Some Hard Truths

President Trump pulled out of the Paris Climate Accord and stated his intention to renegotiate the terms.  For anyone in business who has ever dealt with a tough negotiator, this approach should not surprise.

But as someone who literally happened to be within earshot of an office television at the moment he mentioned “Pittsburgh, not Paris” and then later on when he spoke of “Pittsburgh, Pennsylvania, Youngstown, Ohio and Detroit, Michigan” in the same context, I figured then and there some poo-poo was gonna hit someone’s fan.  Don’t get me wrong; this kerfuffle [only in Pittsburgh] over Pittsburgh being mentioned by the President who, for many, is making a colossal mistake in this Climate agreement pull-out is "mouse nuts" in the larger scheme of the world’s current issues.  But it has some relevance to how Pittsburgh perceives itself as well as how it’s perceived by the larger world.

I myself was not happy to have our burgeoning high tech hub described alongside Youngstown and Detroit [though full disclosure makes me admit there are many lovely parts of and fun activities in both those metro areas] as that typecasts Pittsburgh as one of the stereotypical dead and dying cities.  Well so be it.  Our President is from New York with all the prejudices that encompasses.

What I am dismayed with is the attitude, again, of Mayor Peduto who was “offended” that Pittsburgh was mentioned in the context of pulling out of the Climate agreement.  Or was it that the Left’s latest “evil one”, the anti-Christ to Peduto’s political party, simply uttered the term “Pittsburgh” from his lips?  Your call.

Here’s the thing: Peduto needs to admit to and then face up to the hard truth – as our friends in AA would have him do – that the popular perception of Pittsburgh as an economic backwater compared to more successful cities is, well, true.  Unemployment rate?  We have been consistently one percentage point higher than the national average during this anemic recovery period.  And let’s not talk about that rate compared with other second tier cities in our so-called “cohort group”.  We have an unemployment rate fully two-plus percentage point higher than cities like Charlotte, Columbus, and Nashville.   And don’t get me started about income levels.  It’s ALL ABOUT income, and Pittsburgh is a historical laggard when it comes to per capita income. What good is inexpensive housing when you don’t have income to afford a lifestyle you really want?

Lastly, while I’m on this rant, let’s talk about how the Pittsburgh region is still a net exporter of young and talented people to other parts of the country.  This is personal for me today.  Just this week my cousin’s daughter who was married last year to a great guy, both having jobs they enjoyed and a new house in Bellevue, announced they are moving to Atlanta for better jobs.  I lived in Atlanta and I know the god, bad and ugly and believe me there’s a lot of that.  But jobs?  Those it has in spades.  Something a young couple looking to make their mark on the world have a much harder time finding in metro Pittsburgh.

I realize Peduto isn’t the mayor of the metropolitan area.  But he’s the most visible spokesperson.  Maybe when he admits Pittsburgh still suffers from a century long economic malaise that shows little signs of going away will we finally see some concrete [tax cuts? more economic incentives for relocating companies?] actions to help stimulate the local economy.

Ending this screed on a positive note, I see that Milllcraft Investments has decided that the downtown Pittsburgh market is ripe again for condo development and is returning to a plan that puts condominiums on the former Saks Fifth Avenue site on Smithfield Street.  Millcraft believes there is demand for owner-occupied apartments as opposed to rental units.  This is great news for downtown.  Homeowners, even high rise homeowners, bring a level of social and economic stability to an area that can only translate into even more development. 

Kudos and Cranks

Kudos for the planned new Oaklander Hotel on the Pittsburgh Athletic Association property. Being managed under the Marriott Autograph Collection marque is a real coup for the neighborhood.  The architecture is pleasing and the brand is sufficiently high end to complement the development progress in the gem that is Pittsburgh’s university district.

Cranks on Mayor Bill Peduto’s smear campaign on Uber.  First he accuses Uber of being the reason Pittsburgh did not win the Smart Cities Challenge competition.  [Full disclosure: a friend of mine works for a global engineering construction firm that has been hired to assist Columbus with their winning projects and he tells me Columbus’ approach was more in line with what the feds wanted for this initiative.]  Then he launches a public relations campaign accusing Uber of not using its resources to benefit more Pittsburghers.  Huh?  Seems to me Uber is providing a lot of benefit to Pittsburgh and the region by locating a major research effort in the City and providing hundreds of jobs that may grow into the thousands.  And high paying jobs at that.  Being blunt, let’s face facts:  beggars can’t be choosers.  In my DNA I know, and in my bones I feel Pittsburgh is truly one of the most special places on the global map.  However, it’s certainly not a hot spot for economic success by most current definitions.  Companies like Uber are the way to make up for a period of economic stagnation tracing back to WWII.

Kudos to Ford Motor Company and Argo AI for bringing $1B in investment “to Pittsburgh”.  I qualified that statement as I will wait to see how many jobs are actually created in Pittsburgh given Ford’s plans to also spread research across Detroit and the Bay Area. Still it’s a nice public relations win for us.

Cranks again on Peduto’s Administration for somehow screwing up the Penn Plaza redevelopment.  Now there are lawsuits and counter lawsuits.  WTF?  OK, I know I will be lambasted for saying this but I’ve lived in gentrifying cities all my life – from Boston in the 70s to a New York back from bankruptcy’s brink in the 80s to the Buckhead neighborhood of Atlanta when its total metro area was [believe this or not] still smaller than Pittsburgh’s.  Gentrification happens.  You cannot stop it if a city is to grow and prosper.  Stopping development is not the way to make impoverished citizens’ lives better nor encourage the arrival of new citizens who can create wealth for a larger community. Pandering to the overly progressive crowd may score political points for a politician who is seeking future offices but it has never been shown to make citizens lives better.  I would hate Pittsburgh to become another… Caracas.

Kudos to Angelique Bamberg and Jason Roth of the Pittsburgh “City Paper” for their always well-reasoned and well-explained restaurant reviews.  Particular props for a recent review that complimented a restaurant’s restrained use of the “industrial look” in their fixtures.  Bamberg and Roth noted that it may be time Pittsburgh broke out of its adulation of its industrial past and went for interior architecture that provides more light and air. Bravo!  Less brick and more glass please, interiors and exteriors!

Kudos to Pitt, CMU and UPMC for their April 18^th conference, The Next Big [Data] Thing.  Let’s finally get some momentum on Pittsburgh putting together the obvious pieces of high tech know-how, software engineering, medical and bio-engineering expertise, and a good quality of life environment to start a world class, world ranked, world beating digital health industry.  The Pittsburgh Health Data Alliance is thinking the right way when UPMC’s Program Director notes that Pittsburgh has all the components present to become as dominant in digital health as coastal university centers.  Bravo!  Let’s get competitive here, economically speaking.

Lastly, I have to quote HM Queen Elizabeth who famously referred to a bad year in the Royal Family’s life as her “annus horribilis”.  Well over the last few months, Pittsburgh has suffered the same with the deaths of Thomas Starzl, Arnold Palmer, Dan Rooney and Henry Hillman.  Great cities always find new blood to carry on the vision and work of their best leaders.  Let’s support those who can fill the shoes of those Steel City heroes.

Good News x 2

There’s more evidence Pittsburgh is firmly established as a “high tech” locale.  This past week, two Pittsburgh start-ups were purchased by publicly traded “new economy” behemoths.  Thar Pharmaceuticals was purchased by privately held pharmaceutical company Grunenthal GmbH.  Headquartered in Aachen, Germany, Grunenthal has operations in Europe, Australia and Latin America, and reports 2015 revenues of approximately US$1.3 billion.  That news was followed by Pittsburgh-based startup FacioMetrics being purchased by Menlo Park, CA based Facebook which needs little introduction.

The acquisition of innovative startups by larger, more established and better capitalized companies is one of the ways technology progresses. Acquisition of the region’s creative startups by large, established companies is one of the ways that Pittsburgh’s high tech community progresses, growing larger and establishing its bona fides in the global economy.  Here’s hoping that both acquisitions result in the establishment of local Pittsburgh offices for Grunenthal and Facebook.  Equally as important, let’s hope an additional outcome of these purchases will provide Thar Pharmaceutical’s and FacioMetrics’ founding entrepreneurs with new capital to pursue future ideas and dreams here in western Pennsylvania.

An Early Christmas Present

That’s the only way to characterize Amazon’s announcement of a software development center for Pittsburgh.  This is when it gets good, as they say: Uber, Apple, Google and now Amazon.  Reports from the leasing agent say it’s an office of about a dozen people.  Well no need to guess – all one has to do is go to Amazon’s Web site [c’mon, you know you have it bookmarked for your daily visits] and scroll down to the bottom of the landing page [which you have never visited before since it’s not the part where you buy stuff] and look for “Careers”.  Search on “Pittsburgh” and about a dozen job postings will come up.

An exciting part of this news is that the company is taking a lot more space than is needed for 12 people.  My prediction is that within 18 months it will be 120 people.  Stay tuned.  And there are still plenty of coastal high tech names that should be taking advantage of Pittsburgh’s software talent pool and lower business costs.  I’m still waiting to hear that Amazon’s neighbor across Lake Washington, Microsoft, has finally figured out it makes more business sense to hire all those CMU engineers into a development center in Pittsburgh – independent of CMU’s on-campus facility – rather than move them to Seattle.

A Sad Day, for Nice People

OK allow me to say it: it’s a very sad day with the announcement of Arnold Palmer’s death.  The last few times he was seen on TV he was clearly showing his age which made this blogger think “Whoa, we will all pass away but this is gonna be a “big one” for western Pennsylvanians when Arnold goes”.  And so it’s happened.  Always a bad morning jolt to hear that 6AM National Public Radio report with news like this.

Later, on that same “Morning Edition” broadcast, an ESPN golf analyst heaped praise on Mr Palmer for what he did to raise the status and awareness of golf in America.  What caught my ear was the report’s focus on what a “nice guy” Palmer was, in all aspects of his life including his businesses and his sport.  A couple of Palmer’s contemporaries provided short excerpts giving testimony to how Palmer would engage with people – his Army or those that became his Army as a result – many of whom were dismissed by other golfing professionals.  Of course he did.  He was from western Pennsylvania.

Recall that Mr Rogers, Fred Rogers, was from Latrobe also.  I was really sad when I awoke to news of Mr Rogers death as well.  And I cried the morning I awoke to the news of John Heinz’s death.  Heinz was one of the nicest guys in politics and in my mind, destined to be President.  In light of this 2016 campaign, heck, the last four Presidential campaigns, I don’t think nice will ever again make a national political comeback.

Nice is Pittsburgh, western PA and the Tri State region.  Growing up our family would regularly car trip to the beaches and historic sites along the East Coast and people would say “Oh of course you’re from Pittsburgh; you’re so nice.”  It’s been a bit of an economic handicap for years when the region’s leaders could never be seen to brag about all the advantages for living and working here.  But it also has made the area a desirable place for many who seek the authentic in their lives and community relationships.  It should always remain so.

And so sad to know Mr Palmer is no longer among us.  We all need a hug.

Hail to Pitt!

No.  Not for their victory in last week’s rematch of the rivalry with Penn State.  [Full disclosure: I am a proud Pitt alum.]

Kudos to Pitt and Penn State for bringing back the game that put Pittsburgh back on the college football map AND brought in revenue to everything from the RAD to the businesses and workers in the city’s hospitality industry.  With the largest sports crowd in Pittsburgh history, about a dozen people shy of 70,000, this event certainly is a milestone for Pittsburgh’s sports reputation.  I’ll be the first to admit, these attendance numbers are small potatoes compared to most every Fall Saturday in college towns from Tempe to Westwood, Athens to Oxford, and Columbus to Austin – and if you don’t recognize those towns and what schools play there well, better stick to pro sports.

But this is a great reappearance of a tradition that will pay benefits to both Pitt and Penn State in terms of alumni involvement [and contributions], an economic boost for the City, and an added entertainment feather in Pittsburgh’s leisure industry cap.  Big events are “things to do” that excite residents and visitors.  As I’ve so often said, Pittsburgh needs more party.  Kudos to these universities’ athletic departments for having the vision to resurrect a fun tradition.

A Wake-Up Call for Downtown

Recently it was widely reported that groups of young people gathering downtown at night went on a “rampage” that involved a subsequent police chase on foot.  There were bystanders injured during this disturbance, including an elderly woman who was sadly at the wrong place at the wrong time.  Simply enjoying what has become an increasingly vibrant downtown area should not be cause for even the threat of harm, much less physical abuse.  Immediate action by City government, and I am not referring to only the police, is needed.

Back in June I was downtown for Stanley Cup viewing in a Market Square restaurant.  Prior to the match I decided to wander a bit to see what new businesses were in old familiar places.  Walking along Wood Street I noted to myself, and did so later to friends, that there was a particularly rowdy group of young men in front of the McDonald’s outlet.  Being older, and less cocksure of my abilities these days. the scene made me very uncomfortable as I squeezed by.  I can understand how any number of visitors or residents, seeing that type of behavior at the relatively early pre-8PM time, would think twice about strolling downtown again.

The bottom line here is that Pittsburgh’s downtown “ecosystem” is physically compact and metaphysically still in a rebirth phase.  Everything is scrutinized under a media reported magnifying glass.  It cannot sustain incidents that result in physical harm as well as negative reports of such and still expect to develop day-and-night vibrancy.  City officials must work with law enforcement but also with the appropriate social service agencies to address the causes as well as the very presence of this behavior.  Crime is a complicated issue that results from a complex sets of circumstances.  However, that can never excuse inaction on the part of those responsible for the public welfare.