT AT THE END OF THE TUNNEL. I AM BRANDI LEICHT. I AM HELPING TO INSURE THE UNINSURED. I AM HIGHMARK. BRANDI LEICHT HIGHMARK DIRECT STORE CONCIERGE EMPLOYEE SINCE At Highmark, there are over 20,000 people like me LIVES IN 2006 standing behind your card. And all are working to make EAST PITTSBURGH a diff erence in health care and the lives we touch. Highmark Blue Cross Blue Shield is an Independent Licensee of the Blue Cross and Blue Shield Association. CONTENTS 2012 PUBLISHER Tall Timber Group www.talltimbergroup.com ON THE COVER: The Fountainhead EDITOR at Southpointe. Jeff Burd 412-366-1857 Photography by [email protected] Jan Pakler PRODUCTION Carson Publishing, Inc. Kevin J. Gordon ART DIRECTOR/GRAPHIC DESIGN Carson Publishing, Inc. Jaimee D. Greenawalt CONTRIBUTING PHOTOGRAPHY Carson Publishing, Inc. Jim Schafer Photography Jan Pakler Washington County Chamber of Commerce Ed Massery Photography 3 PUBLISHER’S NOTE 40 FINANCIAL PERSPECTIVE ADVERTISING DIRECTOR 4 REGIONAL Insuring owners for professional Karen Kukish MARKET UPDATE liability. 412-837-6971 Lack of confidence leads to a third [email protected] quarter slowdown even as deals 43 MBE/WBE SPOTLIGHT heat up. All Purpose Cleaning. MORE INFORMATION: BreakingGround is published by 7 NATIONAL 46 TREND TO WATCH Tall Timber Group for the Master MARKET UPDATE Municipal stormwater utility Builders’ Association of Western Housing continues to rebound. companies offer a solution to an Pennsylvania, 412-922-3912 or Non-residential construction sees infrastructure headache. www.mbawpa.org July’s slowdown. 49 BEST PRACTICE Archive copies of 10 WHAT’S IT COST? The Pittsburgh 2030 District makes BreakingGround can be viewed a business case for green building. at www.mbawpa.org 12 FEATURE STORY Southpointe at Twenty. 55 INDUSTRY & No part of this magazine may be COMMUNITY NEWS reproduced without written permission 25 PROJECT PROFILE by the Publisher. All rights reserved. Range Resources Marcellus 62 AWARDS AND This information is carefully gathered and Headquarters. CONTRACTS compiled in such a manner as to ensure maximum accuracy. We cannot, and do 33 FIRM PROFILE 65 FACES AND not, guarantee either the correctness of MarkWest Development. all information furnished nor the complete NEW PLACES absence of errors and omissions. Hence, responsibility for same neither can be, 68 CLOSING OUT nor is, assumed. 37 LEGAL PERSPECTIVE Jack Piatt, Millcraft Industries CEO. The Kessler decision makes Keep up with regional construction and lenders leery. real estate events at www.buildingpittsburgh.com BreakingGround Sep/Oct 2012 1 Publisher’s Note prepared for this glorious career of writing stories Throughout the 90’s there were years when as many as eight about construction by studying history and it’s still buildings were built and years when only a few got started. a bit of a passion. In fact, my wife will attest to By looking at the names of the occupants of the buildings the fact that this extends over into my television over the years you can follow the arc of the business cycle. watching, usually a documentary involving what There were dot com businesses, telecom companies and she calls “somebody dying in some battle.” So it’s now energy companies. Most of us would like to see that Inot surprising then that I found the history of Southpointe’s the energy industry doesn’t go the way of their predecessors development pretty fascinating. in telecommunications or IT but it’s worth remembering that a park with a great location can serve the businesses of a In truth of course, Southpointe is more than just the history region regardless of the ups and downs of the cycle. of the development. The office park as it was planned and executed has been one of the transforming projects for the I hope you’ll enjoy reading how the park developed, its region. With a large measure of pride, the civic and economic twists and turns and the significance of the role Southpointe leaders of Washington County point out that Southpointe is played in reshaping Pittsburgh’s market. the home of many of the businesses that loom large in the resurgence of the economy here. And certainly the energy This is also the last BreakingGround before the national sector, which is at the center of the future prosperity of the elections in November. No, we’re not going to get frisky region, is more than represented at Southpointe. and offer a forecast of the election results but it has been encouraging that over the last 30 days owners and One of the historical aspects of the project was the politics. developers in our part of the world seem to have concluded Washington County politics always seemed to me – an that with the election looming they may as well get off the admittedly ignorant observer – to have a split power base dime and get some work underway. They may have finally with the steel and labor driven politics of the Mon Valley in come to the wizened conclusion that it won’t matter who the east and the more traditional power base in the heart of occupies the White House or Congress come November as the county based on coal and agriculture. Southpointe, as it much as how well their business and their clients’ businesses developed, benefitted from the vision and influence of the are doing. After a summer of fretting those businesses are leaders from both sides of the county. looking forward with a little more optimism. We shall see. This makes sense, given that one of the principal aims of If this is the first sign of prosperity in 2013 and 2014 it came Southpointe was to create a new economic base that could a bit late. For all practical purposes the die was cast for 2012 replace the jobs lost at the steel mills, coal mines and glass after the Fourth of July and that wasn’t a good thing for plants in the early 1980’s. The names of the authors of many. Across the country, 2012 is turning out to be a year Southpointe read like a who’s who of Washington County that has been as tough on businesses in construction and politics. There are Mascara and Stout and Piatt, and it’s real estate as any in the last recession. While we have fared probably true that not all of these participants were interested better than other regions, 2012 will not be remembered in the project from a purely altruistic standpoint. At the end fondly by those in our industry. of the day the efforts, the influence and coercion from all these parties produced a mixed-use development that has So let me be the first to wish 2012 a fond farewell. Three become home of some of Pittsburgh’s most successful new months early I say Auld Lang Syne and on to 2013. and old companies. Next year marks the 20th anniversary of the construction of the first of the buildings at Southpointe. We tend to think of Southpointe as a reasonably new development but in fact it has been around for a generation now. Like Greater Jeff Burd Pittsburgh, the success of the park didn’t happen without a few fits and starts. BreakingGround Sep/Oct 2012 3 yet, none have gone away, and feedback from real estate REGIONAL UPDATE brokers and developers is that interest has picked back up as the summer winds down. Were Shakespeare to have been involved in the construction industry in 2012 he would surely have written that this was One development that is definitely picking up is Southpointe. the “summer of our discontent” to begin Richard III. The recent announcement by Burns & Scalo Real Estate that they are in the final stages of planning more than 400,000 Barring an unusually robust September, contracting for the square feet after landing the rumored Ansys deal is but a second and third quarters of 2012 will be in the neighborhood part of the action there. Horizon Properties is selecting their of $1.4 billion, marking one of the slowest spring and summer contractor for the first two Southpointe Town Center retail periods in many years. In constant dollars you have to go buildings and steel is being erected on their J. Barry Center, back to the recession of 2000-2002 to find lower contracting being built by Rycon Construction. Deals have been done or volume. Adjusted for inflation the activity falls short of those construction started on three separate independent parcels years. The data is in some way even better than the reality, for new buildings, effectively closing out the development unfortunately, since the contracting totals include nearly opportunities there. With the demand for space along the $500 million from the Tower at PNC Plaza, Cardinal Wuerl I-79 corridor still very high, interest should be building High School and Penn Hills Elementary alone. rapidly in the Cool Valley project across the interstate from Southpointe, although little progress on that development Through the end of August the contracting volume for has been reported. the seven county metropolitan area stood at $1.9 billion. Because of the general uncertainty about the economy and Activity has picked up in two other submarkets as the year the government, projects went on the back burner after the has advanced. first quarter that were slotted for starting in 2012. Since some of the region’s bigger projects were in that category, Tall Construction is progressing on the Cranberry Crossroads, Timber Group has altered its forecast for the full year down being co-developed by Echo Real Estate for retail and significantly, now expecting less than $2.9 billion for the full Elmhurst Group for office.