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PDP Unveils the 2021 State of Downtown Pittsburgh

Friday, May 14, 2021

On May 11 and 12, the PDP hosted two days of focused discussion on subjects that included the Future of Commercial Office Space, the Future of Retail & Restaurants, the Future of Downtown Mobility, Welcoming Visitors Back to Downtown, Public Safety and Vulnerable Populations, and Downtown Development. Each session explored subject areas that offered greater insight into how Downtown Pittsburgh may successfully emerge from the pandemic.

Across Greater Downtown, 42 projects are currently under construction, representing 1,516 residential units, 219 hotel rooms, 1.8 million square feet of office space, 267,000 square feet of retail and restaurant space, and 2,100 parking spaces. This represents $1.7 billion in new commercial projects, with an additional $2.5 billion in announced investment activity.  With such significant development occurring, an early discussion focused on the future of Downtown commercial office space, with Mark Anthony Thomas of the Pittsburgh Regional Alliance moderating the session. County Executive Rich Fitzgerald offered opening remarks on Pittsburgh’s resilience before a panel of experts provided insight on prevailing commercial market conditions. Hybrid working models and providing safe environments for returning workers have been at the forefront of rethinking traditional commercial office spaces. “There is now a need to provide options for employees to work in the way that’s best for them,” said Andrea Korade, Architecture & Design Sales Manager at Knoll. Carrie Holstead, CEO of Carrie S. Holstead Real Estate Consultants, followed with, “there is a significant emphasis on health and wellness.”

Herky Pollock, an executive vice president for CBRE, moderated a session on how Pittsburgh’s restaurant and retail sectors are adapting to meet the needs of a Downtown in transition, which included insight from two national retail market experts who shared how Downtown Pittsburgh can reposition itself coming out of the pandemic. The impact of the pandemic was severe at a national level for restaurants and retailers. Downtown Pittsburgh’s own market segments experienced unprecedented impact, with 77 restaurants and retailers permanently closing during 2020 and into the first quarter of 2021. Yet, even with such challenging conditions, Downtown still managed to welcome 29 new restaurants and retailers including; Gaucho Parrilla Argentina, Scarpino, gi–jin, BLAQK House Collections, and Hand & Stone Massage and Facial Spa. With additional new businesses in the pipeline, like the new urban format Target store, Five Iron Golf Simulator, and Con Alma, there is an increasing level of optimism about the future. Dana Telsey, CEO of Telsey Advisory Group expects a ‘supercharged change’ in consumer spending, a continued emphasis on safety and cleanliness standards, increases in consumer traffic, as well as other impactful changes created by the proliferation of hybrid offices, online sales, and innovations through technology. Telsey noted “Recovery will be shorter than in a typical recession” and that “spending ability is greater than we’ve ever seen.”  Larisa Ortiz, managing director of public and nonprofit solutions for Streetsense, noted that a focus on “visitor strategies and destination marketing,” along with “amenities and services that reach a new employee mindset” should be prioritized. That sentiment was reiterated by Tolga Sevdik, of Richard DeShantz Restaurant Group, who noted “we’re adapting to provide fast, casual, designs and use digital platforms to better serve our audiences and cater to their needs, whether in-person, via delivery, or to-go”, a significant shift from their established ‘dine-in’ format. Sevdik summarized the overall sentiment of the participants with “Downtown is ready – we need our customers to come back – and we’re excited to welcome them back.”

With the return of workers and visitors ‘top of mind’ for property owners and shopkeepers, Jerad Bachar, President and CEO, VisitPITTSBURGH moderated a session about welcoming visitors back to Downtown, a vital but mostly absent component of the Downtown economy in 2020. Allegheny County’s tourism industry lost close to 25,000 jobs by the end of last year, and Greater Downtown’s hotel occupancy dropped to just 5% in April 2020. Much like the restaurant and retail industry though, the outlook is encouraging. David Sher, General Manager at the Fairmont Pittsburgh Hotel, noted “We’re poised to win, and build back a stronger Downtown than ever.” Tim Muldoon, General Manager at David L. Lawrence Convention Center concurred, noting “there’s strength in our community, and people are excited to get back to work and showcase this great city we all love.” On the festival front, Sarah Aziz, Director of Three Rivers Arts Festival at the Pittsburgh Cultural Trust, noted recent shifts in safety protocols have allowed for featured music concerts, previously schedule to take place at the Byham Theater, to now move to the Dollar Bank Main Stage at Point State Park, underscoring the need for agile responses as restrictions continue to be lifted. Hotels Downtown continue to face their own set of challenges, with workforce shortages amongst them. Currently, Downtown offers more than 6,400 guest rooms to visitors and business professionals, but has another 219 rooms in the pipeline. The Landing Hotel Pittsburgh, which will connect to the Rivers Casino, is currently under construction, and The Industrialist Hotel on Wood Street opened last week, adding 124 more rooms to the Golden Triangle. The return of conventions will no doubt support occupancy challenges with an upcoming RV show, volleyball tournament, and 50+ events scheduled for the remainder of the year. 

A Mobility session, hosted by Chris Watts of the Pittsburgh Downtown Partnership, unveiled the Downtown Mobility Plan (DMP) and a new website built for community engagement and feedback. With the Plan as the cornerstone of discussion, the session provided a compelling vision of the impacts of mobility and infrastructure on Downtown and the multi-year effort to develop a people-first strategy. Karina Ricks, Director, City of Pittsburgh’s Department of Mobility and Infrastructure (DOMI), noted that this is an opportunity to put resources together and “use that leverage to ‘seize the moment,’ ‘be bold and experimental,’ and do something great for the community.”

The fifth session offered insight into how Downtown is addressing public safety and supporting our most vulnerable neighbors. Moderated by Laura Drogowski, Manager of the City of Pittsburgh’s Office of Community Health & Safety, the important discussion explored how the police and outreach services have been working together to transform the Downtown experience. Wendell Hissrich, Director of the Department of Public Safety, and Chief Scott E. Schubert of the City of Pittsburgh Bureau of Police noted the critical nature of working together to tackle complex issues, and to better understand the city’s most vulnerable community members. Hissrich stated that we must “work with businesses to improve their security and relationship with the public.” Shubert agreed, noting “all of us want Downtown to be safe. We have to work together.” A highlight of the session provided insight into the new co-response model being implemented by the newly formed Outreach Team at Allegheny Health Network and the Pittsburgh Bureau of Police. Dan Palka, Administrative Director, Program for Homeless and Urban Poverty Medicine Center for Inclusion Health at Allegheny Health Network, shared his collaborative experiences with the police noting “the expectation was that there would be hesitancy from the police, but there has been a wildly contrary experience to that. The teams working on street are in a process of relationship building… that is the foundation of getting people to care and support they need. The context of a ‘relationship’ allows people to feel more supported.” Also of note was a presentation by Linda Metropulos, President, Metropulos Development LLC, and Board Chair of the $21 million Second Avenue Commons project, who provided updates on the 45,000 square foot facility in Downtown Pittsburgh that will provide shelter and comprehensive wrap–around services for homeless adults. Made possible by contributions of PNC, Highmark, UPMC, and ongoing fundraising efforts from local foundations, the facility is the first–of–its–kind in Allegheny County and will operate as a year–round, low–barrier shelter for adults with completion expected in 2022.

Caitlin Fadgen, Senior Manager of Economic Development at the PDP, opened the final session of the series with an overview of construction projects underway throughout Downtown, and then introduced the final State of Downtown session entitled ‘Digging Into Downtown Development’ which shared details on a myriad of highly anticipated projects; City Club Apartments conversion of the YMCA, Carnegie Library of Pittsburgh’s Downtown $5.3 million renovation, Smith & Fifth development at 441 Smithfield Street, the recently completed Industrialist Hotel, Kaufmann’s Grand on Fifth, Acram Group’s newly named office tower in the Strip District – 1520 Smallman Street, Riverlife’s Completing the Loop Project, Renovations to Heinz Hall, Duquesne University’s new College of Osteopathic Medicine, and the Lower Hill redevelopment. Each project underscored a city undergoing a positive reemergence. While the total number of permits issued for Greater Downtown was down 20% in 2020 compared to 2019, the total estimated project costs were 4% higher in 2020 than compared to 2019. The increase was created through the high value of active projects currently in development in both the Strip District and Uptown. The Strip nearly doubled project value in 2020 compared to 2019, while Uptown saw a 76% increase in active project value.

The sessions showcased the resilience of the Downtown community in 2020, and the abundant optimism when discussing a Downtown ‘rebound.’ While there are challenges ahead, there is also a significant opportunity for a robust recovery and to reforge the city in a way that is safe, vibrant, and equitable for all – something that was consistently and enthusiastically expressed by all State of Downtown participants.

To watch the State of Downtown Pittsburgh ‘Reforge Edition’ sessions, or to view the State of Downtown Report 2021, please visit downtownpittsburgh.com/research/state-of-downtown.

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