With the announcement that tech giant Amazon is searching for a second headquarters, and the promise of more than 50,000 high-paying jobs, Pittsburgh started to salivate. Several media personalities, politicians and ordinary PIttsburghers took to social media and practically begged Amazon to consider the Steel City. Pittsburgh Mayor Bill Peduto announced that his staff was working with Allegheny County’s economic-development team on an application. Allegheny County Executive Rich Fitzgerald told TribLive that pitching Amazon is “right in our sweet spot.”
But economic factors and development realities in Pittsburgh indicate the region is far from Amazon’s sweet spot. Amazon’s list of preferences is intimidating. The tech company is first looking for a 500,000-square foot existing building that is close to a population center of more than 1 million people and near major highways. This will already be hard to find in Pittsburgh, as the city’s biggest building, the U.S. Steel Tower, only currently has about 300,000 square feet available.
With Amazon’s most preferred option most likely off the list, the second option would be a 100-acre pad-ready development site. Pittsburgh is filled with brownfields, old industrial sites the require clean up, and pad-ready sites are hard to come by. Especially ones that are “close to major arterial roads to provide optimal access,” as Amazon is demanding. Some have indicated the old Civic Arena site as a possibility, but that site is only 28 acres.
Additionally, the 500,000-square-foot site would just be the first part of Amazon’s development. Eventually, the company is looking to build a headquarters similar to its 8-million-square-foot Seattle headquarters.
The larger Almono site in Hazelwood has also been floated around as an option, but this site, while already in redevelopment, comes up short in Amazon’s requirement of having “direct access to rail, train, subway/metro, bus routes.” Currently, the Almono site does not connect to light-rail or even to one of the city’s three busways. Only three buses serve part or all of Almono — the 56, 57 and 58 — and they only arrive about every 20-30 minutes; hardly a vibrant public-transit hub. Not to mention the vision of Almono site is to house multiple companies, not one large one.
Chris Briem, an economist at University of Pittsburgh’s Center for Social and Urban Research, says this is out of scope for the Pittsburgh area. “Is there is site for them?” asks Briem. “Eight million square feet, I mean, that is like three U.S. Steel Towers. … Space has always been a terrible challenge for Pittsburgh.”
Besides the lack space available, Amazon is also looking for an extensive incentive package of tax-breaks, relocation grants, fee reductions and site preparation. Pittsburgh and Allegheny County can only offer limited incentives, like Tax Increment Financing and Local Economic Revitalization Tax Act District distinction, which provide city and county tax breaks for a few years.
However, most regions can offer these, so Briem says further incentives will have to come from the state. Briem adds it will be difficult to convince the state to allocate money for incentives when it is currently struggling to pass a budget. Also, Briem points out that Pennsylvania has a history of offering large state subsidies to companies and getting burned.
Pennsylvania gave $70 million in incentives to Volkswagen to build a plant in Westmoreland County. It opened in 1978 and by 1988, it was closed. But, Pittsburgh does have advantages other places can’t offer. The region has some of the lowest housing costs in the country, and Pittsburgh is emerging as a world leader in robotics and artificial-intelligent technologies.
However, Pittsburgh probably doesn’t have a large enough workforce, filled with highly-educated workers, to satisfy Amazon. The company is requesting filling an estimated 50,000 positions. Bloomberg columnist Conor Sen paints grim prospects for Pittsburgh. “Consider a place like Pittsburgh,” Sen wrote in a Sept. 7 Bloomberg article. “Its metro area is 2.35 million people, and its labor force is 1.2 million. But the size of its labor force hasn’t grown in 25 years. Even with the talent [Pittsburgh’s] well-respected universities produce, [why] is Amazon, a company that thinks of growth in terms of decades, going to locate a headquarters in a place where it might have to hire over 4 percent of the metro area’s labor force with uncertainty over whether that labor force will ever grow?”
And, unfortunately, the final nail in Pittsburgh’s Amazon coffin might be the Pittsburgh International Airport. The airport still lacks the international access that a hub like Atlanta, Chicago and even Philadelphia can offer. It also lacks a direct flight to Seattle, home of Amazon.
Well-known urban planning expert Richard Florida corresponded with Pittsburgh City Paper via Twitter about Pittsburgh’s chances at getting Amazon. Florida, a former Carnegie Mellon University professor and Pittsburgh fanboy, indicated our airport may not be up to task.
“I adore Pittsburgh, but I put it more of a sleeper category along with, say, Nashville,” wrote Florida in a tweet to CP. “Great assets but lacking in global airport access.”
Politicians like Peduto and Fitzgerald shouldn’t be faulted for trying, as Amazon moving to Pittsburgh would be a game-changer and would potentially turn around Pittsburgh’s shrinking population problem. And Florida hinted in a tweet that Amazon should consider cities that might struggle to offer incentives like Pittsburgh or Detroit, because of the good the company could do.
“On the Amazon HQII decision: they should take the highroad, turn down any form of incentives & create a model of inclusive prosperity,” tweeted Florida on Sept. 7.
But in a world where large companies like Amazon control so much influence, Florida indicated that those companies are likely to pass over Pittsburgh for cities that makes more sense economically, and those tend to be regions that are already thriving.
“Exactly right. [Amazon] will go to established places that are already talent magnets,” tweeted Florida on Sept. 7. “The world is getting spikier.”
This article appears in Sep 6-12, 2017.
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So many mis truths in this I don’t even know where to begin, but I’ll do my best.
-the 500,000+ sq. ft. requirement for existing space is to get Amazon an immediate presence and does not need to be part of the long term project. We have that space in 525 William Penn Place, the downtown building BNYMellon abandoned a couple years ago. Also the old Westinghouse campus in Churchill.
-Re brown fields, the ALMONO site is already cleaned up, contrary to your “Blogh”.
-Furthermore on the ALMONO site, the requirement for direct access to rail, train, subway/metro, bus routes. is not all inclusive. The requirement was for mass transit, not all forms of mass transit. How hard would it be to route some buses throughout there, and frequently? Not very.
-Space? A lack of space in Pittsburgh?!?! There is an abundant amount of space, and in the urban core no less. The civic arena site may “only” be 28 acres but “3 US Steel towers” could easily be built there. If that is not enough there is all the vacant lots Buncher is sitting on in the Strip, only a few blocks away. If that is still not enough, in the other direction there is the vacant lot on Grant St next to Oxford Center which is prime for a tall skyscraper. What sits between these 3 sites? The Steel Plaza subway station.
-Yes, State incentives will need to be a huge part. But to reference the Volkswagen plant? That was almost 40 years ago!!! But lets not mention the Shell cracker plant just last year in which the State played a huge and pivitol role (Thank you Governor Corbett). If there is a weak link in all of this it is Gov Wolf.
-The notion that Pittsburgh can’t fill a 50,000 employee requirement. These 50,000 positions will not happen overnight, but over a 15 year period.
-Finally on the issue of the airport. True, we currently don’t have a flight to Seattle. It will happen, its only a matter of time even without Amazon. If Amazon does decide on Pittsburgh then the flights will follow, and soon. If not then a revenue guarantee to the airlines will be part of the incentive package. Furthermore, such a massive corporate relocation will stimulate overall air service demand and PIT has the excess capacity to deliver – unlike airports in many of the competing cities. Any perceived issue about our airport is a nonstarter.
This baby isn’t even born yet and already you are talking about nails in coffins. If there is a hinderance to Pittsburgh not landing something like this, it is not the grocery list of factually incorrect statements in your blog, it is the continued attitude of defeatism so prevalent among Pittburghers, and you are exhibit A.
Agreed ^ with Matt Hahn. Direct flights to Seattle could be negotiated with an airline because the demand would be present with HQ2.People re locate for jobs all the time so the argument that there aren’t enough workers here doesn’t even make sense. What about re purposing a spanking newly -built dead mall Pittsburgh Mills ? There is 200 acres right there. CMU and University of Pittsburgh and other quality schools here churn out grads that wouldn’t have to leave the area to find work. Low cost of living along with Pittsburgh’s vibrancy and recreation always help make a region more enticing for young people to move here. I don’t want to hear about bad weather either. Seattle is just as rainy as Pittsburgh and Chicago, Minneapolis, Detroit are cold, Denver gets bad blizzard conditions and the Texas , Fla, etc have hurricanes.
Thanks for reading Matt Hahn and Rhonda Deakin. Your input is always appreciated. I would like to address a few things since your comments claim we are printing falsehoods. While there might be enough space available at 525 William Penn Place for the initial Amazon move, that does not address the fact that Amazon is looking to expand that headquarter space, which would be hard to come by in Pittsburgh. Building three giant towers at Civic Arena site could happen, but that would likely go completely against the vision for that area (mixed use with a large chunk of affordable housing), worked so hard by community members in the Hill District. Churchill is also far from frequent bus service and is not pedestrian friendly, as Amazon is looking for.
Second, Pittsburgh City Paper never said Almono is a brownfield. CP stated that Amazon does not fit into the vision of Almono and the bus service there is bad. And the realities of expanding more transit service in PGH is predicated on Harrisburg allocating more funding. Given that the GOP state house just proposed millions in cuts to Port Authority, this seems very unlikely.
Much of the criticism of this article is focused on what COULD happen if Amazon chose Pittsburgh. It’s pretty clear that Amazon is looking for places that are ready to offer everything upfront, not as a condition. That being said, having Amazon here would be huge and CP isn’t trying to quash a deal, just reporting facts and the opinions of experts.
Best,
Ryan Deto
Staff Writer
Pittsburgh City Paper
ryandeto@pghcitypaper.com
Facts? Sheezz, just what the world needs, another media outlet picking and choosing “facts” and how to use them.
To help you along – you translated the impact of certain “facts” via your opinion (or agenda as it more likely appears). You honestly think bus service will be a stumbling block to Amazon coming to Pittsburgh! Come on, you’re surely not being serious.
Space – those are really the only available sites you can identify? And to claim the Civic center site would not be a candidate because Amazon is not part of the original plan – is that really the type of “fact” you’re basing your article on?
Why not mention the cost of living as a “fact”?
You barely mentioned CMU when it’s a fact CMU is truly unique and a potential game changer that virtually no other city can remotely approach.
You look at PIT in a snapshot today? But not the available capacity and the obvious growth taking place? Do you REALLY think that if Amazon showed up in Pittsburgh no airlines would fill the west coast need?
You can defend your “work” all you want, but its “shotty” at best and appears to have a very specific agenda at worse.
To clarify one point, Amazon is willing to consider an existing building for their first phase, but they would actually prefer a shovel-ready site. From their RFP:
“If existing buildings are available that can be retrofitted/expanded within an acceptable budget and time schedule, Amazon may consider this option; however, the company acknowledges that existing buildings may not be available to meet its requirements. As such, Amazon will prioritize certified or shovel-ready greenfield sites and infill opportunities with appropriate infrastructure and ability to meet the Projects timeline and development demands, as set forth below.”
With respect to things like bus routing and a direct flight to Seattle, Amazon would presumably have to be persuaded there will be sufficient public support to make sure that sort of thing happened. But my guess is that for something like this, the necessary public officials will all be in alignment–an opportunity of this sort tends to make for strange bedfellows, because the politics of opposing a competitive bid would be bad for almost every official, regardless of their general ideological persuasion. And in fact there are already plans to increase bus service to ALMONO as it develops, and the airport has already been working on Seattle service, so really this would just be accelerating existing plans.
Why would the bus service at Almono be “good?”
There’s NOTHING there yet? I don’t understand articles that slam transit as if it is a rigid, forever state and that don’t add context to things.
When Amazon started in 1997, Seattle was a fairly sleepy town, too. They floated around town in various buildings until they grew large enough to require a few new buildings in South Lake Union, a warehouse district just north of downtown… hardly a greenfield site. They now occupy 33 buildings in the neighborhood, which is now all glass and steel high rises (and spheres).
Amazon has changed Seattle, a lot. Transportation is one of the aspects that has dramatically improved, partly in response to Amazon’s growth. Prices have also skyrocketed, making Seattle a more divided city. The same would happen in Pittsburgh if it were chosen.
I believe that with CMU, affordable housing and its central location on the Eastern Seaboard, Pittsburgh would be a smart choice for Amazon. But as a long-time Seattle resident moving to Pittsburgh, I kind of hope Amazon chooses someplace else.
What about century 3 mall in west mifflin? It’s near trains, a private airport, bus stops. Pretty sure it covers the space requirement.