Pittsburgh basks in refurbished image as must-see destination

| Saturday, May 3, 2014, 9:00 p.m.

James Craft, a professor at the University of Pittsburgh's Katz Graduate School of Business, moved to Pittsburgh in 1972. His 17th-floor office in the Cathedral of Learning looked down on the urban campus and Fifth Avenue.

“But I had to close that window every afternoon,” Craft recalled. “The old J&L Steel plant was pumping out smoke” from its mill along the Monongahela River. The air reeked of burning coal.

By 1984, the steel industry that clouded Craft's view and dominated the city's economy was gone. Six years earlier, it employed more than 90,000 people in Western Pennsylvania. Then, as hundreds of thousands of people moved away, the city's unemployment rate soared to 17 percent.

Thirty years later, much has changed economically and cosmetically.

Soot no longer mars the Cathedral of Learning's limestone. Pitt and neighboring Carnegie Mellon University dominate Oakland, drawing researchers, tech startups and young people. UPMC is the state's largest private employer with a workforce of about 62,000.

The city — its economy diversified in technology, energy, health care, education and finance — has an unemployment rate of 5.8 percent, well below the national average. Hiking and biking trails line its riverbanks. Landmark neighborhoods such as the gritty, unique Strip District or the busy Cultural District anchor its Downtown.

Along the way, the city built sports stadiums, skyscrapers and a “green” convention center, and renovated Point State Park — decisions that were not always popular with taxpayers.

Yet with recent rankings such as “A Top 10 City for Achieving the American Dream” and “No. 1 Best City to Relocate to in the U.S.,” Pittsburgh basks in a refurbished image as a must-see destination. People come for vacations, education, careers, to raise families.

No one had a defined strategy to bring us to this point, according to Jim Rohr, former executive chairman and CEO of PNC Financial Services Group Inc. Rohr was among those who helped to transform the city, as his leadership took PNC from a regional bank to one with about 2,700 branches in 19 states and the District of Columbia.

“There was no plan, and there certainly was no messiah,” Rohr told the Tribune-Review. “What we did have were people who worked together in a way that has really been quite remarkable, but not one of them took us from where we were in 1984 to where we are today.

“It was a patchwork of events that came together.”

“We are the ‘overnight sensation' that was 30 years in the making,” said Bill Flanagan, executive vice president of the Allegheny Conference on Community Development.

Not ‘like Detroit'

In 1970, 15 Fortune 500 companies had headquarters in Pittsburgh — more than any city except Chicago and New York, according to a 2012 Harvard Business School study on Pittsburgh. Many of those corporations moved elsewhere, though PNC, H.J. Heinz Co., PPG Industries, U.S. Steel Corp. and others remain.

Several “emergent economies” took steel's place in Pittsburgh, Pitt's Craft said, and other companies have headquarters in the region: Allegheny Technologies, Mylan, Wesco International, Dick's Sporting Goods, Consol Energy, EQT Corp., American Eagle Outfitters and Kennametal.

“It wasn't like Detroit, where everyone walked out at once and left the city bankrupt,” he said. “The economy shifted, but we made a very interesting transformation.”

Civic leaders — not just in government but in corporate boardrooms, foundations, universities, labor unions — worked on the transformation.

“We had mayors and politicians who were interested in our image and living conditions,” Craft said. “They changed the structure of Downtown; they focused on The Point. They made the city more attractive. ... We started moving in another direction, and now it's growing again.”

Former Allegheny County Executive Dan Onorato said people in other cities sometimes call Pittsburgh leaders wanting “the recipe for the secret sauce.”

“There was no recipe,” he said, just “a collaborative effort.”

Culture as a catalyst

Some analysts say it took hold with the Cultural District.

David Caliguiri was just a kid when his dad was Pittsburgh's mayor, but he remembers his father's challenge to transform the city in the 1980s.

“It wasn't just an economic transformation — the physical transformation was equally important,” said Caliguiri, 41, a public affairs consultant. Mayor Richard Caliguiri, who died in 1988, and others wanted to utilize the city's natural assets, his son said.

Heinz CEO John Heinz II believed a “cultural district” would be the catalyst to drive development and attract people. In 1971, largely because of him and the Pittsburgh Symphony Orchestra, Heinz Hall for the Performing Arts opened in the old Loew's Penn Theater on Penn Avenue in a $10 million renovation.

Heinz next wanted to close the vice-ridden bars around it.

“There was no cultural district, only Heinz Hall and the old convention center, and a red-light district that stretched the 14 blocks in between,” Rohr said.

Many Pittsburghers wondered: How could the arts alone bring people into the city, when the trend was to escape to suburbs?

But Heinz exerted pressure until foundations, business executives and government officials agreed to form and fund The Cultural Trust, a nonprofit organization tasked with improving those Downtown blocks.

“I would argue that, if we had not redone the Cultural District, then Alcoa would have never moved its headquarters across the river to the North Side, the new housing attached to that would not be there, the new ‘green' convention center would have never been built, or the stadiums,” Rohr said.

Successes, failures

Some decisions — notably the bundling of tax dollars for the David L. Lawrence Convention Center, PNC Park and Heinz Field — became so divisive that public scrutiny led to public fights. Through hotel and sales tax, ticket surcharges, parking revenue and other money, the city-county Sports & Exhibition Authority in 1998 developed the “destination financing plan” to raise $1 billion for those projects.

“It was all based on trust,” said Jack Shea, president of Allegheny County Labor Council. “None of this would have happened had there not been that notion that we were all in it together, we all had to make sacrifices, and we all had to take some heat from the organizations we represented.”

The Cultural District's theaters, restaurants, shops, parks and art galleries draw an estimated 2 million people a year, according to the Trust's website.

“I always found it fascinating that at the city's darkest hours, the city leaders said, ‘We are not down for the count,' ” said Kevin McMahon, who became the Trust's second director 12 years ago.

The first attempt to expand the convention center and replace Three Rivers Stadium with a ballpark and a football stadium failed when voters rejected, 2-to-1, a proposed sales tax referendum.

Then-Mayor Tom Murphy and former County Commissioners Bob Cranmer and Mike Dawida devised a “Plan B,” to use money from the hotel tax, ticket surcharges and Regional Asset District. RAD supports “assets” with half the proceeds of an additional 1 percent sales tax in the county.

“We took a lot of heat for it,” said Murphy, who tells people now: “The key is we took risks.”

Not all of the grand plans worked out.

A Murphy-backed plan — to transform Fifth and Forbes avenues Downtown, starting with the taxpayer-subsidized Lazarus and Lord & Taylor department stores — failed or never materialized.

And Pittsburgh International Airport, considered a top hub when built 20 years ago, languishes with post-9/11 underutilization. Its US Airways hub is gone.

Endless possibilities

In February 2013, officials closed a deal worth potentially $500 million with Cecil-based Consol Energy for natural gas drilling on airport property.

Energy has gained a foothold as a leading industry in Western Pennsylvania through gas drilling in the Marcellus shale. But financial services, advanced manufacturing, technology, life sciences and health care remain important aspects of Pittsburgh's economy, analysts say.

Though Murphy's plan to change the makeup of businesses along Fifth, Forbes and Wood streets failed, Caliguiri believes Downtown remains healthy, “thanks in large part to PNC's decision to not only keep its headquarters in the city but to build new skyscrapers.”

Rohr, who spent 40 years with PNC, believes “the possibilities are endless” for Pittsburgh.

“We haven't even addressed how important the shale industry is going to be for generations to come,” he said.

If a main industry, such as steel or energy, collapses, it's only natural for residents to seek a savior, said Grant Oliphant, president and CEO of The Pittsburgh Foundation, who will return to The Heinz Endowments as its head in June.

When that happened in Pittsburgh, however, residents stopped waiting and started doing, Oliphant said.

“We are not a city that waits for a leader. We have become a city where people take charge of the things they want to make happen,” he said.

“I don't know of anything on this scale, in any other American city, where we've gone from parking lots and forgotten roadways to beautiful riverfronts and significant stadiums, significant new buildings, and a significant, world-class riverfront. ... It's an example of the community coalescing around a vision.”

Salena Zito and Chris Togneri are Trib Total Media staff writers. Reach Zito at szito@tribweb.com and Togneri at ctogneri@tribweb.com.

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