Tuesday, December 20, 2005

Was the deal $1 million per floor?

PITTSBURGH. PNC bank announced that it would raise (um...I mean raze. Thanks for the free diting Miz Spelling.) the buildings on its lonely stretch of 5th avenue and erect a 30 story building and it has me feeling cold (an what doesn't today).

The economics of the deal do not bother me. PNC is investing $122 million of its own cash in the deal. In 2 weeks, we've seen $150 million in private investment in a two block area between this development and Jack "Trump" Piatt's purchase of the now-vacant Lazarus building. Bob O'Connor, whose ambitions to land a Crate and Barrel are slightly less ambitious than Tom Murphy's Don Quixote-ish obsession with Nordstrom (Lazarus + Lord and Taylor does not equal Nordstrom), could not ask for a better Christmas present before taking office. I can live with the contribution from the State and 10% in tax-increment-financing is less than the $25 million paid to erect the Lazarus building in the first place, which was after all just a department store.

What bothers me is this...Where the original vision of 5th and Forbes project was to create vibrant street life (whether you agreed with the mechanism or not), this seems like the brain-child of people that think making Pittsburgh look good on Monday Night Football (Look mom, no hell-fire blast furnaces) will make it healthy -- and it can't even get that right.

The drawing of the building the politicians fawned over yesterday was a boring, pedestrian, rectangle. There are 3 other skyscrapers in the immediate vicinity of where the building will be built: One and Two PNC Plaza, and One Oliver. The sum total of street life in these 3 buildings that cover the better part of a city block is a PNC Bank branch, a Starbuck's, a Quizno's and the former La Strada, Trilogy.

The anchor tenant, Reed Smith, will vacate space it already occupies downtown. The hotel seems like an end around to get the hotel that was never built as part of the convention center expansion. More importantly, we're going to be building a 30 story skyscraper at a time when the skyscraper is a dinosaur, a time when a business can be created from scratch with an idea, a computer and an internet connection (scary). The whole thing feels like part of the Allegheny Conference image campaign to make the whole world feel better about Pittsburgh.

Over at Pittsblog, Mike Madison has posted his feelings about the development. (Mike, if PNC abandons the project it will be because it gets bought.) Further down there's an interesting post that shows where small companies do business now, in homes, cafes and hotspots where entrepreneurs gather to share and create -- not mausoleums for those that litigate. These places provide comfort, flexibility, vibrancy, connectivity, creating an environment that encourages a higher number people to take the risk of entrepreneurship and innovation.

Let's leave the dinosaurs to the Carnegie and Donald Trump...but whatever, at least it's mostly the shareholder's money.

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