When government and business join forces, economic development frequently follows
July 25, 2013 4:00 AM
Another a view of part of Southpointe, off Interstate 79 in Washington County.
The business directory for Thorn Hill Industrial Park, a suburban RIDC park in Marshall and Cranberry.
The entrance to Keystone Commons, one of the city's urban RIDC parks in Turtle Creek and East Pittsburgh.
Southpointe, with a residental development in the foreground.
A view of part of the Southpointe industrial parks, which cover more than 800 acres in Cecil.
By Len Barcousky Pittsburgh Post-Gazette
Industrial parks that have sprouted all across southwestern Pennsylvania demonstrate how government and business can work together, Jeff Kotula says.
Mr. Kotula wears two hats: He is president of the Washington County Chamber of Commerce and director of the county's Department of Economic Development.
His agencies have shepherded the development of Southpointe I and Southpointe II industrial parks, the familiar landmarks along Interstate 79 near Canonsburg that have brought thousands of new jobs to the county.
"When the public and private sectors work together, you can get a finely oiled machine that can do some serious economic development," Rock Ferrone said, describing the role of industrial parks. Mr. Ferrone is managing principal of Rock Airport of Pittsburgh LLC, which has sought to develop privately owned RockPointe Business Airpark in West Deer and Indiana Township.
The Regional Industrial Development Corp. of Southwestern Pennsylvania, better known by its RIDC initials, is a nonprofit that has been preparing space for new businesses since 1955. Operating in 10 counties around Pittsburgh, the private agency has shifted its focus in recent years, often restoring environmentally damaged brownfield real estate for new office, storage and manufacturing uses. Such brownfield properties had been home for decades to heavy industries such as steel plants, coke works and machine shops.
"Those sites were the economic centers of their communities," RIDC president Don Smith said. "It's our goal to restore them and get jobs and investment back into those areas after 30 years of disinvestment."
Washington County officials began making plans for Southpointe in the early 1980s. They had their eyes on a large tract that had been the site of a reform school and later a state mental hospital, according to William McGowen, executive director of the county's Redevelopment Authority. The state transferred land for Southpointe I to Washington County in 1986, and the first industrial and commercial buildings were completed in 1993.
Today, the Southpointe parks cover more than 800 acres in Cecil. In addition to offices and factories, they offer housing, a hotel and a golf course.
"You can live, work and play right in the park," Mr. Kotula said.
As real estate professionals always say, location matters.
"This land was close to [Pittsburgh International] airport and had easy interstate highway access," Mr. Kotula said. Lower tax rates were an added attraction.
Economic development efforts in the area got a boost with the growth of the Marcellus Shale natural gas industry.
"Washington County is marketing itself as the energy capital of the east," Mr. Kotula said. The presence of companies such as Range Resources, Chesapeake Energy, Consolidated Natural Gas, Noble Energy, MarkWest Energy, Rice Energy and WPX Energy has attracted related businesses. Those companies, seeking to provide goods and services to gas exploration firms, want to locate in industrial parks close to their customers, he said.
While Southpointe I is fully developed and only a few parcels remain in Southpointe II, some additional space is expected to be freed up later this year. That's when Mylan Inc. will open its new 280,000-square-foot headquarters in Southpointe II. Mylan, best known as a maker of generic drugs, relocated its headquarters to a 95,000-square-foot building at Southpointe I in 2003.
Even as Southpointe II was filling up, Washington County officials were making plans to develop another 900 acres in Cecil on the east side of I-79. That project is called Cool Valley industrial park.
Beaver County is in the running for a multibillion-dollar Royal Dutch Shell petrochemical plant that would use natural gas from the Marcellus Shale layer as its raw material. Washington County wants to be prepared to provide space for new businesses linked to the natural gas boom.
"We want to have a site ready to go when plastics companies and fertilizer makers want to locate manufacturing facilities, offices or headquarters here," Mr. Kotula said.
The Southpointe parks are among eight economic development sites in Washington County. Others include Alta Vista Business Park in Fallowfield and Starpointe Business Park in Hanover and Smith townships.
Occupancy rates at RIDC industrial parks average about 90 percent, Mr. Smith estimated. That statistic has the nonprofit looking to anticipate and build for future needs.
"We've not been involved in speculative development, but we need to find a way to have more inventory in place," he said.
Once a company makes a decision to relocate, executives want to move quickly. To design, get approvals for and construct a new building from scratch can take as long as two years, and some companies do not want to wait, he said.
RIDC has developed more than 3,000 acres since 1955. Its earlier efforts included well-known suburban parks in O'Hara, Thorn Hill in Marshall and Cranberry, and RIDC Park West in North Fayette and Findlay.
RIDC's urban parks include the Lawrenceville Technology Park, Industrial Center of McKeesport, City Center of Duquesne and Keystone Commons in Turtle Creek and East Pittsburgh.
In addition to preparing old industrial sites for new uses, RIDC has been involved in finding new tenants for existing factories.
In 2010, RIDC began to work with the Westmoreland County Industrial Development Corp. and the Pennsylvania Industrial Development Authority to determine the best use for the 330-acre former Sony Technology plant in East Huntingdon. RIDC officially took over the site in the spring of 2012. Plans call for converting the 2.8 million square feet of building space into a multi-tenant facility.
Those plans moved forward this month when Westmoreland County Community College broke ground for a $9.4 million Advanced Technology Center in the ex-Sony factory. Next year, it will be the new home for the college's workforce development program.
In addition to having classrooms and laboratories, the technology center will serve as an incubator for new and expanding manufacturing businesses, officials said.
RIDC is not alone in placing emphasis on bringing new life to old industrial locations. Butler County's Community Development Corp. has done similar restoration of brownfield sites at its Pullman Center and Victory Road business parks. Pullman Center, located in Butler and Butler Township, was home to railcar manufacturing plants. Victory Road park in Clinton was the location of a U.S. Steel Corp. sintering plant, where the company produced raw materials for iron making.
Development always brings with it risk, and not all industrial parks turn out the way their backers would have hoped.
Mr. Ferrone, a businessman and inventor, bought the former West Penn Airport in West Deer and Indiana Township in 1998. He hoped that the airport and adjoining business park would attract companies seeking to be close to an airfield. Mr. Ferrone operates his own company, Rock-Built Inc., in RockPointe park.
Over the years, more than $22 million in public money, much of it in general aviation grants, was allocated for improvements at the airpark site, including an extension of the airport runway to 3,550 feet.
Facing claims from multiple creditors, Mr. Ferrone took Rock Airport of Pittsburgh, the parent company, into Chapter 11 bankruptcy in 2009 in an effort to reorganize finances. The property is now for sale either as a whole or in parts, he said.
While RockPointe has struggled, other projects continue to come off the drafting boards.
RIDC, for example, is undertaking a 179-acre industrial park at an urban site along the Monongahela River. Working with four southwestern Pennsylvania foundations, RIDC formed a partnership to acquire the former site of the LTV coke works in Pittsburgh's Hazelwood neighborhood. Called the Almono project, it is named for the region's three largest rivers, the Allegheny, the Monongahela and the Ohio.
While the tract was adequately served by rail and barge connections when it was home to a coke works, it lacks good road and pedestrian access and needs utility service upgrades. Infrastructure improvements, which are expected to cost more than $130 million, would begin over the summer, Mr. Smith said.
Elsewhere in the region, Washington County commissioners recently authorized $1 million for infrastructure at Cool Valley, that county's new industrial park. Site preparation is likely to start in the next six months. County officials hope the new economic development effort will do as well as its nearby siblings.
"The success of projects like Southpointe shows that when you have a government that is willing to invest and an eager partner in the business community, great things can happen," Mr. Kotula said.