Tuesday, March 22, 2005

A Few Things No One Talks About

This post is slated to be exceptionally boring, but I just wanted to raise a few issues that have caused some real headaches for mes amies in the Pittsburgh Economic Development arena. These aren't the sensationalized stories about "how much property the City owns" or "how the City is stymying development downtown". These are much more technical concerns about the health of the City and its ability to grow.

(1) Tax Delinquency. Tax a good look at a map of the tax delinquency around the city of Pittsburgh. Certain neighborhoods are approaching 50% property tax delinquency, which is damn scary. Once you hit 50%, the neighborhood is on a near irreversible slide toward decline. If the City cannot collect on the revenues, the City doesn't have the money it needs to operate.

(2) Water & Sewer. This going to be a bigger problem soon. Western PA will have to dump close to $3 BILLION in order to comply with an EPA decree to separate water & sewer lines. PWSA has begun to mandate some of this separation, but at about $10,000/unit, the costs are difficult to subsume in a project budgets. Consequently, a lot of the affordable housing that could get built, doesn't.

(3) Construction Cost vs. Market Prices. Pittsburgh is an inexpensive City to live in, but not to construct in. Prevailing wages, unfortunately bumped up in the short run by the construction of two stadiums, push construction costs up significantly higher than the overall sales prices. The result is that more and more community groups and developers go hat-in-hand looking for development grants in order to get their construction projects done. Unfortunately, City resources are stretches so thin than development grants are few and far between.

(4) Federal Reduction of CDBG Allocations. Big time problem for the City who is scheduled to receive only about $19M in CDBG funds, down from around $20M in 2004 and 2003. To give you perspective, before the fiscal meltdown, URA only received $7.96M of those CDBG dollars. Following the fiscal crisis (or rather, currently), the City has reallocated that money to pay for non-ED uses. The Bush administration will only cut the CDBG allocation further. Less gap financing to the City means fewer projects can get pushed through to development.

(5) High Parking Tax. While this was a hot-button issue awhile back, it has since faded into the background. Still, it remains one of the major deterrents to downtown development.

(6) Asbestos. It is incredibly costly to do an environmentally sound demolition of a building containing asbestos. It's not pretty. We're not even talking about remediation of a building for future occupants; we're talking about actual demolition. While this is a necessary process, there is little if any additional money out there to alleviate those costs
So those are some issues that a few people are talking about; they aren't big, but they are a nuisance.

I'm open to additional insights.


Anonymous said...

Tactical nuclear weapons and bank robberies should solve most of the problems that you mentioned... the rest can be taken care of by subsuming the street gangs and deputizing them as revenue enhancement agents.

O said...

Tactical nuclear weapons have shown to be extremely inefficient against the Pittsburgh Water & Sewer Authority.

Anonymous said...

BTW, in item #2, I think you mean separating storm drains and wastewater lines.

King County Metro (Seattle) was all atwitter about separating the two for a while, until they discovered the storm runoff was just as nasty as the sewer water and it all had to be treated. This meant they needed more sewage treatment capacity, and a new plant for same, which is unpopular with its neighbors.

Among the new focuses are cisterns to reduce peak flows and a pilot program for testing was to repair cracked underground pipes. Early results show 75% of rainy season flow rates are from groundwater leaking into the old pipes.