PIT to OAK direct!

No I am not talking about establishing non-stop airline service between Pittsburgh and Oakland, CA, although some in the Allegheny County Airport Authority would like to see that happen.  I am talking about connecting Pittsburgh’s Oakland neighborhood with Pittsburgh International Airport, via downtown, in one continuous “spine line” light rail extension.

Hey, it’s time to dream bigger these days.  Pittsburgh is finally coming into its fully realized renaissance self.  And the rest of the world is taking notice – taking notice with their moving feet and investments, more importantly.  If Pittsburgh is to grow and keep up with other economic centers in the US, even more so with world economic capitals, it needs a better transportation grid.  While highways are realities that will be part of any overall plan, I focus on a public transport extension here.  That piece of the solution will probably require a larger tax-payer commitment as well as the political leadership to create the momentum to build it.  So here’s my call-out to political leaders like Mayor Peduto or Allegheny County Executive Fitzgerald and all other mayors and State Legislators in southwestern PA locales: start to get serious about building a world class transportation structure for a region that has not had one; at least not since river transport for humans passed.

Popular will is building for funding a better transportation infrastructure.  This past week, the “Pittsburgh Business Times” featured comments from 82 regional business leaders giving their top priority for the region leading up to the year 2020.  Out of 82 comments, 33 noted “transportation” as their top priority and out of those, 10 specifically mentioned public transport between downtown and Oakland and/or the airport.  Transport was the single issue most often mentioned and the overall percentage was 40%.

And Pittsburgh is not alone.  A reading of business publications both national and regional show transportation infrastructure is an issue of greatest concern among economic leaders, along with job creation and educational opportunities.  Economic growth is usually a positive for most citizens, raising living standards and creating opportunities for self enrichment.  But growth comes with costs and responsibilities.  Cities in Texas, of which I have personal experience, are strangling themselves in traffic problems.  Traffic is consistently listed locally as the chief complaint by ordinary voters in this economic boom State.  Pittsburgh is growing again and even though it’s current traffic issues pale in comparison with say, Los Angeles, Boston, Atlanta or Washington, D.C., from what I read in Pittsburgh media, traffic is considered a major problem.  But let’s go beyond relieving traffic congestion.  Emerging world capitals from Shanghai to Lagos to Rio are building clean, efficient, fast transport modes between their airports – the gateways to the rest of the globe – and their city centers.  Pittsburgh needs to do the same between its doorway to the world and its downtown economic hub and then on to its creative hub in the Oakland neighborhood.

A Cracker and Some Sweets

Recent articles have noted what I think should have been obvious from the get-go regarding the proposed Shell Oil cracker natural gas cracker plant in Beaver County: that it will have a net additive effect to the region’s [the earth’s] air pollution.  C’mon folks, all you have to do is drive along Interstate 10 from Houston to New Orleans to get an idea of what fossil fuel processing facilities can do to the environment.  The good news, as stated by Shell spokespeople, is that we know a lot more about controlling pollution today than when many of “Chemical Alley’s” facilities were built.  And as a brand new greenfield plant, the opportunity for the best technology is there.  Metropolitan areas such as New York/New Jersey, Philadelphia, Los Angeles and Chicago – not to mention Houston and New Orleans, are all home to several oil and gas processing plants and their pollution levels are better than Pittsburgh’s according to recent reports.  Once the issue of particulate pollution generated in Pittsburgh’s neighboring Midwest power plants is solved, a new cracker facility should have a relatively small effect on regional air quality.

A “sweet” couple pieces about Pittsburgh’s emergence as a “creative capital” – to use that overused moniker – appeared recently in two different sources which I have linked here.  The “Austin Business Journal” featured a reporter who touted Pittsburgh’s growing appeal in relation to Austin’s reputed hipness.  Go here:  http://www.bizjournals.com/austin/blog/real-estate/2014/06/jans-must-reads-walkable-cities-heywood-hotel-and.html.

And in a related source piece, the “Pacific Standard” notes Pittsburgh’s rise among young creative types seeking a more affordable locale but one with “authenticity” along the lines of Brooklyn.  Go here: http://www.psmag.com/navigation/business-economics/talent-migration-work-creative-much-new-york-poor-pittsburgh-rich-82894/.

All of which makes sense to us – we’re so trend forward.

Those Who Cannot Remember the Past …

A current series of articles in the Pittsburgh “Post-Gazette” is highlighting issues around immigration to Pittsburgh in the new economy, and rightly so.  Immigration is one of this country’s seminal political issues and one that is central to the Pittsburgh region’s economic success.

But written between the lines of this and so many other pieces on Pittsburgh’s shortcomings is the subtext that, in fact, Pittsburgh’s situation is the result of some self-inflicted wounds and “the region should have known better”.  After all, look at how other regions have done it better, prima facie, their growth outstrips ours.  As usual in these pieces, there are quoted experts in the appropriate fields: everything from social sciences to economic development to corporate leadership and all of them have theories as to what Pittsburgh could have done better.

I have to question the ages and backgrounds of these people.  After reading the first two pieces in the “P-G” series I realized how old I am and how long ago was the time of Pittsburgh’s great economic upheaval – the complete death of the steel industry.  I suspect that many of the experts, especially those located in Pittsburgh, are too young to have lived through that era.  So despite the fact that I’m about to give a hint at my age, let me say I did and ….

Pittsburgh in 2014 is a modern miracle!  Detroit’s debacle in 2014 is nothing compared to the decimated economy that was Pittsburgh.  It was literally an economic collapse of “Great Depression” proportions.  I cannot exaggerate the shadow that was thrown over daily living; even the weather seemed grayer.  And yet, Pittsburgh survived.  And then it stabilized.  And now it is growing again.  The past is not prelude.  Great societies revive and renew and reinvent themselves.  Great people do as well.  As do great, truly great cities.  That’s happening in Pittsburgh now.  With acknowledgements to Santayana and exhortations from Gautama Buddha to enjoy the present moment. Peace out for now.

Finally, some sprouts from local seeds!

This week it was announced that HP Vertica, a software engineering division of Hewlett Packard, was opening a full fledged office in downtown Pittsburgh.  Previously the organization was working out of offices at Pitt.  Cited in the announcement as a reason for the standalone office by Colin Mahony, VP and general manager for HP Vertica, he notes: “We’ve found that you have to go where the talent is and we’ve had great, great partnerships with CMU and Pitt.”

That’s exactly the kind of talk we want to hear for organically growing Pittsburgh’s job market and overall future.  Enough of what I’ve heard from a couple local economists that Pittsburgh’s slowdown is related to the general slowdown in US economic growth.  Huh?  Be a leader, not a laggard.  Incite your own job growth.  It’s about time we hear of more organizations that credit Pittsburgh’s higher ed talent pool as a reason to locate here.  It’s nice when eds and meds create jobs within their enterprises.  But it’s better when jobs and wealth are created by the ecosystems eds and meds help spawn.  Good on this one!

continuing a thought ...

After too much delay, building on the previous post but moving onto the more esoteric consideration of promoting manufacturing job growth in the Pittsburgh region: government assisted jobs development and promotion.  Miller targets Pennsylvania’s high corporate tax rates as strangling job creation, especially in the competitive field of new facilities location.  And in that he makes a valid point.  But these days government assisted jobs creation largely involves government subsidies.  Texas has become the master at stealing away both facilities and headquarters offices with rich government subsidy programs.  Witness last week's announcement that Toyota North America will bring 4,000 jobs from California and Tennessee to Dallas - with the State of Texas contributing $40 million to that move.  That can be done because Texas runs a large surplus in its budgets.  Why more of a surplus than most other states and certainly more than Pennsylvania and other Northeast/Midwest states?  How about another 30,000ft view of the obvious: because the State of Texas provides less to social and education programs than most states.  Texas shifts the burden of financing these programs to other government entities such as local municipalities and school districts.  Texas residents pay no State income tax but very high real estate and sales taxes.  Corporate taxes in Texas are also lower than Pennsylvania’s.

And that’s where the government and societal philosophy comes in: do we tax at the job-holder or the job-creator level.  By shifting the burden of necessary social and educational needs to residents, especially owners of housing who tend to be older, states like Texas are taxing the users of social programs, dependent children [via their parents] and the elderly.  This frees up resources [tax money] for programs [corporate location subsidies] that benefits job creators in the form of businesses. In turn, these business entities provide jobs that attract young people in their 20s and 30s that, once established, then become essential to job creation and future growth via family formation and corporate expansion.  Subsidizing old retired people to comfortably afford their homes is not part of the Texas strategy.  Subsidizing entities like Apple and Samsung and Facebook, to name three recently subsidized firms in the Austin area, is a strategy and a successful one, for job creation at least.

So which way should Pittsburgh head?  I don’t believe growth for growth’s sake should be a goal.  A high growth rate provides bragging rights but not necessarily a high quality of life – in fact from my experience it’s quite opposite.  So it comes down to “philosophy” as well as simply working with what you’ve got.  Those beautiful green hills and valleys and rivers of western Pennsylvania need to inspire a new creativity and a new path of innovation and success.

Of Place and Time

In the Sunday April 6^th edition of the “Pittsburgh Post-Gazette”, Donald Miller penned an excellent piece pointing out the clouds on the horizon of Pittsburgh’s relative economic revival, pointing specifically to slowing job creation and continues population losses.  I was traveling in southern California when I read the piece from sunny and dry Orange County, California.  Having just flown in that morning to John Wayne Airport I had a 30,000ft perspective [sorry, pun intended] on Mr. Miller’s focus on manufacturing jobs as key to growth in western Pennsylvania employment numbers.

As our jet came over the San Gabriel Mountains and descended into the coastal plain that is Orange County [the “OC”] you can’t help but be struck by first, the willingness of California’s Transportation officials to throw up highways everywhere. And then second, the incredible number of one and two story flat roofed structures that cover the landscape for most of the flight path into the airport; literally miles and miles of warehouse and manufacturing facilities.  These are companies that provide everything from minimum wage jobs for unskilled, newly immigrated residents to well paying jobs in high tech related industries.

And these are precisely the types of jobs Mr. Miller is dreaming of for the Pittsburgh region.

Here’s a thought on Pittsburgh’s ouster from the modern manufacturing jobs contest: geography plays a large role in this.  Pittsburgh is certainly at the bottom of the list when it comes to adding any new manufacturing jobs so we can point to any one of a dozen [or 49 or 99, whatever size the list] other cities as alternative examples.  But to name the big job gainers in this most recent tepid national growth cycle, let’s note Houston, Dallas, Denver, Phoenix, and southern California as the shining stars.  They all share the gift and curse of having flat, easily developable land that can be quickly cleared and has little physical attractiveness that causes the locals to throw up preservation arguments.  Plus, as a part of that landscape, major highways can be built with equal ease.  Because of Pittsburgh’s geography, it will never be able to compete in that arena. 

Get used to it and get over it.  Modern manufacturing as implemented by the military industrial complex requires oodles of cheap, available land and government subsidized transportation, meaning, highway networks.  All of those resources are in scarce supply in Pennsylvania and the Pittsburgh region.

So what’s the answer?  One approach involves smaller companies that produce high value-added products.  Electronics and high tech instrument manufacturing would be two examples.  Something like All-Clad cookware, is another.  More of that please.  And here I’ll pull an example from another travel experience that speaks more to what Pittsburgh should emulate.  I’ve noted more than a couple times while on trains in Switzerland and Germany, the number of small towns and villages that have some sparkling clean industrial building integrated right into the town.  Often these facilities will have large multinational corporate names attached but just as often they are specialty manufacturers, maybe family owned, that provide the economic basis for a prosperous community.  I can see those tucked into the hills and valleys that form western PA’s landscape.

Donald Miller’s piece also notes the need for State involvement to promote manufacturing job gains.  His assertion, one that I agree with, touches on an existential debate over the role and impact of government as it reflects the public’s collective will.  I will save that discussion for a subsequent post.

Under Utilized Resources

New Pittsburgh Mayor Bill Peduto recently noted that the Hill District was a prime focus for development under his administration.  Excellent!  The Hill District and north Oakland as well as Homewood are very large neighborhoods that are more than under-utilized resources, they are diamonds in the rough.

The Hill especially has broad tracts of developable land and sits right in the center of the higher education centers of Oakland [Pitt, CMU, Carlow], The Bluff [Duquesne], and downtown [Point Park].  The spinoff opportunities from these schools alone are limitless and could provide meaningful, achievable jobs for neighborhood residents.  Combine that with the historical sense of community at the heart of the Hill District and there exists a real “place” in the metaphysical sense, all of which defines a true community.

Homewood is similarly well situated geographically if also with a few more issues to overcome than the Hill.  Crime seems notably more present in Homewood than the Hill of late.  But that could be a factor of a larger population density or a younger demographic.  Whatever the causes, the solution must come from a focus on the neighborhood and a committed determination to change that situation for the better.  Homewood backs up against the economically resurgent East Liberty and some of the wealthiest neighborhoods in the City.  There is real potential for development to occur that is inclusive of Homewood’s current residents.  Economic prosperity percolates up.  I hope Mayor Peduto’s team turns on the stove for this brew in both neighborhoods.