The Pirates' long voyage

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You don't have to be a baseball fan to appreciate what a winning Pittsburgh Pirates franchise can do for Pittsburgh. If you're anywhere near Downtown on a weeknight or weekend this summer, you can see it and feel it.

Before the Major League All Star break, the Pirates enjoyed nine sellout crowds and are on track to draw over 2 million fans to the North Shore this year. The Pirates are winning. They stand a good chance of ending this season with a winning record for the first time since 1992.

This success has reminded me of the sometimes tumultuous voyage the city and Pirates started in the 1990s and why we embarked on it.

After peaking in the early 1990s on the field, the Pirates had run headlong into the realities of the changing business of baseball. The ball club played with one of the smallest payrolls in baseball in an outdated Three Rivers Stadium before dwindling crowds, while professional baseball had begun to move in a different direction.

In late 1993, the owners of the Pittsburgh Pirates informed newly elected Pittsburgh Mayor Tom Murphy the team would be sold. Before he was inaugurated, he called me and my firm to request that we guide the city to find a buyer from both the investment banking and legal standpoints. A clause in the contract empowered the city of Pittsburgh to take the lead to secure the future of the Pirates in Pittsburgh.

Public sentiment then was that the Pirates didn't need any help and that public moneys could be better spent elsewhere. Ultimately we demonstrated that indeed the team was not as profitable as generally believed and that the primary issue was of preserving an economic development engine. In retrospect, the timing was right. As unreceptive as the climate was for public funding then, it would be more difficult to imagine the public supporting the same kind of funding arrangements today.

After a sometimes arduous process, we selected the Kevin McClatchy group to buy the Pirates in 1995. We helped build a group of investors around Kevin who were predominantly based in Western Pennsylvania.

Looming, however, remained the real possibility of a move. New ownership had the option to sell the team without a new ballpark by the 2001 baseball season.

Along with David Roderick, former chairman and CEO of USX Corporation, I chaired the Forbes Field II Task Force. Our team worked in partnership with Mayor Murphy, leveraging combined leadership to make sure we identified the right location and arrived at the right plan to design, build and finance the project.

We explored all options. We almost located the ballpark Downtown, but we realized that its strength as an economic development anchor was stronger as an extension of Downtown on the North Shore as part of a package that included a new convention center and Heinz Field. The North Shore also offered an unrivaled panoramic view of Pittsburgh's skyline.

So was it worth it? Yes.

At a time when the region was losing corporate headquarters, jobs and people, we knew if the Pirates had moved, it would have sent the wrong message to the nation on the economic viability of this region. The Pittsburgh Pirates also stood for the region's brand. We believed the Pirates' value to the region was about much more than baseball.

In the years since PNC Park and its neighbor Heinz Field were built, the North Shore added office buildings, Stage AE, the Hyatt Place Hotel, headquarters for well-known corporate names including Del Monte and Equitable Resources, and several restaurants and night clubs. This amounts to more than $125 million in private development. This kind of development generates millions in tax revenue each year.

Add to this new infrastructure improvements including riverfront parks, new parking facilities and the Port Authority's North Shore Connector light rail line, all of which serve to enhance the quality of life in Pittsburgh.

In 2013, the Pittsburgh Pirates are scheduled to play 162 games, 81 of them at home. Since PNC Park opened in 2001, the ballpark has attracted roughly 21.6 million fans. This is an average of 1.8 million fans per year.

According to the Greater Pittsburgh Convention & Visitors Bureau, in 2012 the Pittsburgh Pirates generated an average of $2.1 million in direct spending per home game, which totaled at least $164 million over the course of the season.

This drives a stronger commercial real estate market, increased property values and healthier revenue streams for local government.

The story of the Pittsburgh Pirates over the past 20 years reveals that a good recipe for economic development requires a multi-pronged approach, where the ball club and its ballpark serve as economic anchors.

When the Pirates win, the team bolsters regional pride, drawing crowds that enjoy the experience and want to come back. Everyone benefits.

When we first structured the financing package so that Pirates ownership could re-invest in its organization, pay its players competitive salaries and ultimately put a winning ball club back on the field, we did not expect it to take this long. But if 2013 is any proof, the economies are there, and so are the results. Winning is a necessary ingredient to fulfilling the region's Major League potential.

opinion_commentary

Bill Newlin, a former chairman and CEO of Buchanan Ingersoll and a former executive vice president of Dick's Sporting Goods, is chairman of Newlin Investment Co.


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