The South Side, a successful example of mixed use
development
The Urban Redevelopment Authority of
Pittsburgh and Brownfield
Redevelopment
The URA (Urban Redevelopment Authority of Pittsburgh) is part
of the economic development in the city of Pittsburgh. The agency covers a broad variance of work ranging from
Brownfield redevelopment for the recreation of the abandoned property to
building community. It manages diverse programs namely, housing,
financing, business assistance and sustainable development. It has succeeded in
inducing private investment. Private and public partnerships are the main
characteristics of their economic development project. The URA has six
representative projects: South Side, Summerset at Frick
Park, Bedford Hill, Pittsburgh Technology Center, Washington’s
Landing, and Crawford Square. Among
these, South Side is the biggest venture. This work is a Brownfield project,
which recreates the abandoned place into one of the most vibrant areas in
Pittsburgh. In this research, I will
examine the process of the development and illuminate the crucial factors of
this successful transformation.
History and Geography of the South Side
The South Side of Pittsburgh is located to the south of the
Monongahela River. This proximity to the river, and
profuse coal supply allowed LTV Steel to settle down, placing its roots here in
the early 19th century. The Steel and Iron industry prospered and as
a result of the proliferating business, iron and steel workers and a lot of
immigrants from Eastern Europe came to this area at the end
of the 19th century. Immigrants from various countries settled down
and formed their own villages including schools and churches of their native
languages. This area was customarily inhabited by low income industry workers.1)
LTV Steel ceased operation in the early 1980’s and the site
was abandoned. The trend of suburbanization and loss of jobs triggered
population decline in that area. This also damaged small businesses owned by
several families. This situation reinforced the area’s low income status.
The Urban Redevelopment Authority of Pittsburgh (URA)
purchased the company’s 123 acre site and then this locale was transformed into
a vibrant mix of residential, commercial, light industrial and R&D
development due to coupled public and private investment. This change induced a
population increase and brought rebirth of the South Side.
Process
and
Outcome
|
Table 1. Private
Investment
|
|
|
New Establishment |
Investment(million) |
Size (sq.ft) |
Characteristics |
Year |
|
UPMC (U of Pittsburgh Medical Center) distribution center |
$4.90 |
83,000 |
Creation of 80 more jobs |
1998 |
|
Life
Science Center
|
$10.70 |
45,000 |
Pittsburgh Industrial and Economic Development Corporation
, the University of Pittsburgh Medical Center involved |
1999~2002 |
|
UPMC Sports Medicine Facility |
$30.00 |
90,000 |
Medical office and training center |
1999~2000 |
|
IBEW (International Brotherhood of Electrical Workers)
|
$18.00 |
125,000 |
A 19,000 sq.ft. ballroom, a 31,000 sq.ft educational
training area, and 40,000 sq.ft. of primary and secondary offices |
1999~2000 |
|
FBI |
$20.10 |
83,000 |
Four-story complex |
2000- 2001 |
|
Quantum
One Office
Building |
$18.00 |
1)160,000
2) 41,040 |
1) Four-story office and retail building, prime tenant:
UPMC.
2) Three-story office, retail building |
1) 2000~2001
2) 2001 |
|
Quantum
Two Office
Building |
$22.00 |
187,000 |
Six-story office building |
2003 |
|
Soffer Mixed Use Development |
$20.40 |
123,522 |
Three-story, mixed-use building, 42,076sf of retail &
81,446sf of loft residential 84 multifamily units. |
2003 |
|
Rivertech
Center |
$5.00 |
47,000 |
Three-story office building, 150 new jobs |
2001~2002 |
|
Multifamily Housing |
$27.00 |
|
Three-story 270 unit complex |
2002~2003 |
|
Matcon Diamond |
$1.25 |
14,000 |
58 to 68 jobs created. |
2002 |
|
Immigration and Naturalization Service |
$4.70 |
32,500 |
Three-story office building, 50 jobs |
2002~2003 |
|
Soffer Mixed Use |
$13.00 |
186,000 |
Three-story retail and office space. |
|
|
Soffer Mixed Use with cinema |
$10.70 |
102,000 |
Retail and upper level screen cinema. |
|
|
Soffer Cheesecake Factory |
$2.50 |
|
360 seat and 72 seat outdoor patio |
2002~2004 |
|
Rodriguez Housing |
$11.50 |
|
|
|
|
Total |
$219.75 |
|
|
- |
|
Source:www.ura.org/showcaseProjects_ssWorks.html |
- |
After URA took responsibility for this site, it sold the
property in portions to several private companies. Commencement of this
revitalization process began in 1995. In September, 2004 this was
completed and business offices opened. This project was headed by Sasaki
Associates of Boston. It formulated a framework plan, which brought an
agreement, accepted by the community and city alike. The project progressed via
public and private partnership.
Table 1 shows various sources of private investment. These
several funding sources resulted in creation of mixed use development. In this
project, the real estate development company, Soffer Organization, is mainly
engaged. It constructed several mixed-use buildings, one of which includes JP
Morgan Chase Bank, occupying 3,000 square feet. 2)
In the case of JP Morgan, the South Side is its first office for the Chase Home
Finance Unit. Especially this table suggests that medical, and life technology
centers such as the UPMC (University of Pittsburgh Medical Center), as well as
the Life Science Center are big anchor tenants. This demonstrates the area’s
successful change. In the South Side, not only offices, but also numerous retail
shops exist. The number of retail shops is around 230. There are 51 restaurants,
37 bars, and 25 clothing and accessories shops. In addition, there are 11
galleries, and seven arts and crafts shops. 3)
Overall, 180 stores create more than 90 million dollars in
cash flow. The aforementioned lists show that the South side has transformed
from an industrial town into a work, cultural, and entertainment center. Now, it
affords people an opportunity to work and enjoy amenities. The private business
development required public infrastructure, which encourages people to come to
the area. Public investment for this project included expanding roads,
installing parking garages, constructing the Monongahala Connecting Bridge, and building
parks.
|
Table 2. Public Investment
|
|
|
|
Infrastructure |
Cost |
Public Institution |
Financing |
|
Road |
$44,000,000 |
City/URA Funding |
$21,637,961
|
|
Renovation of Monongahela Connecting
Bridge(MONOCON) |
$14,000,000 |
Private Garage Funding |
$18,650,000
|
|
Hot Metal Bridge |
$5,266,500 |
State Funding |
$16,922,000
|
|
Parks |
$1,000,000 |
Pittsburgh Water& Sewer Authority |
$12,525,000
|
|
Parking Garages |
$38,733,500 |
Tax Increment Financing (HUD Section 108
Loans:$11,000,000) |
$25,000,000
|
|
- |
- |
HUD Brownfield Economic Development
Initiative(BEDI) Grant |
$1,500,000
|
|
- |
t- |
HUD Economic Development Initiative(EDI)
Grant |
$1,000,000
|
|
- |
- |
Other Sources |
$5,695,039
|
|
Total |
$103,000,000
|
oTTtalottoa
t
ltalToTotalataltotaT- |
$103,000,000
|
|
Source:www.ura.org/showcaseProjects_ssWorks7.html |
- |
Table 2 shows the public investment in the South Side project.
The most notable feature of the infrastructure is the Renovation of the
Monongahela Connecting Bridge. It increased accessibility
to the area and made its transformation from an industrial town to a vibrant
mixed-use place successful. The former railroad bridge for the steel industry
was converted into a two lane vehicular bridge.4)
This bridge connects the South Side with Oakland and the downtown and it helps maintain proximity to the
downtown. This connection facilitates the flow of people to and from downtown.
The Overall Impact
In this project, private and public investment was $323
millon. Due to this 1,420,000 sq.ft. project, 354 residential units and 5,400
jobs were newly produced and it is estimated that the city receives about 8
million dollars in real estate taxes per year. Also, this development
increased property value and the median family income level of this area. The
2000 median income level is $44,260, which doubled from $23, 722 in the early
1990’s. The Median House value of South Side according to the 2000 census data
was $73,900, which was before completion of the apartment complex.5)
This value was higher than Median house value of Pittsburgh which was $59,700.6)
This was a dramatic increase from $34,433 in 1990. It was even below that of
Pittsburgh, which was $40,500 during
the same time period. The house value of this area increases by 114.6%, while
that of Pittsburgh grew by 47.4%. These
newly built houses have drawn a lot of people and its occupancy rate continues
to remain high compared to other areas in Pittsburgh.
Housing Development Impact
Business
development creates jobs and offers people a space for work and relaxation.
However, the most important part of this project is its residential development.
Without the housing development, this business development alone wouldn’t
succeed as it does now. Residential units attract people who might migrate from
the city to the suburbs. The houses provide a stable population and this can
contribute to the vibrancy and business development in this area. The residents
are potential consumers for the area’s businesses. It is not only the location
of the newly built houses in the new business district of South Side, but also
how those houses are designed that is crucial in inducing people. There are 354
residential units in this project and among these, 84 units are located in
mixed-use buildings. Figure 2 shows a mixed-use building, which has a
pleasant and refined design. This is one factor to draw middle or high income
people into South Side and makes the area more competitive compared to suburbs.
(source of Figure 2 image: www.flatsatsouthside.com/amenities-page.html).
The façade of the building is in harmony with the rest of this
area. It shares simple design with other buildings, but it also has buttresses
which make it unique in that setting. The broad sidewalks facilitate people’s
movement and connect each building in the entire vicinity. This pedestrian
oriented design appeals to people’s attention and enforces the image of livable
place. These new urbanist principles stimulate people’s demand and increase the
value of the property. This value increase makes high tax revenues for the city
and the local economy.
However, the low mortgage interest rate allows people to
easily access to the sector. They can purchase houses at affordable prices. In
addition, neighborhood planning proceeded by The South Side Local Development
Company (SSLDC) has developed affordable housing, which is below the market
rate. It has already built 26 housing units in Fox Way Commons and these houses
include the renovations of warehouse buildings and infill projects.7)
It also developed 51 housing units which made over $5 million in real estate
taxes.8)
Moreover, mass production of a 270 unit multifamily housing prevents rent from
soaring. This affordable housing with reasonable prices can attract young
professionals who work in the South Side business area, Pittsburgh downtown, or Oakland where two major universities are located. The affordable price
of housing, and easy accessibility to work, keep these people in this area and
stabilize the workforce for South Side businesses and the local economy alike.
This housing development establishes a compact neighborhood
and forms a sense of community. This requires well-organized community service
such as education and health. The South Side Local Development Company also
operates a neighborhood assistance program and reinforces it within the
community. In this area, 133 individuals are provided with job training and this
also can contribute workforce growth. Actually 119 individuals obtained jobs
from this assistance in 2003.
Housing development attracts people and stabilizes the
workforce. This forms a large consumer base which can facilitate capital flow
and business growth. The business development also creates more jobs and
enforces the area’s economy. It helps the formation of a healthy and viable
community. This vibrancy makes property more attractive and increases
demand for the property. The value of property increases and the city
receives higher returns on property taxes. The public sector can initiate other
projects for community service and welfare, too. Throughout this whole process,
local economy develops and more pleasant places are generated. This cycle shows
housing plays a very important role in developing
economy.
Conclusion
This project represents public and private partnership
investment. Private retail, office and residential units, which were funded by
private firms, also required public infrastructure improvements such as road and
parking garage development. Harmonious work between public and private sectors
revitalized the abandoned land. The property that used to be occupied by a steel
industry had environmental risks that were a challenge to revitalization. Also,
socially this area retained a strong image of a worker’s town, but
transformation, accelerated by public and private cooperation, was successful.
The South Side improved from low income and undeveloped status to become one of
the most vital places in Pittsburgh.
For the public sector, this development is the general purpose and mission, and
for private companies it helps them to make a profit.
Also, harmony between design and policy facilitates
revitalization. The success of the project shows that design and policy
are not contradictory. They are more likely cooperative. The sophisticated
design attracts more people and helps the policy’s purpose, which is to increase
population and tax revenue. This increase is a potential factor for economic
development.
The project demonstrates that public and private sector or
design and policy are closely related. These seemingly dichotomous two factors
receive synergetic benefit from each other’s support. The South Side project
represents this cooperation.
Reference
1. The South Side Neighborhood Plan 2000
in South Side Planning Forum, Pittsburgh, PA 2000
2. http://www.thesouthsideworks.com/documents/NewTenantsSign.pdf
3. http://www.southsidepgh.com/be_entertained/
4. http://factfinder.census.gov/home/saff/main.html?lang=ena.org
5. http://www.census.gov/
6. http://www.census.gov/
7. Sabina Deitrick and
Cliff Ellis, “The Importance of Design” www.nhi.org/online/issues/116/DeitrickEllis.html
8. South Side Local Development Company
2003 Annual Report.
Map: http://www.pitt.edu/
Figure1: www.thesouthsideworks.com/
Figure 2: www.flatsatsouthside.com/amenities-page.html
Table 1: www.ura.org/showcaseProjects
Table 2: www.ura.org/showcaseProjects