Iron City Finding
New Economy Strength

Pittsburgh has always been defined by steel, an industry that saw a downsizing of some 150,000 jobs during the 1970s and '80s. But as steelworker's son and Mayor Tom Murphy tells it, that piece of Pittsburgh's heart is being healed bit by bit.
        "We as a community went through very difficult times," he explains. "There were big fights about whether we ought to try to start up these mills again, which the unions were pushing for. Technology at the time was seen as a bad word. It was not the kind of business that people who made steel worked in. So not only did we face changing underlying economics physically, with literally hundreds of acres of old industrial property, but we also had to think about how we change the culture of the region, to move from a city that was relying on big corporations to one that embraced entrepreneurship again."
        Around eight years ago, the city acquired more than 1,000 acres (405 hectares). Today, what used to be a 238-acre (96-ha.), 25-story slag dump is being transformed into a 700-unit housing development; the former home of LTV Steel now plays host to a host of technology companies representing hundreds of millions of dollars in investment; and Alcoa which has located headquarters there, is now building a new operations center. Overall, around $4 billion has been invested over the past 4-5 years. In fact, the expertise that Pennsylvania and Pittsburgh have developed in brownfield rebirth inspired an invitation to a conference on the subject hosted by Great Britain's Prince Charles.
        Mayor Murphy says that environmentally degraded property in downtown Pittsburgh has been transformed to such an extent that there is a community of bass fishermen once again plying the waters of the Three Rivers -- and a community of beavers wreaking havoc on downtown trees. Most appealing to downtown locators, he says, is more than 1,000 acres of riverfront park. That appeals to Murphy, as well as the 200,000 who come downtown to work every day. With a background in urban planning, Murphy is keen on what he calls a very European feel -- "a walking city" he calls it.
        Longtime municipal benefactor Heinz Corp. saw fit to bring its Ore Ida and StarKist divisions to Pittsburgh and to spend millions on a manufacturing expansion. Alcoa located its new world headquarters in the North Shore riverfront area downtown. In the financial arena, the city has not only seen recent expansions by Mellon Bank and PNC (adding 6,000 to their payrolls), but it also has fostered the growth of about 20 venture capital firms. And while site selection professionals often half-joke about the decision coming down to where the CEO wants to live, that process was mirrored recently by the desires of a crucial research scientist: in part because of his adamant refusal to leave the town he loves, CJ Technology decided to put its $40-million building in Pittsburgh.
        The biggest deal to come the city's way in the past year was Siemens' decision to put its $122-million fuel cell center on the grounds of the former US Steel Homestead Works in Munhall, a 200,000-sq.-ft. (18,580-sq.-m.) project that will employ up to 500 skilled workers within four years. To those still operating on outmoded perceptions of Pittsburgh, it came as a surprise that the city beat out Orlando and Fort Worth for the project. Another fuel cell project, fueled by the leadership of people formerly with Westinghouse, is coming online soon.
        Other new projects include a 154,000-sq.-ft. (14,307-sq.-m.) expansion by MedRad, a division of Schering AG, whose leaders said the decision was based in large measure on the presence of the US Airways hub at the city's newly renovated international airport. Meanwhile, Lake Region Medical, buoyed by $353,000 in state incentives and $256,000 in local incentives, picked the city over sites in Minnesota, Iowa and Texas for its medical device guide wire manufacturing facility.
        Those projects are part of a larger wave of life sciences enterprises hitting Pittsburgh, some of which will be part of its Life Sciences Greenhouse, one of three statewide, which will utilize $600 million in funds over the next 10 years. The statewide project, strongly pushed by former governor Tom Ridge, was based on a Digital Greenhouse model that saw success in Pittsburgh in 2000.
        The Pittsburgh branch of the project will receive $33.3 million of the $100 million initially available statewide. The region must match that with its own fundraising of $40 million, supplemented by an additional $238 million in public and private support over the next 10 years. In April, the Pittsburgh Greenhouse welcomed its first tenant, Renal Solutions Inc., which is relocating its headquarters from Indiana and will employ 150.
        "I'm excited to be relocating Renal Solutions to Pittsburgh, and on a personal note, to be returning home," said Peter DeComo, company president and CEO of Renal Solutions. "The Pittsburgh Life Sciences Greenhouse may be a new initiative, but the region's underlying research, development and business infrastructure that life-sciences companies need to be successful is established and thriving."
        The University of Pittsburgh and Carnegie Mellon University each year attract more than $400 million in research grants. The intellectual infrastructure they provide was one of the attractions for RAND, the worldwide policy think tank, which recently located its fourth office in the city. Such substantial intellectual capital was one reason why Intel Corp., the world's largest computer chip maker, announced last fall its intention to locate its Pittsburgh Research Laboratory in a new research building on the campus of CMU. In addition to the area's 1,100 annual graduates in computer and electrical engineering, a full 40 percent of Penn State University students come from Pittsburgh. Now the key is to get them to stay or return, and recent trends in the city's development ought to turn some of those heads.
        Pittsburgh Regional Authority President and COO Ronnie Bryant, most recently affiliated with successful regional development efforts in St. Louis, says the area is losing 90 percent of its technical graduates, but it is slowly wooing them back. His agency is appointing a director of talent attraction and is even using the natural network of Pittsburgh Steeler fan clubs across the country (165 at last count) to function as the catalyst for events held in those cities designed to remind those lost sons and daughters what they're missing.
        The city itself has only around 350,000 residents, but the greater metro area has grown to 2.6 million (ranking it 21st in MSA population), served by a completely spoked transportation system. While Allegheny County's population of 1.28 million dropped by 4.1 percent between 1990 and 2000, the periphery has been quietly filling, at the same time that it has seen a jump in customer contact centers and corporate headquarters locations. Even those further out think of themselves as Pittsburghers.
        Bryant says new ground has also been broken in the area of truly regional collaboration, as different jurisdictions fight through the challenges inherent in their underlying tax structures. One example is the waterfront area itself, where four municipalities have devised a tax base sharing system. But he is most impressed by the level of collaboration with the state.
        "This is the third state I've worked in," says the development veteran, "and the support from state government has been overwhelming."
        It all fits into Murphy's simple master plan.
        "For the first decade of this new century, there is one overarching goal we must set for ourselves and for our city," he said in his most recent inaugural address. "Our goal must be to make this decade the first decade in more than fifty years in which Pittsburgh gains population."

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