Questions surround Plan C

By Stephanie Franken
TRIBUNE-REVIEW
Sunday, June 23, 2002

Damian Soffer has big dreams for the South Side: art films, new sidewalk cafes, loft apartments and an outdoor theater for concerts or Shakespeare performances.
The developer behind the SouthSide Works, the $170 million entertainment, housing and office complex under construction on the former LTV Steel site, Soffer said, “Everything that will happen in Pittsburgh will start or finish or run through the SouthSide Works.”

But what about Downtown, wonders Landy Benaquista.

“There is no life. There are no shoppers here on Saturday. There’s nothing Downtown to draw anybody,” said Benaquista, gesturing across the street as she stood outside Candy-Rama, the 50-year-old Fifth Avenue store owned by her husband and brother-in-law.

With six new development projects planned or under way, Pittsburgh’s urban core will see substantial changes over the next decade. The projects promise trendy stores and restaurants, plus new office space and housing. If successful, the developments could enrich the neighborhoods they border by drawing more visitors and residents.

In a city lacking the population growth that often drives real estate development, however, gains for some mean losses for others.

Most developers, economists, city officials and store owners agree that Pittsburgh consumers will embrace newer developments at the expense of the old.

Among the vulnerable could be Downtown itself, sleepy past 6 p.m. and awaiting its third, $363 million redevelopment plan for the Fifth and Forbes area.

Candy-Rama’s Benaquista said she is optimistic that Plan C could give the area the boost it needs — once it gets under way. But during the wait, she said, area stores are moving on or dying off.

BIG PLANS

Meanwhile, developers outside Downtown are trying to seize their own share of Pittsburgh’s market, proposing more than $1 billion in new development.

Less than five miles up the Monongahela from the SouthSide Works, The Waterfront — a massive $300 million retail, office and housing complex — holds court. It is a mature development, now complete with the exception of eight acres adjacent to Loews Theatre. Farther down East Carson Street at Station Square, a hotel expansion, plus more stores, bars and restaurants are cropping up in a $71 million expansion.

On the other side of Downtown, an expanse of parking lots on the North Shore is the proposed home for another new urban neighborhood with $200 million in facilities for living, working and playing. On 25 acres near Mellon Arena, the Pittsburgh Penguins are devising a $500 million plan of their own that could include retail and entertainment space and a new hockey arena.

Circling the urban core are more than 20 shopping areas — enclosed malls and strip malls — such as The Waterworks Mall in Aspinwall and The Mall at Robinson.

In a market analysis that assesses the viability of Plan C, author Hunter Interests Corp. said the region’s declining population was reason for concern to developers.

“In the simplest sense, these two trends — decreasing population and increasing retailing — cannot continue indefinitely,” the study said.

WINNERS AND LOSERS

The Plan C task force devised a plan to help the project succeed: add nearly 600 new apartments to the Downtown mix.

To History and Landmarks Foundation President Art Ziegler, that’s why the proposal surpasses two previous Downtown redevelopment plans.

“It’s not about malls. It’s about housing,” he said.

But the fundamental issues raised by the Plan C market study remain: Unless Pittsburgh’s population booms unexpectedly, new developments will compete for the same pool of customers.

Experts disagree on the effect these new stores and office buildings will have on Pittsburgh’s economy.

Bob Gleeson, a Duquesne University professor who specializes in urban planning, said real estate development can spawn economic growth.

As private developers — especially those from other cities or states — build new developments, they have a big incentive to see them succeed, he said. As a result, they would pump up Pittsburgh and perhaps succeed in bringing new businesses here, in order to make their own projects succeed.

But Columbia University urban planning professor Elliott Sclar, in New York, disagreed. “It’s industries that drive growth, not real estate development,” he said.

“Whenever you get a new scheme for real estate development, it’s not going to change the basics. Entrepreneurship, industry growth, education, access to capital … they have nothing to do with a pretty store front.”

To Elizabeth Deakins, a professor of city and regional planning at the University of California at Berkeley, the outcome of a new development is a clearer win for the private developer than the city.

“A developer can tell you he can make a viable development and often, he’s right. That doesn’t mean he’s not going to do it by moving the market from Downtown or from older shopping centers to newer ones.”

With so many new projects under way, Pittsburgh may see older, locally owned stores lose out to new, national competition, Deakins said.

Whether or not that harms the city is a matter of opinion, she said.

Mulugetta Birru, executive director of the Urban Redevelopment Authority, agreed, saying new developments probably will weaken the city’s more obsolete restaurants and stores — even some old favorites.

They also may alter plans for Downtown.

“I feel all these developments will have a negative impact on the entertainment potential for Downtown,” Birru said. “At the end of the day, there is a limit to how much entertainment the area can support.”

While that reality might force a revision of expectations for the area, it doesn’t necessarily crush them.

Birru cited a feasibility study conducted by CB Richard Ellis for Deer Creek Crossing, a new shopping center proposed for Harmar Township, which found Pittsburgh has less shopping space per capita than the national average. While the national average is 19.6 square feet per capita, Pittsburgh averages 16.6.

Birru said there is no reason to intervene as outmoded establishments lose ground to newer ones. “It’s a natural market situation.”

University of Pittsburgh professor Edward Muller had a similar view.

“This is the nature of American Capitalism, to constantly have entrepreneurs — in this case often developers and large corporations — try to find their niche and boot others out of business,” Muller said.

“This kind of eating up of ourselves — cannibalism — that is the nature of the beast.”

LESSONS FROM DENVER

Whether or not each development succeeds, and whether or not local businesses find success along with them, is partly a matter of proximity.

Some local store owners are readying themselves for two possibilities: Either they will be close enough to new developments to gain from increased pedestrian traffic, or they will be too far away from those developments — and lose customers.

Downtown Pittsburgh might take a few lessons from Denver, another city that recently confronted blight and undertook massive new projects for renewal, said UC Berkeley’s Deakins.

Over the past decade, downtown Denver has undergone a renaissance. Infusions of taxpayer funds led to new housing and entertainment complexes in the heart of the city. A pedestrian walkway now cuts a swath through Downtown, encouraging foot traffic and giving rise to sidewalk cafes and stores. The city’s new baseball stadium, Coors Field, also is Downtown, adding to the area’s buzz.

Compared to Denver, Pittsburgh’s new developments aren’t as concentrated.

“They surround but do not reinforce the Downtown as one would hope,” said Thomas Clark, professor of urban and regional planning at the University of Colorado at Denver.

That means those new developments could compete against — not complement — each other. And local business could be caught in the crossfire.

Benaquista fears her store will be too far away from new developments on the two shores across from Downtown. She’d like to see a few big, inexpensive national retailers such as Target or Costco come Downtown, because she believes they would give people a reason to make the trip to an area where parking is inconvenient.

On the South Side’s East Carson Street, however, some shopkeepers say they are close enough to the SouthSide Works and optimistic that it will bolster an already lively area.

“We depend on foot traffic. Lots of businesses here depend on the numbers of people who come to see the South Side,” said Anne Oates, co-owner of Spotlight Costumes Co. At her 13-year-old store, visitors are greeted with South Side’s signature quirkiness: an array of colorful wigs and costumes, plus two chubby dachshunds named Kiwi and Brownie.

QUALITY WINS

For developers and retailers alike, it’s important to remember that customers will be faithful to places they love — new or old, said Bill Kunkel, manager of the Carlton Restaurant Downtown. “Our feeling is that there’s a piece of the pie for everybody. We’ve always felt that way. We’re a good restaurant, so we get our regular customers,” he said.

“I don’t know if that’s the case with everybody.”

Beyond stores and restaurants, however, what Pittsburgh needs to fill the gaps is stronger economic growth, said James Starman, managing director of L.J. Melody & Co., a real estate banking firm.

And when the future of new development projects is pondered, the health of the local economy represents the greatest unanswerable question.

But time is on the side of area developers. Most projects won’t be complete for several years. SouthSide Works, for instance, is under way now, but it is being completed one building at a time and won’t be finished until 2004.

It’s the time span for completion of new projects that increases their likelihood of success, said Mark Schneider of the Rubinoff Co.

“Do I think the markets are here for 750,000 square feet in one year? No. Do I think the markets are here for 750,000 square feet over seven years? Probably.”

Stephanie Franken can be reached at sfranken@tribweb.com.