A decade ago, the word on the street was: “Pittsburgh will be a different place in ten years,” said Ethan Fellheimer, managing director of Red Rocks Group. “Now we’re there,” he declared before a gathering of more than 100 downtown last week.
A panel of the city’s most influential developers—including Bill Gatti of Trek Development, Lucas Piatt of Millcratt Investments and Ralph Falbo of Ralph Falbo Inc.—gathered by the Pittsburgh Downtown Community Development Corporation, discussed the status of Downtown development and offered lessons from this past decade of significant growth.
It’s about “investment over decades,” said Fellheimer referring to the Pittsburgh Cultural Trust’s long view of urban development. “When you have the capital to buy properties and (let them) sit—that’s when you start to see a Renaissance.”
Other lessons? Be creative and seek out many forms of capital. Know that small buildings equal small profits. Use housing and tax credit abatements.
Be transparent when working with government bodies—“show them your books, share your numbers,” said Piatt.
And persevere. The resolve has paid off.
Panelists named many reasons for the rapid growth, including a nationwide “cultural shift towards urbanism,” said Shawn Fox, vice president of business development at Oxford Development. Fellheimer cited the leadership of the Pittsburgh Cultural Trust and a zoning board that “bends over backwards.”
Now, with the imminent opening of Ralph Falbo’s Market Street Grocery, “Nobody has an excuse for not living downtown,” said Piatt.
Developers expressed some concern about absorption in the higher-end rental market which is a trend in real estate over the past decade or so—although the pendulum is now swinging back to condominiums, they say.
There’s one demographic that has not yet been fully embraced by the new rental developments: the workforce audience of service workers and low-to-middle income individuals. The Century Building—with its 950 lofts—is one building that has sought out this market.
“The absolute key is how to serve that middle market,” said Bill Gatti, the man behind the Century Building. “There’s a limited amount of people who can afford $2,000 a month.”
So, what do our city’s biggest developers foresee for downtown Pittsburgh circa 2025?
“People get nuts when I say this—but I think Pittsburgh is going to become one of the next great tourist cities,” said Kevin McMahon, president and CEO of The Cultural Trust. And not just people from around the U.S. He sees Pittsburgh as an international destination.
Why? “Nobody’s ever toured here before,” he said.
“We’ll never be a 24-hour city,” said Lucas Piatt. That’s a status reserved for major cities like New York. But Piatt sees Pittsburgh circa 2025 as an 18-hour city.
To that end, he predicts that the next two years will have a lot of growth.
“Market Square is going to continue to spread to the Point Park University project,” he added. He sees an interconnected downtown, where previously separated pockets will be linked by new residential and hotel projects.
And he foresees improvement on Smithfield Street along with the success of Mellon Square which he believes will trail to Grant Street. The addition of Hotel Monaco is “excellent for the city,” says Piatt. “We are bringing true hip, boutique product to the hotel stock.”
Gatti predicts a spike in quality nightlife and “more and more great restaurants,” citing the already-in-motion culinary renaissance in downtown.
“The Cultural District will look like Times Square—without the neon,” said one panelist, “with people bustling everywhere.”
“The Live, Work, Play environment is something that downtown started taking seriously in the past ten years,” said McMahon. In the next decade, he predicts even more residents, more diversity, better transportation and more theaters—including movie theaters.
Bill Gatti thinks there will be a growth in green space and that this will help spur a domestication of the downtown.
How to serve families downtown is a key domesticator. “If we figure out how to address that issue, we can blow the lid off this thing,” said Gatti.
One sign of healthy residential growth? Dogs. And there are more canines than ever living in downtown Pittsburgh and being walked by leash through city streets. “We love having dogs in our buildings,” says Gatti. “We all do.”