Opportunity Knocks

In Pittsburgh’s industrial heyday, the region dove into recession as the mighty engines of manufacturing throttled way back. And when a recession ended, Pittsburgh roared back, as rising demand jump-started factories.

In the past 20 years though, the region has followed a different pattern. Without as much manufacturing and with more healthcare and education jobs, the curve has been smoother. Pittsburgh has lagged behind other regions in going into recession; often our only encouraging job growth numbers have been during the early stages of recession, when other regional economies tanked. But as other economies jumped back to life coming out of recession, Pittsburgh remained in the doldrums, emerging with tepid job growth, again falling behind other regions.

In this recession, we appear to be seeing something different. So far, at least, Pittsburgh is experiencing the best of both worlds. First, we were slow to enter the recession. Second, we didn’t sink as deep as other regions. Finally and uncharacteristically, Pittsburgh is leading other regions in job growth coming out of recession. (See figure 1.)

The situation could be the result of either of two situations—or both. First, we may be leading because we weren’t stunned as badly from the recession and, as the recovery continues, we may ultimately lag behind other regions again. Second, and probably more likely, the region is rebounding more quickly than other regions because of comparative strength in finance, “eds and meds,” and energy. Financial institutions, led by PNC, are healthier in Pittsburgh; our universities have flourished—at least before the institution of Harrisburg’s massive education budget cuts; and finally comes the Marcellus Shale, an industry whose economic potential still is not widely perceived, as attention is paid, understandably, to environmental issues. But if you visit a Marcellus Shale “frac” site, you will get an almost instant grasp of the burgeoning natural gas industry and what lies ahead economically for the Pittsburgh region. From the local car parkers and caterers, to the roughnecks, to the technical experts watching computer screens in mobile-home headquarters, a frac site filled with trucks, men and activity bespeaks nothing as much as economic boom.

You can see its effects in another indicator, hotel occupancy rates. (See figure 2.) Pittsburgh leads all benchmark regions in this measure, and much of it is the result of shale-related companies renting rooms or, in some cases, buying hotels outright to house their workers.

If you can bear just a little more of this onslaught of statistics, there are two more comparisons that put into perspective the economic advantages Pittsburgh enjoys.

The first is foreclosures as a percent of all housing. The data from the first quarter of 2011 show Pittsburgh as having the second lowest percentage and well below the benchmark average. (See figure 3.) Regarding their homes—for most people their most valuable financial asset—Pittsburgh residents are simply not under the kind of duress as their counterparts in other regions.

Finally, consider cost of living. Pittsburgh has the second lowest of the benchmark regions and is far below the benchmark average. (See figure 4.)

If you add all of these factors and include the region’s relatively low unemployment rate, what emerges is a portrait of opportunity that has not been evident in Pittsburgh for decades.

It is in this time and in this context that several key local organizations are enmeshed in long-term planning activities.

The Power of 32 is completing its regional visioning process that has sought input from thousands of citizens of 32 regional counties. It is convening committees to distill the information and come up with regional goals to accomplish by 2025. The City of Pittsburgh is inking its first-ever comprehensive plan. The Allegheny Conference on Community Development is developing its triennial plan. And the Southwestern Pennsylvania Commission (SPC) is updating its own plan.

So planning is alive and well. But one question is, will these groups work together to develop something approaching consensus and a common battle plan? We don’t need uniformity, but the possibilities are too great to squander to leadership “turf.”

What will we do with these plans? Will the region face and solve its transit, infrastructure and municipal finance problems? (Power of 32 and the Conference have worked together since Power of 32 began.) And finally, will these planning efforts achieve a level of ambition commensurate with the opportunities that the region could grasp if we elevate our thinking and commit to progress together?

Unfortunately in that regard, the two groups that likely have the most potential impact—the conference and the SPC—are essentially not on speaking terms. The fracas arose when the conference decided to move out of the Regional Enterprise Tower, the former Alcoa headquarters donated by former CEO Paul O’Neill to be a home to regional nonprofits. The aluminum tower is owned and operated by SPC. The conference was not the first major tenant to leave, but shortly after its departure, the building and SPC collapsed into bankruptcy, and a significant rift exists between the two groups.

You may never have heard of SPC. Even though it’s arguably the region’s most important government body, most residents don’t know it exists.

The SPC comprises regional county and city leaders and political appointees, and it is designated by the federal government as the region’s metropolitan planning organization. As such, it’s responsible for planning and prioritizing all state and federal transportation funds allocated to the region. As the only public body with the City of Pittsburgh and the 10-county region under its purview, it is also, as its Web site says, “the region’s forum for collaboration, planning and public decision-making.”

For being such a distinctly public body, SPC typically flies under the radar; it has attracted more attention recently because of the bankruptcy of its Downtown building. It is probably safe to say two things here. First, now is the perfect time for SPC to exercise its leading role in collaborating with the other groups currently involved in planning regional strategy. And second, the region can ill afford to have SPC and the Allegheny Conference at odds. Whatever the reason, there is simply too much at stake right now for the future of this region and its residents.

At ground level, exciting things are happening all over the region, often led by young people with ambitions for the region’s future. It is time for the groups in a position to wield the kind of power that gets things done on a large scale to come together with their planning efforts, instill those plans with appropriate ambition, and figure out how we as a region will monitor our progress toward those goals.