Business First of Columbus
October 31, 2008
Officials in Pittsburgh are trying to figure out how to spur development around a sprawling retail development by Continental Real Estate Cos.
Columbus-based Continental built the 1.5 million-square-foot Waterfront mall on a 260-acre former brownfield site in the Pittsburgh communities of Homestead, West Homestead and Munhall.
The project has attracted its share of detractors who claim the development has had little positive impact on neighboring communities.
“I would say that the predominant view is … the success of having this regional mall has not translated into the rejuvenation of Homestead,” said Doug Van Haitsma, director of real estate for the Mon Valley Initiative, a coalition of economic-development groups in several counties along the Monongahela River in southwestern Pennsylvania.
“I think the developer really kind of missed the boat, in terms of turning his back on the community,” Van Haitsma said.
But while the Mon Valley Initiative is not using the shopping mall as a model for future development in the region, Executive Director Laura Zinski said the project has resulted in additional county and state support for local real estate projects.
Without the Waterfront project, “I think none of that would be happening,” Zinski said. “If that hadn’t been successful, nobody would be looking over here.”
Continental CEO Frank Kass also defended the project.
“There were no jobs there for 15 years,” Kass said of the $300 million project, which attracted about $12 million in state and county grants.
Despite mixed reviews of the project’s economic impact on neighboring communities, the development stands to enrich the municipalities of Munhall, West Homestead and Homestead through property tax revenue. The Borough of Homestead, for example, collects about $500,000 a year from the development as it pays back revenue bonds with proceeds from the Waterfront’s tax revenue, said Homestead Mayor Betty Esper.
But because of a $28 million tax increment financing deal with the three municipalities, in which future projected tax gains are used to finance infrastructure and other improvements, any potential windfall is still well in the future.
Although many county officials speak well of the development, they say the need for such large-scale retail centers in the area has diminished.
“We believe there is enough retail in that area right now,” said Dennis Davin, head of Allegheny County’s Department of Economic Development, a sentiment that has been echoed by County Chief Executive Dan Onorato.
“I don’t think it makes sense to do another big retail development like that. I don’t think there is a market for that,” he said.
In Rankin and Swissvale, directly across the river from the Waterfront, the county has acquired 160 acres of riverfront property at the former site of a Carrie Furnace plant. With the site’s environmental clean-up nearly complete, the county is working to bring infrastructure to the property, which is envisioned as office or light industrial development, Davin said.
“We think that that can be a catalyst for future development,” he said.
The county has also made investments in the Mon Valley communities of Swissvale, Rankin and Braddock, said Stephen Papernick, principal with Pittsburgh-based Papernick & Gefsky PC, which serves as the solicitor for the Redevelopment Authority of Allegheny County.
Through the Allegheny Together program, launched last year, the county has engaged in grants and loans for facade improvements in traditional business districts like those in the Mon Valley.
“No one is building new houses in Rankin, except for the government,” Papernick said. “The hope is that you inject some money in there. You are planting the seeds that you hope will grow.”
In fact, most of the economic development efforts under way in the Mon Valley are coming in this piecemeal fashion. In Homestead, which has continued to struggle, Bobby Engram, wide receiver with the Seattle Seahawks, and Charlie Batch, of the Pittsburgh Steelers, are developing separate mixed-use properties in the vicinity of East Eighth Avenue, the community’s main thoroughfare.
Davin said both projects are under $5 million and expected to get under way by the end of the year.
Across the river, in Braddock, the county has invested $10 million since Onorato became the county’s chief executive in 2004, including plans for 30 residential units, Davin said. Seventeen have been built.
John Fetterman, mayor of Braddock, has lived and worked in the community for five years in an effort to reinvent it as a destination for creative types.
“Things are definitely trending in the right direction,” he said.”
