RIDC O'Hara confounds its critics for 50 years

Jeremy Boren
| Friday, Jan. 25, 2013, 12:01 a.m.

It's hard to imagine now, but developing a tightly controlled suburban office park to persuade technology startups and manufacturing firms not to flee Allegheny County once was an unconventional idea.

Skeptics said it couldn't sustain itself. Critics feared companies would relocate to the suburbs from the city, further draining its tax base. Supporters in the early 1960s of the nonprofit Regional Industrial Development Corp., known as RIDC, insisted it would spur job creation and boost tax revenue in Western Pennsylvania.

RIDC celebrated the 50th anniversary on Thursday of its largest and most successful venture in O'Hara — a sprawling 700-acre industrial park with office, industrial, manufacturing and warehouse space that's home to more than 130 companies.

“It was the first modern office or industrial park in the region,” said Don Smith Jr., RIDC's president. “It has been the starting place for a number of companies that have grown into considerable players here.”

Giant Eagle, Emerson Process Management, Davison Design & Development, Aerotech and Mine Safety Appliances are among the largest employers that have called RIDC O'Hara home. Once the site of the Allegheny County Workhouse and Inebriate Asylum, a jail, RIDC began developing the rural, county-owned site in 1963.

Fateful choice

Brooks Robinson Sr., 81, started at RIDC in 1963. Robinson and then-county Commissioner Tom Foerster asked officials in Blawnox at the time to adopt the industrial park by supplying it with public works and emergency services. In return, the small borough along the Allegheny River would reap added real estate taxes.

“They refused to take it on,” said Robinson, who retired as RIDC's head a decade ago. “I can't speak for them, but I imagine it was skepticism at that time as to whether that acreage could be developed.”

O'Hara officials accepted.

“It has been a bonanza for O'Hara Township,” he said.

Seven of the township's 10 largest employers are in the RIDC park, providing more than 3,370 jobs combined, according to the township's 2011 Comprehensive Annual Financial Report. O'Hara has a $2.45 million budget surplus; Blawnox has borrowed a similar amount in recent years to remodel its borough building and pay for other projects.

“(O'Hara) was so lucky,” said Tom Smith, who resigned as Blawnox mayor last month after 40 years.

RIDC has about $17 million in taxable land in O'Hara, making it the No. 2 property owner in the township. It used to have more, but RIDC has sold many of its buildings to companies with headquarters in them. The nonprofit owns 10 of the more than 80 buildings in the park.

Former Pittsburgh Mayors Tom Murphy and Dick Caliguiri criticized RIDC at various points during their political careers for trying to lure city-based companies to the suburbs, a notion the nonprofit's leaders reject. In the early 1990s, Murphy said the RIDC competed unfairly with private developers because its status as an industrial development corporation gave it exclusive access to public development project subsidies.

“They may have had a little bit of an advantage when they were developing a park, but as time wore on, that was no longer the case,” said Tom Balestrieri, president and CEO of Buncher Co., one of the region's largest private developers of industrial parks. “I don't consider them a threat. They've made a contribution to the community by what they have done, and they can point to a lot of good.”

‘An unusual nonprofit'

RIDC's largest source of revenue is rental payments — about $21 million a year, according to its 2010 tax filing. It doesn't spend public grants and loans on operating needs, only on specific economic development projects, Smith said.

Unlike many nonprofits, RIDC pays real estate taxes that amount to more than $4 million a year on properties it owns in 10 industrial and business parks in Allegheny, Butler, Lawrence and Westmoreland counties, including the one in O'Hara.

“We're an unusual nonprofit,” Smith said.

Its next major project is as part of a partnership of nonprofits known as Almono LP that wants to revitalize a vacant 178-acre site in Hazelwood on the Monongahela River where LTV Steel Co. used to be. Almono's vision is to create a nearly $1 billion mix of residential, office and flexible-use industrial development with help from an $80 million to $90 million tax-increment financing package. Almono would front the money through a self-funding plan that would rely on foundation loans, grants, loans from other sources, property sale revenues and early TIF payments to pay for roads and utilities over time.

TIFs allow a portion of the new tax revenue a development generates, 65 percent in this case, to pay back money borrowed early on to prepare blighted land for corporate and residential tenants.

Robinson said RIDC attracted private companies and public loans and grants over time by controlling the environment in its industrial parks. Restrictions, stricter than those many townships imposed, were tied to property deeds in the parks. They limited the amount of commercial trucking activity around buildings and prescribed building setbacks, loading dock placement and architectural design elements.

“The concept was really quite unique at the time,” Robinson said.

RIDC is a major reason why Aptech Computer Systems, a software company that caters to the hospitality industry, has remained in the area despite opportunities to relocate workers to California and Connecticut, said Jay Troutman, who founded the company and moved it to RIDC O'Hara in 1970. He said RIDC allowed Aptech to adjust its space needs as computers and network servers became smaller.

“We could be anywhere,” he said. “The plus in our history in the region has been RIDC, and the minus has been the air service. It's not easy to travel out of Pittsburgh any more.”

Jeremy Boren is a staff writer for Trib Total Media. He can be reached at 412-320-7935 or jboren@tribweb.com.

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