Category Archive: Downtown Development
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Developer pitches plan to return Market Square to its roots as a marketplace
By Mark Belko,
Pittsburgh Post-Gazette
Thursday, May 04, 2006A local developer is reaching into Pittsburgh’s past as part of his bid to bolster the future of the Fifth and Forbes retail corridor Downtown.
In a meeting with Mayor Bob O’Connor yesterday, Ralph Falbo pitched the idea of returning Market Square to its roots as a marketplace as part of an elaborate plan to transform the downtrodden Fifth and Forbes corridor.
The “Market at Murphy’s,” an independent marketplace featuring “many of Pittsburgh’s finest purveyors of food,” would be one component of a broader plan that features construction of a 280-unit residential high-rise on the south side of Forbes Avenue, conversion of the upper floors of the G.C. Murphy’s store into 36 apartments and creation of a destination-type outlet for diamond wholesalers and retailers.
“We see a revitalized neighborhood in the city, young and energetic in character with careful consideration to the historic buildings in the area,” Mr. Falbo said in a statement after meeting with the mayor.
“The plan, in addition to vision and concept, is one of action — we need to draw the right uses and users into the area as quickly as possible to spark the greater revitalization of the area.”
The proposal uses nearly 20 city-owned buildings in the corridor, including Murphy’s and the old National Record Mart, one of the structures likely to be cleared to make way for the high-rise. The developer did not say whether he would seek exclusive rights to develop the parcels.
Mr. Falbo is one of at least three developers interested in the corridor. Two weeks ago, Millcraft Industries Inc. of Washington County presented a $217 million plan to revive the district. It also was heavy on the residential side, with 805 units proposed, plus 200,000 square feet of retail and 45,000 square feet of office space.
Washington, D.C.-based developer Madison Marquette has pitched a $50 million to $60 million plan to the city, featuring a mix of residential and retail on lower Fifth Avenue. It wanted to court trendy retailers like Crate & Barrel. However, Mr. O’Connor balked at the $24 million in proposed public subsidies involved. He said yesterday he’s waiting to see if Madison Marquette intends to make another bid for the work.
Like Mr. Falbo’s, the Millcraft and Madison Marquette plans use the Murphy’s building and other city Urban Redevelopment Authority parcels in the corridor as the building blocks for the development.
Mr. O’Connor said Mr. Falbo’s plan totaled about $90 million in all. He described it “very interesting” and said Mr. Falbo was not seeking public subsidies.
“There’s a lot of good points there,” he said.
Mr. Falbo, developer of the 151 First Side condominium tower under construction on Fort Pitt Boulevard, could not be reached for comment after the meeting.
The overall plan includes:
*The Market at Murphy’s, an independent marketplace operated by Mr. Falbo and his partners and featuring Pittsburgh’s “finest purveyors of food.” There was no additional detail. Mr. Falbo said in the release that he and his partners also envision bringing Strip District food merchants to the marketplace to operate kiosks. He said similar ventures have been successful in Seattle, Columbus, Ohio, and Portland, Ore.
The Market at Murphy’s is something of a throwback. Starting as early as 1815, Market Square featured a market house. For years, the massive Diamond Market, built in 1914, was a fixture in the square. It was demolished in 1961. Another venture, Market on the Square, a meat and food market attached to Murphy’s, closed in 1994.
*The Market House, a 36-unit apartment complex using the upper floors of the Murphy’s building. The development would feature balconies along Forbes Avenue, underground parking, and a central courtyard.
*Diamond Tower, a new 280-unit high-rise on Forbes Avenue. It would offer 200 rental units and 80 condos, along with first- and second-floor retail.
*Diamond Market, designed “to restore the grandeur of Pittsburgh’s Diamond District” by creating a destination spot for retailers and wholesalers to sell their gems.
If he gets the go-ahead from the mayor, Mr. Falbo said he could start construction of the market, apartment complex and high-rise by the end of the year. He is teaming with EQA Landmark Communities and architectural and engineering firm Burt Hill.
Mr. O’Connor said he will work with the URA and others in coming weeks to determine which of the proposals is “most doable.”
“You still have to look at the financial situation, who has the capability of delivering, and how soon,” he said.
He said he hopes to have a developer selected in two to three weeks. He added he also is open to giving each developer pieces of the corridor to work on rather than having one do the entire project.
(Mark Belko can be reached at mbelko@post-gazette.com or 412-263-1262. )
This article appeared in the Pittsburgh Post Gazette. © Pittsburgh Post Gazette
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Second day of gambling hearings more sedate
By Andrew Conte
TRIBUNE-REVIEW
Wednesday, April 19, 2006Fewer celebrities and surprises greeted state gambling regulators as their second day of public hearings on Pittsburgh’s casino proposals opened this morning.
There was no campaign-style rally outside the Omni William Penn Hotel. Casino applicants prepared to listen rather than dazzle with slick presentations.Only former Steelers Hall-of-Fame running back Franco Harris — not Motown legend Smokey Robinson nor the parents of former Steelers soon-to-be-enshrined-in-the-Hall-of-Fame running back Jerome Bettis — turned out.
But one thing remained the same: Talk of a new arena colored hearings on the city’s slots proposals. Eleven of the 19 people who spoke on behalf of community groups this morning supported using gambling money for an arena.
“It’s now clear the team’s fate is directly tied to the issuance of a slots license,” said Michael Mooney, creator of a Web site called SlotsforMario.com, claiming that 36,000 had signed a petition to support using gambling money for an arena.
Four out of five young people who participated in a casino survey by the Pittsburgh Urban Magnet Project favored the Isle of Capri Casinos, the only bidder that would pay the full cost of an arena, said Belinda Yeager, the group’s representative.
“It is now time to replace the Mellon Arena,” said Barbara McNees, president of Greater Pittsburgh Chamber of Commerce. “A modern arena would be a significant economic benefit to this region.”
Not everyone spoke in favor of the arena, however.
Arthur Ziegler Jr., president of the Pittsburgh History & Landmarks Foundation, praised the backers of Harrah’s Station Square Casino, which would give his group a $25 million endowment.
“It’s easy to say our organization benefits,” he said, “but our benefit goes to all of the parties involved in revitalizing our city through our historic assets.”
Mark Fatla, executive director of the Northside Leadership Conference, said his group negotiated a letter of agreement with Majestic Star Casino, which would locate on the North Shore. The letter addresses the community’s concerns about potential negative effects, he said.
“We found them to be desirous of a true partnership with the community,” Fatla said.
Restaurants need protection from casinos, said Kevin Joyce, owner of Downtown’s Carlton Restaurant. He asked the board to ensure casino restaurants do not give away food or drinks or sell them below cost.
“You need to ensure they don’t unfairly compete,” Joyce said.
Harrah’s and Isle of Capri have agreed to allow union workers in their casinos, said Edward Nassan, a union leader with UNITE HERE Local 57, representing service industry workers. Dozens of the group’s members sat throughout the hotel ballroom Tuesday but not today.
“The creation of good quality service jobs is the most important economic benefit of gaming,” Nassan said. “There’s no other way for Pittsburgh to ensure good service jobs unless these jobs are unionized.”
The public is taking its turn today with 77 people — speaking for themselves or more than two dozen community groups — giving testimony to the state Gaming Control Board. Each of the three casino applicants will get time at the end of today’s hearings to make its case one last time.
Fewer than 100 people sat in the audience as today’s hearing started, less than half the number when the sessions opened Tuesday.
Isle of Capri Casinos has agreed to pay $290 million for a new arena, while Majestic Star Casino met Gov. Ed Rendell’s challenge to ante up $7.5 million a year for the arena if it wins the license.
Only Harrah’s Station Square Casino has not said what, if anything, it would contribute toward an arena. Its backers said Tuesday they support Rendell’s proposal but want a commitment from the Penguins to stay in Pittsburgh.
The Gaming Control Board wraps up testimony on the proposed Pittsburgh casino today. It expects to award the license for a slots parlor to one of the three applicants by mid-December.
Andrew Conte can be reached at aconte@tribweb.com or (412) 320-7835.
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Rendell’s arena plan hinges on Pens, casinos
By Andrew Conte
TRIBUNE-REVIEW
Friday, March 31, 2006Pittsburgh can get a new arena, Gov. Ed Rendell said Thursday — on three conditions.
The Penguins must agree to stay and help to pay, and the city’s casino operator must pay the largest portion.
It’s not clear any of that will happen.
Penguins officials said they need “a few weeks” to examine the governor’s “Pittsburgh Arena Now” plan, and they won’t rule out shopping the team to other cities after June.
The team still favors its partnership with Isle of Capri Casinos, which would pay $290 million for a new arena if it wins the license for a slots parlor in Pittsburgh.
“Any time you have serious, multiple plans in front of you, that’s encouraging,” said team President Ken Sawyer. “But I have to make sure this plan truly is as advertised.”
The other two casino bidders didn’t endorse Rendell’s plan either.
Forest City Enterprises, which would own Harrah’s Station Square Casino, said it wants Penguins officials first to decide whether they will stay in Pittsburgh.
“We need to know if the Penguins are participating or not,” said spokesman Abe Naparstek. “The Penguins need to put money into this plan. It’s a plan for the Penguins. They need to take the first step and make a commitment to the city.”
Don Barden, the Detroit businessman behind Majestic Star Casino’s North Shore plan, said he wants a ruling from the state Gaming Control Board about whether it’s legal to give money for an arena.
“I said I may consider something once I see all the facts,” Barden said.
Those responses fall short of expectations set by Rendell, Mayor Bob O’Connor and Allegheny County Chief Executive Dan Onorato when they presented an alternate arena proposal yesterday.
Getting Forest City and Barden to agree to the deal in writing will be critical, Rendell said.
“If they say, ‘No,’ the plan falls apart,” Rendell said.
Under the plan, the city-county Sports & Exhibition Authority would float bonds worth $293.5 million to cover the arena’s $290 million price tag and other costs.
The Penguins would pay $8.5 million up front, kick in $2.9 million a year and forgo $1.16 million from annual naming rights.
The team, a tenant at Mellon Arena, stands to make millions more with a new arena by running the facility, including concessions.
“They ought to be willing to jump through hoops to get that deal,” said Jake Haulk, president of the Allegheny Institute for Public Policy, a think tank based in Castle Shannon.
If Forest City or Barden win the casino license, they would have to pay $7.5 million a year toward the arena debt.
The final piece would come from the state’s tax on casino gambling.
Under the gambling law, the state gets 5 percent of casino revenues for a statewide development fund. The fund is expected to raise between $150 million and $170 million annually, of which $7 million a year would pay debt on the arena.
The money isn’t set aside for any other use, and it would not lessen the amount of money designated for a proposed convention center hotel or debt service at Pittsburgh International Airport.
State taxpayers would guarantee the bonds by agreeing to pay them off if the slots money dries up, Rendell said.
Sen. Jane Orie, R-McCandless, criticized the governor’s proposal for relying on borrowed money.
“There is a plan on the table for a new arena for the Penguins, financed completely by the private sector, using gambling revenue,” Orie said in a statement. “Unfortunately, it appears that politicians in Harrisburg would rather jeopardize this plan and place the Commonwealth’s taxpayers at risk.”
Rendell’s Republican challenger in the November general election, Lynn Swann, called the governor’s proposal a “loser” for taxpayers. Swann endorsed the Penguins’ partnership with Isle of Capri on Wednesday.
“Rendell’s plan includes not one cent for Hill District redevelopment, (and) it would force the Penguins further into debt and cost the taxpayers $210 million,” Swann said in a statement. “Plan B is a lose, lose, lose for Pittsburgh.”
State Rep. Paul Costa, D-Wilkins, who also has endorsed Isle of Capri, said he’s glad Rendell is willing to work with the Penguins, but questioned what would be lost by steering slots money to an arena.
“I’m concerned about that because, where was the money going to go initially?” Costa said.
Penguins officials have said they cannot talk with elected officials about alternate plans for an arena, but O’Connor said they met with him privately Tuesday to discuss sites for an arena.
The Sports & Exhibition Authority is examining sites, including the Mellon Arena parking lots and land between Fifth and Centre avenues in Uptown, Onorato said.
Andrew Conte can be reached at aconte@tribweb.com or (412) 765-2312.
This article appeared in the Pittsburgh Tribune Review © Pittsburgh Tribune Review
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Pittsburgh casino jobs a matter of promises – 3 slots license bidders estimate different employment numbers
By Mark Belko,
Pittsburgh Post-Gazette
Sunday, March 19, 2006The three competitors for the Pittsburgh slot machine license are offering wildly different estimates on the number of jobs the casino will create, even as they promise thousands of them.
And some experts caution against putting much stock in any of the numbers being thrown around, especially when it comes to the thousands and thousands of spin-off jobs the applicants say their casinos will produce for Pittsburgh and Allegheny County.
“Those figures can be very, very bogus,” said Robert Goodman, a professor at Hampshire College, who has studied the impact casinos have had on local economies.
Mr. Goodman said that, for every spin-off job created in a casino in a regional market such as Pittsburgh, another is lost as local gamblers make choices about how they spend their money. A night at the casino, for example, might mean one fewer dinner out or a purchase not made.
“You’re talking essentially about a zero-sum game,” he said. “There’s no additional money coming in. You’re just playing with the same money.”
Opportunities promised
That hasn’t stopped the potential casino operators from promising plenty of job opportunities in economic impact reports filed with the state.
The projections are included for two categories of jobs: Direct jobs are those produced by the casino itself or the restaurants, lounges and retail or entertainment venues that are part of the complex. Indirect jobs aren’t tied to the casino but are created by casino spending. An induced job is created when a casino employee spends money at a grocery store, a doctor’s office or a restaurant.
Forest City Enterprises has projected job numbers for its proposed Harrah’s Station Square casino which are far higher than those of the two other competitors for the Pittsburgh license.
*Forest City estimates its facility can generate as many as 3,953 direct jobs, about half of them full-time positions.
*Isle of Capri Casinos Inc. estimates that its proposed casino in the lower Hill District will produce 979 direct jobs.
*PITG Gaming LLC, led by Detroit businessman Don Barden, estimates that its proposed North Shore casino will produce 1,500 direct casino-related jobs.
Estimates for indirect jobs also vary: Forest City estimates 5,200 spin-off jobs; Isle of Capri, 3,100; and the Barden group, 1,500.
Forest City’s estimates are for jobs created by the end of its casino’s second year of operation and are according to a study done by Christiansen Capital Advisors.
Told of Mr. Goodman’s comments, Sebastian Sinclair, president of Christiansen Capital Advisors, retorted, “He’s wrong.”
He said there were plenty of examples of casinos being job generators for cities and states, citing Mississippi as one. He said the Mohegan Sun and Foxwoods casinos in Connecticut also have been an asset for that state.
“There will be some displacement. There always is. But it’s not a zero-sum game,” he said.
Why numbers differ
Abe Naparstek, Forest City director of development, said the full-time job numbers were the highest for the same reason its revenue estimates were nearly $200 million more than the other competitors’. Harrah’s sees the Pittsburgh casino as a destination, even though most of the play will come from people who live in the region.
He said Forest City would build a “bigger and better facility” than the others. “It’s a different type of operation that we’re looking to get into. It’s a first-class casino,” he said.
Isle of Capri’s estimates are based on a report by consultant The Innovation Group.
Despite skeptics such as Mr. Goodman, Steve Rittvo, the consultant for The Innovation Group who did the Isle of Capri study, said he was comfortable with the projections, saying those involving indirect and induced employment were calculated based on government formulas by community.
Direct casino-related projections were determined by studying Isle of Capri operations elsewhere in the United States.
“I’m very comfortable with my number because it’s not pulled out of the air,” he said. “It’s based on what we perceive will be in place.”
But the estimates also might come as a shock to Hill District residents hoping to cash in on the proximity of the casino and the Isle of Capri’s pledge to help redevelop the long-struggling neighborhood.
Of the 4,100 jobs estimated, 41 would go to Hill residents, based on demographics and employment models. Jill Haynes, Isle of Capri spokeswoman, said, however, that it was the operator’s intent to provide more jobs to that community.
Isle of Capri and its partner, the Pittsburgh Penguins, have formed the Pittsburgh First coalition with a goal of providing job-training programs for Hill District residents to take advantage of casino job offerings.
“I’m not at all dissuaded by what is a projection,” said the Rev. James Simms, chairman of the Pittsburgh First board of advisers. “In reality, we’re looking at something much, much more impressive, and I think that’s what the people of the Hill will insist on.”
Ms. Haynes said the 979 direct casino jobs estimated for Pittsburgh were “about average” for an Isle of Capri facility. The report said the average salary would be about $26,000, not including benefits.
A sampling of casino operations prepared by the American Gaming Association shows a wide range of job numbers. The Borgata in Atlantic City employs 4,800 full-time workers; Caesars, 4,399; and Trump Marina, 3,000.
Harrah’s in St. Louis employs 1,800 people, close to its Pittsburgh estimate, and Ameristar in Kansas City, 1,918.
All of those casinos haved table games, which are far more labor intensive than slots parlors.
It is the lack of table games that causes some critics to be skeptical of how many people the Pittsburgh casino will employ.
William N. Thompson, a professor at the University of Nevada Las Vegas, said he doubted that a slots parlor would need more than 600 employees in direct casino-related operations.
“If these places say they’re going to hire 2,300, 3,000 people, it might be through hotels, it might be through restaurants, but it won’t be through gaming. If you have 3,000 machines, you probably can run it on 300 employees,” he said.
Adding to the uncertainty, he said, is that most casinos use tickets to keep track of winnings, eliminating change makers.
“You can leave [a casino] without ever interacting with another human being. They don’t even have a greeter at the door like Wal-Mart does,” he said.
(Mark Belko can be reached at mbelko@post-gazette.com or 412-263-1262.)
This article appeared in the Pittsburgh Post Gazette. © Pittsburgh Post Gazette
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Mellon’s Downtown plans leave subtenants in limbo
By Ron DaParma
TRIBUNE-REVIEW REAL ESTATE WRITER
Thursday, March 9, 2006Come May 31, one of Pittsburgh’s most dramatic buildings, the ornately designed Two Mellon Bank Center, will be nearly empty.
That’s not surprising, since the major tenant, Mellon Financial Corp., announced last year it planned to vacate the 11-story Downtown building — also known as the Union Trust Building — sometime before the end of May.
However, the question that has many people still guessing is: “What’s next?” for the landmark building constructed by industrialist Henry Clay Frick and opened in 1917.
“Limbo is a good word,” said Rick Conley, owner of Oliver Flowers, describing the plight of the more than 20 tenants who still populate the first-level retail arcade area, and remaining office tenants on the floors above.
“We really haven’t heard anything,” said Conley, who just about every day talks to someone else with a question about what’s going on there.
“We’re waiting for the other shoe to drop,” said Rachelle Scanga, owner of the Remedies pharmacy, a 20-year-plus tenant.
Scanga, like a number of other tenants, said she’d like to stay, and is anxious to hear word on her fate from DeBartolo Property Group LLC, the building’s owner.
Most of the tenants are subleasing from Mellon, which has decided not to renew its master lease for the nearly 600,000-square-foot structure designed in Flemish Gothic style by noted Pittsburgh architect F.J. Osterling.
Their continued tenancy is in question because their subleases expire concurrently with Mellon’s master lease at the end of May.
Last year, Joseph Lufkin, senior vice president of Tampa, Fla.-based DeBartolo, successor to the Edward J. DeBartolo Corp., of Youngstown, Ohio, told the Pittsburgh Tribune-Review that it was the company’s intention to try and re-lease the building.
However, the building is losing occupancy at a time when the city’s commercial office market vacancy rate remains just under 20 percent and large tenants looking for space are scarce.
In the meantime, there has been little word from DeBartolo, tenants say. Lufkin could not be reached for comment.
One of those not moving is Larrimor’s, the upscale clothing store that has been in the building for 66 years. The store has a separate, longer-term lease with DeBartolo, said its owner, Tom Michael.
Business at the store is good, he said.
“We like our space, we believe in Downtown, and we think our location is fairly good, although I wish the building wasn’t empty,” Michael said.
Also not moving “at this time” is a Citizens Bank safety deposit box and foreign exchange center in the building’s first sub-basement level, said Mike Jones, a Citizens spokesman.
But others are, including a 3,000-square-foot U.S. Steel Corp. training center that is shifting to the U.S. Steel Tower, and the Disciplinary Board of the Pennsylvania Supreme Court, which is moving to the Frick Building on Grant Street.
“We’re moving at the end of March,” said Sky Foerster, president of the World Affairs Council of Pittsburgh, whose office is on the 11th floor at Union Trust. The council is moving to One Mellon Center across Grant Street.
“The Union Trust Building is one of the most significant buildings, architecturally, in the city, after the Allegheny County Courthouse,” said Arthur P. Ziegler Jr., president of the Pittsburgh History & Landmarks Foundation.
“It’s a very dramatic, highly visible piece of Gothic architecture, remarkable inside and out, and we were delighted with the restoration that was completed several years ago,” Ziegler said. “It is one of the most lively and agreeable buildings in which to step out of your office and into the hallways and see that great rotunda space and the beautiful terra cotta Gothic ceiling.”
Mellon is relocating its employees to one of three other Downtown buildings — One Mellon Center, 325 William Penn Place and the Mellon Client Services Center.
“The pending expiration of this lease at Two Mellon Center has provided us with the opportunity to restack our headquarters facilities, which is part of a larger ongoing initiative to reduce occupancy expenses corporate-wide,” said spokesman Ron Gruendl.
Mellon, which has a total of 6,300 employees Downtown, hasn’t said how many of those workers are based at the Union Trust building. Real estate officials have estimated it occupies about 70 percent of the nearly 600,000 square feet of office space there.
Ron DaParma can be reached at rdaparma@tribweb.com or 412-320-7907.
This article appeared in the Pittsburgh Tribune Review © Pittsburgh Tribune Review
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Saving the North Shore Connector: The Port Authority should no longer reject crossing the Allegheny by using an existing bridge
George R. White
Tuesday, February 28, 2006Though its leaders are trying to be optimistic, the Port Authority is scrambling to keep the North Shore Connector alive. The plan to extend light-rail transit to North Shore stadiums was dealt a setback this month: Bids for building tunnels under the Allegheny River were way over budget once again. This follows the Port Authority’s effort to scale back the project by deferring the Steel Plaza spur to the David L. Lawrence Convention Center.
It doesn’t have to be this hard. The Port Authority can save the project — and still extend the LRT to the convention center — by making one simple and logical change: Nix the tunnels and, instead, cross the Allegheny on the existing Fort Wayne railroad bridge beside the center.
The route would run from Gateway Station and occupy the outer two lanes of the 10th Street Bypass. (The inner two lanes remain for motor vehicles.) Approaching the convention center, the tracks would be elevated to create a station at the center itself. The LRT would then cross the river on the lower deck of the railroad bridge.
The savings from no tunnels — $87 million to $112 million — would be enough to afford a worthwhile extension into the Strip District, perhaps as far as 28th Street.
Once across the river, the LRT could use a cut-and-cover tunnel for the length of the North Shore spine — General Robinson Street — with five stations: the Alcoa building, North Shore Garage, PNC Park, the new West General Robinson Street Garage and Heinz Field. The current Port Authority plan has only two stations: the new parking garage and Heinz Field at Allegheny Avenue.
The risk in making changes to the existing North Shore Connector plan is that the crucial Federal Transit Administration funds might be allocated to other projects in other cities. But certainly our representative and senators could argue that the bridge alternative meets the key FTA objective — displacing commuter auto congestion — much better. A station at 28th Street in the outer Strip District would be ideal as a park-and-ride, serving the many commuters from Allegheny Valley suburbs. All the North Shore parking sites along General Robinson would have superb LRT access to all Golden Triangle workplaces.
I have for many years advocated the bridge alternative, much to the dismay of the Port Authority. Let’s hope that its new leader will be sensible. Plainly put, it’s cheaper and better than the tunnels. Do it!
George R. White is former director of the Transportation Systems Research Center at the University of Pittsburgh. He lives Downtown.
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Grant Street’s bricks anything but grand
By Jim Ritchie
TRIBUNE-REVIEW
Sunday, February 26, 2006The stately bricks covering Grant Street since the city’s Renaissance II era in the 1980s soon might be replaced with black asphalt.
The bricks are not staying in place, forcing continual repairs, ugly patches and a dilemma about whether to spend tens of millions of dollars fixing the underlying problem, or replace the bricks with asphalt, a more economical solution. The actual cost of repairs is undetermined.
“That’s going to be a catastrophe someday, because they’re letting it go,” said John Gipko, of Mt. Lebanon, who drives the street regularly. “I would take my daughter to work that way, and every day we would go by and see the bricks getting looser and looser.”
The problem lies with a layer of asphalt between the bricks and the street’s concrete base, city Public Works Director Guy Costa said. The asphalt softens when it warms, allowing the bricks to move, and the problem worsens with heavy traffic. About 20,000 vehicles use Grant Street daily, including buses.
“I know they wanted a grand boulevard, but unfortunately the bricks aren’t holding up,” Costa said.
State Sen. Jim Ferlo, D-Highland Park, long has complained about the street’s failing condition and thinks the city should install a concrete road. The city has spent more than $22 million on the brick street, according to Ferlo, a former city councilman.
“Please, someone pull the plug on this costly and wasteful mess,” Ferlo said. “Dig the street back up in quadrants and replace it with solid concrete slabs.”
Grant Street is steeped in history. Named for British Maj. James Grant, who was defeated in a 1758 battle with the French at the site, the street ran along the base of Grant’s Hill, an 80-foot hill that once filled the Downtown area. The street was mostly residential until 1884, when the Allegheny County Courthouse was built, starting a transformation into the hub of Pittsburgh’s Downtown government district.
Once paved with sturdy Belgian blocks of stone, Grant Street underwent a change in the 1980s after local leaders formed the Grant Street Block Club.
“The idea was to come up with a way to make Grant Street look like a street on which our most monumental buildings are placed,” said Arthur Ziegler Jr., president of the Pittsburgh History & Landmarks Foundation. “It was a street of monumental buildings.”
The long-lasting stone blocks were replaced with less-dependable asphalt and topped with bricks.
“They came in my administration, or at the end of (Mayor Richard) Caliguiri’s,” said former Mayor Sophie Masloff, who held office from 1988 to 1994. “I think it stands to reason that it’s been at least 14 to 15 years, and with the elements, traffic and the beating it takes, anything would deteriorate.”
Complicating the problem at the intersection of Grant Street and Fifth Avenue is a water-line break that may have caused the road to sink. Costa, who wants to evaluate the street block by block, plans to look at that intersection in the spring. He said the Pittsburgh Water and Sewer Authority would pay for water-related damage.
But he is faced with finding an affordable solution for the rest of the street. The city has little money to repair roads and bridges.
The city has started replacing the bricks with a 4-inch layer of asphalt, Costa said. That work is scheduled to resume in spring on a section of Grant Street between Liberty and 11th Street.
Costa wants to continue replacing the bricks to Seventh Avenue — which would cover roughly one-fifth of the street with asphalt.
Jim Ritchie can be reached at jritchie@tribweb.com or (412) 320-7933.
This article appeared in the Pittsburgh Tribune Review © Pittsburgh Tribune Review
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Slots revenue forecast looks high to some
By Mark Belko,
Pittsburgh Post-Gazette
Thursday, February 23, 2006Forest City Enterprises believes it can generate $617.7 million a year in slot machine revenue from a Pittsburgh casino, a figure that is far higher than the estimates produced by both its competitors and outside consultants.
Forest City presented the estimates in a letter to Mayor Bob O’Connor and Allegheny County Chief Executive Dan Onorato in an effort to make the case that the Station Square casino would produce the most tax revenue for the state, city and county.
The number is not only higher than the $400 million-a-year estimates advanced by Forest City competitors Isle of Capri Casinos Inc. and Detroit businessman Don Barden, but it’s also greater than those calculated by a New Orleans company that studied the issue for state Sen. Vincent Fumo, D-Philadelphia, before the slots law was passed in 2004.
That study, by The Innovation Group, predicted that 2006 revenues from the Pittsburgh market could vary from $320.6 million to $369.2 million, depending on a number of variables, including the number and location of other Pennsylvania slots parlors.
In addition, a separate study completed by Spectrum Gaming Group for a client who was considering the Pittsburgh market forecast yearly revenues at a “worst case” $211 million, a “moderate” $287 million, and a “best case” $320 million.
The $617.7 million estimate was developed by Christiansen Capital Advisors, a national gambling research firm hired by Forest City to do an analysis of the Pittsburgh market.
Sebastian Sinclair, president of Christiansen Capital Advisors, was unmoved by the lower estimates produced by other consultants. He said he was “very comfortable, as comfortable as comfortable can be” with the revenue projections his firm developed for the Pittsburgh market.
The calculation was based on a formula that included a number of factors such as population, per capita income, the urban location, competition from other markets, access, and gambling spending in comparable regions.
While the $617.7 million may be high compared to estimates done by other consultants, he said it is not so when stacked up against comparable markets.
According to Christiansen-supplied statistics, the Kansas City market produced $603.9 million in slot machine revenue last year. While there are no slot machines in Cincinnati, the market generated $636.5 million in slots revenues for neighboring Indiana casinos in 2004. St. Louis produced $829.5 million in revenue in 2004.
Mr. Sinclair said Pittsburgh is “at least the second best” market in Pennsylvania, perhaps behind Allentown.
Albert Ratner, Forest City board co-chair, said the Christiansen estimate was comparable to projections supplied by Harrah’s Entertainment, the gambling powerhouse that will run the Station Square casino.
He said Forest City asked Christiansen to verify the Harrah’s estimates. He said the $617.7 million figure is actually on “the low side” of the projections supplied by both.
Harrah’s, he added, believes Pittsburgh offers the best opportunity in the state, since there’s little competition from other casinos and the region has a propensity for gambling.
Still, others are skeptical of the estimate.
Paul Girvan, managing director of The Innovation Group, described $617.7 million as “a bit of a stretch,” particularly given that competition will still remain in West Virginia.
“If you’re doing $600 million in Pittsburgh, what’s left for the other guys? Show me that whole picture. You have to cannibalize the West Virginia properties to the point of bankruptcy. I don’t think anyone foresees that happening,” he said.
Factors like population density, casino location, distance from competitors, and the size and attractiveness of the facility were part of The Innovation Group’s calculations for Pennsylvania.
John N. Thompson, a University of Nevada Las Vegas professor who produced a report for Gov. Ed Rendell, also questioned the Christiansen numbers. To get to such a level, a Pittsburgh slot machine would have to generate wins on par with much larger markets like Chicago.
“I just think it’s a little high. Can it be done? People do crazy things, but, yeah, I don’t think it will be done,” he said.
“I don’t know how Christiansen measured this. You can make everybody in Pittsburgh a gambleholic, I guess.”
Forest City told Mr. O’Connor and Mr. Onorato it was confident it would meet the projections. Among its reasons it said Harrah’s marketing, in particular its rewards program, and its customer base were unmatched in the industry and had the potential to bring players from elsewhere.
But Mr. Thompson said he does not believe Pittsburgh will attract many people from other places, particularly when there are no table games.
“I think it’s a big stretch,” he said. “Nobody flies anywhere to play a slot machine.”
Mr. Barden has called the Forest City estimate “pie in the sky.” To get to that number, the average take per slot machine would have to be $423 a day for 4,000 machines or $564 a day for 3,000, he said.
He said he is budgeting $276 a day and that the industry average is $200 to $400 a day. The daily average for the 81,751 slot machines in play in the northeast was $256 last year, according to a Northeast Slot Report compiled by Gaming Industry Observer.
The Forest City estimate also would equate to daily averages higher than those produced by Atlantic City slot machines and those at Connecticut’s Mohegan Sun casino, considered an industry leader in slots. Last year, that casino’s 6,217 machines each averaged $386 in daily revenue.
However, Mr. Sinclair said comparing wins per machine is misleading because it is primarily a supply and demand issue. In other words, the fewer slot machines you have, the higher the win per machine will be.
Joseph Weinert, vice president of Spectrum Gaming, said the Forest City projections would put the Station Square casino in the “upper tier” of slot machine performers.
While his company predicted a high of $320 million for Pittsburgh, Mr. Weinert said that was based on a “significantly lower level” of capital investment by his client than Harrah’s proposed $512 million casino.
He believes Forest City has a shot at $617.7 million.
“Being the only game in town and with a sizeable project with multiple amenities and given Harrah’s industry-leading marketing tools, I don’t think that’s an unrealistic marketing figure,” Mr. Weinert said.
The Allegheny Institute for Public Policy said yesterday the disputes over the revenue estimates are one reason the state should have auctioned casino licenses to the highest bidder rather than selling them for a flat fee.
“Had state officials let the slots license sell through an auction process, casinos dueling over who will produce the most revenue would be irrelevant because each applicant’s revenue expectations would determine how high they would go in the bidding process,” the report said.
“If Harrah’s truly believes they can rake in twice the revenues of other applicants, Harrah’s would easily win the license by out-bidding the other license seekers.”
(Mark Belko can be reached at mbelko@post-gazette.com or 412-263-1262.)
This article appeared in the Pittsburgh Post Gazette. © Pittsburgh Post Gazette