Major League Baseball's annual mid-season All-Star Game will bring some of the sport's luminaries to Pittsburgh's classic PNC Park in July. But, already, a line-up of real estate's all-stars are engaged in a massive mixed-use make-over, as the city once known as “hell with the lid off” moves toward what might one day be regarded as its Renaissance III, with downtown housing as a lynchpin. “There are more than $400 million worth of construction projects in progress or about to start, and virtually all of them have a housing component,” says Patti Burk, director of housing and economic development for the Pittsburgh Downtown Partnership.
Even as the National Association of Realtors—backed by the NAHB—mounts opposition to one of the major projects in the works, Steel City's on a roll that few insiders expect to slow. The two organizations want to derail PNC Financial Services Group's $170 million plan to build a new skyscraper headquarters complex that would include residential condominiums. The lobby groups allege that the PNC deal would breach federal prohibitions against mixing banking and real estate that have been in place since the savings and loan crisis of the 1980s
“It won't kill the momentum at all,” Burk says of the NAR-NAHB dispute with the Office of the Comptroller of the Currency, which oversees federally chartered banks, and has given PNC its blessing. “It's only 32 units out of 2,000” that are already under construction, coming on line, or planned over the next 18 to 24 months.
What's known as Pittsburgh's Renaissance I came about in the late 1940s and 1950s, when smoke control laws led to a cleanup of the city's famed steel mills and its three rivers—the Monongahela, the Allegheny and the Ohio—and the construction of new buildings, bridges and parks. Renaissance II brought the city Three Rivers Stadium, USX Tower, PPG Place and other trophy downtown properties.
But, by the end of the ‘70s, the city's factories began closing, leaving thousands unemployed, and laying waste to the riverfronts. By 1990, Pittsburgh's population was down to just under 370,000, almost a 50 percent drop in residents from 1950. Over the next decade, another half of the population fled the area, with the city bottoming out below 200,000 in the year 2000.
BOUNCING BACK Today, though, a significant downtown housing market has emerged, which includes the central business district and five neighborhoods that surround it, many of the areas bedraggled and downtrodden. According to a study by the H. John Heinz III School of Public Policy and Management at Carnegie Mellon University, about 140,000 people work in downtown Pittsburgh everyday; 10,500 people live downtown, and thousands more want to.
“Our projection of the demand (for) downtown housing by young professionals, which incorporates the existing supply and upcoming units for 2006, shows that demand far exceeds supply for this demographic,” the report concludes. “Astonishingly, downtown Pittsburgh's population is growing at a healthy rate, despite it being in a county that has been declining in population since the early ‘80s. Therefore, efforts should be made to increase the pace of downtown residential development.”
Bob McGurk, regional director of Forest City Enterprises, an $8 billion, NYSE-listed real estate company engaged in various stages of development in several of Pittsburgh's proposed mixed-use projects, concurs. “Pittsburgh is a great town,” says McGurk. Cleveland-based Forest City wants to build 1,250 condo units in six buildings 10 to 25 stories tall as part an expanded entertainment/residential community in Pittsburgh's South Side district. “It's an old Northeast town, but it has a lot going for it, especially with all that's happening downtown.”
Of the nearly 2,000 residential units currently under development or in the planning stage, the lions' share—1,760—are rental apartments. If Forest City's for-sale high-rise units come on line, it will balance out the mix. Forest City is planning each project with its own identity and client base. For example, although both the 82-unit 151 First Side property and the 61-unit Carlyle are located in the city's central business district, known as the Golden Triangle, one is a new, sleek, 18-story tower overlooking the Monongahela, and the other is a redo of a century-old bank building.
The 151 First Side project, which broke ground in September, is the first residential tower to be built downtown since 1968. The building is a first for developer Ralph A. Falbo Inc., a local company with four decades of experience renovating low-income housing. One to three-bedroom units range in size from 1,000 to 3,400 square feet, with nine-foot ceilings (10 feet on the upper floors). While the $1.51 million penthouse was one of the first units to sell, the towers other units range from $295,000 for s one-bedroom to the $900,000s for a two-bedroom.
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