COVER STORY, SEPTEMBER 2009

GOING TO THE SOURCE
Pittsburgh’s natural resources boost economy.
By Stephanie Mayhew Specht

The city of Pittsburgh is defying many economic woes by digging deep, literally. The Pittsburgh region is looking to its natural resources to drive business and shape the economy for the future. Northeast Real Estate Business sat down with Dewitt Peart, the executive vice president of economic development for the Allegheny Conference on Community Development and the president of the Pittsburgh Regional Alliance, an affiliate of the Allegheny Conference, to talk about the current activity in the city.

“Our project pipeline has stayed fairly consistent within the  last year. We run at any given time about 100 projects that are active in our pipeline,” notes Peart. “That was what we experienced last year and we are running just a little bit ahead of that this year.”

According to Peart, a fair amount of the recent activity has been within the energy sector, particularly natural gas exploration. The recent discovery of a new layer of natural gas deposits deep within the ground in the Southwestern Pennsylvania region has brought an increased focus on utilizing this natural resource.  Furthermore, a particularly strong deposit of natural gas right within the Pittsburgh region has made it an ideal place for companies to set up their businesses. 

“Last year we had 11 project wins from natural gas companies that moved to operate in the Pittsburgh region,” says Peart. “We are also seeing growth in the supply chain around that industry. The whole energy sector in Pittsburgh is growing for us.”

Companies such as Chesapeake Energy, Range Resources, Atlas Energy Resources and Equitable Gas are all expanding locally in response to the growth of natural gas exploration. Peart notes that although extracting this natural resource is still in the early phases, the companies that will ultimately supply that industry are already growing.

Another natural resource resulting in quite a bit of commercial real estate activity in Pittsburgh is the work being devoted to finding clean coal technologies. According to Peart, between government R&D and private sector R&D, approximately $1 billion per year in R&D energy research is happening in Pittsburgh.

“In Pittsburgh we have natural gas deposits and significant coal deposits, so from a natural resource perspective the increased interest in new energy supplies have created unique opportunities for us in today’s market,” says Peart. “Along with more activity from the research and development that goes along with those industries.”

“As more and more of this technology comes online it is going to create opportunity for new investment and new jobs in the region,”  Peart adds.

The Westinghouse Electric Company is nearing completion on a new campus development in the Pittsburgh Airport Corridor.

One such company expanding in the area is Westinghouse Electric Company, which designs, builds and maintains nuclear power plants. Westinghouse recently completed a new sprawling campus just outside Pittsburgh in Cranberry, Pennsylvania. Peart notes that in 2008, the company signed four new contracts to develop nuclear plants in China and more development is expected around the world as the company markets a new model of nuclear plants that they recently created. In addition to the growth of Westinghouse, the supply chain that supports the company is growing in the area as well.

“Over the next 5 years we are expecting 1,000 jobs per year being hired just by Westinghouse,” explains Peart. “These are nuclear engineers, mechanical engineers — high paying jobs.”

Pittsburgh’s airport corridor has also become a coveted site for more development. Dick’s Sporting Goods is developing a new corporate headquarters at the Pittsburgh International Airport. Currently under construction, the new facility will feature an 800,000-square-foot campus with amenities such as its own private airplane hangar with access directly to the runway.

Flabeg Corporation is currently constructing a roughly 100,000-square-foot manufacturing plant where it will produce solar panels in the popular Pittsburgh Airport Corridor.

Also in the airport corridor, Flabeg Corporation, a German company that custom designs and engineers high-tech optical thin films, specialty mirrors and optical components, is currently building a roughly 100,000-square-foot manufacturing plant where it will produce solar panels.

Appliance Dealers Cooperative also recently broke ground on a new operations and distribution facility near the Pittsburgh International Airport. The 155,000-square-foot building is located in Findlay Industrial Park.

Aside from the area’s abundant natural resources and obvious logistical pluses, the city is set to host the next G-20 Summit in September.  

“We will have visitors from around the world come and look at why we have been successful in the downturn,” says Peart.

Peart notes that the city’s stability and success is two fold. One reason is the diversity of Pittsburgh’s economy.

“When you look at our economy, it is very diversified and strong in sectors that operate well in a global economy,” he explains.

The second reason is because of the area’s natural resources. This includes increasing work in the energy sector, the growth of the supply chain that supports the energy industry, as well as the innovation that results from this type of work.

“Companies and other countries are very interested in Pittsburgh’s capacity to keep innovating and reinventing itself,” says Peart.

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