EmailEmail
PrintPrint
Was summit good for business?
Blocked off for 2 days, nary a person in sight Downtown
Sunday, September 27, 2009

Mark Broadhurst, proprietor of Six Penn Kitchen, says people in his business know to "expect the unexpected." There's no better example than an unprecedented Pittsburgh event like the G-20 summit.

Some Downtown restaurateurs stockpiled extra goods in advance, believing the summit would boost business. Instead, with mandatory traffic restrictions and voluntary closures of offices and stores, it was like a February storm that cut foot traffic to less than half of normal levels.

Many retailers closed for two days and boarded up windows, fearing property damage from protesters in the Golden Triangle. Instead, the business district may never have been safer, populated by a garrison of ad-hoc beat cops.

Civic leaders hoped to promote Pittsburgh as a vibrant, resurgent city reinventing itself for the 21st century. Out-of-town visitors instead saw near-deserted streets suitable for the next apocalyptic film shot in Western Pennsylvania.

Thursday and Friday represented two days unlike any other in Downtown's history. A lot of local businesses lost money to make room for global-level discussion of how to right the world's financial troubles.

The question is: Was it worth it?

Yes, hopefully, says Mr. Broadhurst, whose normal Friday night dinner reservations exceeding 100 dwindled to near nothing. That's after a Thursday when business was not even 50 percent of normal.

"It's obviously short-term pain, but the long-term benefit is the people who plan conventions who now say, 'Wow, if Pittsburgh can pull that off, maybe it can handle our convention,' " he said.

That's the mantra of VisitPittsburgh President Joe McGrath, whose tourism group estimates the G-20 brought the region $35 million for area hotels and service industries related to the event, such as limousine and taxi services and private security firms. Workers at the David L. Lawrence Convention Center itself, he said, put in 41,000 hours of labor that translated to $1.3 million in wages -- far more than any event in its history.

He acknowledged there was a downside for Downtown businesses, though he was disappointed so many opted to close out of "Chicken Little" fears. There's no data on how many businesses went dark and how many people ventured into the Golden Triangle, but he and others estimated activity levels were about 20 to 30 percent of normal for two days, in addition to a lesser slowdown earlier in the week.

"Still, it's a very small investment to change the city's image," Mr. McGrath said, believing any view of lifeless streets was overshadowed by worldwide discussion of Pittsburgh's beauty and economic renewal.

"Long range, our big hope has been fulfilled, of helping to dispel so many perceptions of Pittsburgh that are negative and have held us back," he said. "We're going to get more than $100 million worth of publicity from hosting the G-20."

That's an economic projection that will be hard to quantify, just as it's difficult to calculate with confidence what the summit cost local businesses that have no role in lodging, transportation or security.

"There certainly is an economic cost. We missed two days of sales," said Tom Michael, president of Larrimor's clothing store on Grant Street. He said he closed because, "Our core customer wasn't around."

Nearly 100,000 people work on normal weekdays within the Golden Triangle, according to census data, and another 40,000 just beyond it around the North Shore, Station Square and Strip District.

Bill Ryan, a downtown business development specialist at the University of Wisconsin Extension, said Downtown Pittsburgh might generate more than $500 million annually in sales at 700-plus eating, drinking and retail establishments, according to private research estimates. That's about $1.5 million a day.

The International Council of Shopping Centers has projected that downtown workers across the country spend on average about $8 a day for food and $10 on shopping.

If, say, 75,000 fewer people than usual were doing that Thursday and Friday, that could mean $2.7 million less was spent by commuters Downtown.

Some of that would be made up by extra law enforcement officers, tourists and other G-20 visitors, but there are other costs as well. No one paid to use the 21,000 parking spaces in garages and lots Downtown for two days, a loss of as much as $420,000 to private operators and the city's parking authority if every space had been filled for $10.

Merrill Stabile, president of Alco Parking, the city's largest private operator, said that lost parking revenue can't be made up. People can't park twice tomorrow. But he hopes other Downtown businesses may have their losses offset if commuters work some extra hours to make up for staying home last week.

"Hopefully, for the sake of the city, there's some pent-up demand," he said. "Maybe people will work a little later, and then have dinner Downtown, or maybe work on a Saturday when they wouldn't have."

Major corporations had thousands of office workers either doing their jobs at temporary locations, telecommuting from home or simply taking the day off. In most cases, their officials maintained there was no actual loss of productivity due to the summit.

"Work continued as usual," said Ron Gruendl, spokesman for BNY Mellon, which had employees working from a variety of locations.

Federated Investors Inc., headquartered in a building a couple of blocks from the convention center, sent about 800 employees to the suburbs, moving several hundred of their computers to make the move more seamless, according to spokeswoman Meghan McAndrew.

In most cases, Downtown skyscrapers were simply off-limits to most people and guarded outside by highly visible security personnel. In the most extreme example, the entire PPG complex took on the look of a military compound, with closed-off streets, barbed wire atop fences and security personnel dressed as though ready for combat.

Near PPG in Market Square, where a reconstruction project has disrupted normal pedestrian flow for weeks, riot police began marching past the new Heinz Healey's store just one day after it relocated Wednesday from Station Square.

Clothier Chas Schaldenbrand said he didn't want to close the store for two days so soon after opening. But with just a trickle of customers, he noted, "This summit was supposed to be an economic boost. That sure turned sour quick."

At some higher-end restaurants including Palomino's in Gateway Center, business was "nonexistent," said its manager, Christine Pomella.

At Nine on Nine, located beside a heavily guarded security checkpoint on Ninth Street, owner Courtney Lynch Crawford said a 20 percent discount she offered to Downtown residents and an entourage led by Gov. Ed Rendell kept the restaurant from being empty Thursday night.

But she stocked up her bar's liquor supply in advance, which no one came in to drink. She saw no sign of the 3,000 international journalists supposedly in town.

"I don't know if it's worth it," she said of the summit. "I like to see Pittsburgh in the spotlight, but overall, I think it hurt everybody. ... Everyone beforehand was like, 'Oh, you guys are going to have a bonanza!' "

Phillip Injeian, owner of a violin shop carrying his name on Penn Avenue, was one of the few non-food establishments open around him. But he had no customers.

Closed up and down many blocks -- some with plywood-covered windows, others with metal grates shuttering entrances -- were banks, law offices, hair salons, printing outlets, art galleries, jewelers, novelty stores and much more.

Michael Edwards, president of the Pittsburgh Downtown Partnership, said the central business district presented a far different image from what he expected. He had envisioned roads and parking lots crowded outside of Downtown from commuters making their way to work, tolerating the inconvenience of hoofing across bridges.

Instead, "I think people just decided not to get in their cars those two days.

"I think the combination of some of the media anticipation of potential protests and the curtailment of vehicular traffic presented a real challenge to all business Downtown," Mr. Edwards said. "I think people were expecting the highways to be very congested and just didn't come."

Although the partnership group encouraged entrepreneurs to remain open, he said a much higher percentage closed than was the case in Seattle when it hosted a 1999 World Trade Organization meeting that drew massive protests.

For outsiders seeing the city for the first time, he said, "It would have been a more positive perspective if we had been operating at least at 50 or 75 percent of capacity. ... That's a missed opportunity, but on the other hand, nothing bad has happened Downtown, not even a broken window."

While most entrepreneurs interviewed expressed frustration with the downturn inactivity from the summit, many had some measure of belief in the long-term good.

Baris Budak, owner of Pizza Parma, paused from serving a group of Milwaukee police officers to recall that his Penn Avenue business was long inconvenienced by reconstruction of the convention center, but since then, stronger business overall has more than compensated.

"A couple of bad days in sales, you should be able to make up," he said.

Chris Briem, a regional economist for the University of Pittsburgh's Center on Social and Urban Research, said the long-term benefits may be so diffuse no one will really be able to identify them, if and when they arrive.

But unquestionably, he said, "There's been an amazing amount of coverage elsewhere, so you have to believe this has raised Pittsburgh's profile. You want to get on the radar for investment projects, for the ones that have flexibility of where they want to go, and Pittsburgh clearly has been the 'it' story for the last week."

Staff writers Erich Schwartzel and China Millman contributed to this report. Gary Rotstein can be reached at grotstein@post-gazette.com or 412-263-1255.
Looking for more from the Post-Gazette? Join PG+, our members-only web site. You'll get exclusive sports content, opinion, financial information, discounts from retailers and restaurants, and more. Our introduction to PG+ gives you all the details.
First published on September 27, 2009 at 12:00 am