Sunday, January 22, 2017

Unabated to the mall: The Rise and Fall of the Pittsburgh Mills Mall

It turns out that one of the first posts here was about the recently opened Pittsburgh Mills Mall in Frazer Township.  At the time local biz/politics guru journalist Jon Delano had a piece on how “Pittsburgh Mills future could be in doubt.”  Last week the mall was again in the news with plenty of national coverage of the fact that much of the mall was foreclosed on and as a result was ‘sold’ for all of  $100.  All a formality of course as equity owners of the site transferred ownership to the lien holders who lent money to the project. Yes, the project is worth more than $100 most likely, but apparently less than whatever $$ is still owed on the loans. Thus the lenders submitted a de minimus bid to complete the transfer of ownership. Somebody lost a lot of money on the project to date.
But a full accounting of the project is not limited to that.  There was a lot of public money that went into facilitating the project as well. Little mentioned in much of the media coverage, but at the time it was developed, the county's $58 million dollar TIF (or Tax increment financing package) that went along with the project was the biggest TIF in Allegheny County’s history.I am pretty sure no public entity retained a stake in the project, and much of what was spent will not be coming back, but I note I know of know formal accounting quantifying that.

The national coverage of the mall's 'sale' seems to imply that the developments are the result of greater travails in the nation’s retail industry.  I wonder.  The mall is one of the newer malls across the nation having only opened in 2005.  A model of patience and tenacity if nothing else, the mall had been in planning for  more than a quarter century before finally opening. 

Local developer Damian Zamias conceived the future Pittsburgh Mills project in the late 1970s.  That’s right, the late 1970s.  By 1997, local opposition to the project, lead by retail businesses near the new project, had been ongoing for 16 years. Some called the situation a veritable 'civil war' in Frazer Township and environs.  Still the project proceeded.  In 1989, Zamias and company threatened topull back from the project if Allegheny County did not continue support for a TIF to go along with the project.  There seems to be have been no risk that would actually happen, and the prevailing wisdom was that the mall was ‘needed’ here. Zamias kept plugging away even though the drain of the project was a major reason his development company went bankrupt in 2001.  You think that might have killed the project?  Of course not.  We all know now bankruptcy is merely a tool of the big developers and the very next year (2002) he raised new capital by bringing in some new partners.

Why was the project ‘needed?’  Apparently back in the 1970s Pennsylvania, and many would say the same thing about Pittsburgh, was considered under-retailed, if you believe that. The metric seems to be based on the number of big regional malls per capita, or so I infer.  

And so, in 2005, after over a quarter century in the works, the mall finally opened to great fanfare. More than a few things had changed in the county from the time the mall was conceived and when it opened.  There was this little tempest in the steel industry that impacted local jobs. The under-retailed Allegheny County over that period saw its population decline by ~370K people, and the opening of entirely new retail developments at projects including The Waterfront, South Side Works, Robinson Town Center (1998), Galleria in Mount Lebanon, the Mall at Robinson (2001), and expansions over that period at Ross Park Mall, the Waterworks, Settlers Ridge, and I am sure many more.

As the project development continued on, more than a few other mall developments in Allegheny county failed.  In 1979 Allegheny Center Mall was… well, an actual mall, as was Parkway Center Mall (sort of a mall?), and there was the long forgotten Eastland Mall (now returned to fallow in North Versailles).  So the market was taking down the major retail developments, Pittsburgh Mills proceeded unabated. The project proceeded pretty much under its own inertia because nobody was willing to question the underlying premise that public money was needed to push Pittsburgh Mills forward.  

The mall also is very different from many of those projects completed in the region since the 1980s. This was no redevelopment of a former factory 'brownfield.'  Again, the project was planned before that was really an issue here. The project was almost entirely built on formerly pristine "greenfield" described as late as: 
Frazer is home to 1,300 people, many of them elderly. The land is rural, and the trees huddle together in bunches, like broccoli clumps.
So you can't say the project in any way is part of the post-industrial transformation that Pittsburgh is proud of.

Worth noting, the news is the mall was 'sold' to its lenders, but the mall is not closed.  Far from it in fact and is still anchored by a few big retail outlets including Macy's.  Macy's Pittsburgh Mills location does not even appear to be on the recently announced list of locations Macy's is closing.  Just a few weeks ago the Pennsylvania Liquor Control Board announced a new location to open at the mall. Whomever winds up owning and operating the site in the future, the vastly lower debt burden that will have been written off will make for a more viable business going forward. 

There is a big point here that gets to economic growth across southwestern Pennsylvania and the region's future.  Long a region suffering from the loss of manufacturing jobs, most any new development was seen as worth doing no matter.  Questioning whether any project made sense was virtually impossible, and any possible opportunity cost left unaccounted for. Was the public effort put into building the Pittsburgh Mills Mall the best use of the money, let alone the public money, and effort involved?  Was there any alternative that could have had a better chance to catalyze long term economic growth? I propose no answer to that here, but do speculate the question was never asked. The project was projected to produce over 6,100 jobs, by one public document I have seen.  I don’t know the current job count out there these days, but it’s not 6,100 permanent jobs. Even the jobs that were 'created' there have to be just retail jobs that were likely displaced from somewhere else in the region.  Retail is retail and not ever really considered value creation in the long run. 


Anonymous MH said...

I really haven't shopped in malls since moving to Pittsburgh. I used to all the time in Ohio.

Wednesday, January 25, 2017 5:08:00 PM  
Blogger Unknown said...

true religion jeans
chrome hearts outlet
jordan 4
coach outlet
ugg outlet
air max 90
tiffany jewelry
reebok trainers
coach outlet
oakley sunglasses sale

Monday, February 27, 2017 4:21:00 AM  
Blogger قمم التميز said...

شركة غسيل بيوت بالمدينة المنورة
شركة غسيل خزانات بالمدينة المنورة
شركة تنظيف كنب بالمدينة المنورة
شركة تنظيف موكيت بالمدينة المنورة
شركة تنظيف سجاد بالمدينة المنورة
شركة تنظيف واجهات زجاج بالمدينة المنورة

Wednesday, May 24, 2017 9:41:00 AM  
Blogger قمة الدقة said...

قمة الدقة
شركة نقل اثاث بالرياض
شركة نقل عفش بالرياض
شركة تنظيف خزانات بالدمام
شركة تنظيف خزانات بالخبر
شركة عزل اسطح بالدمام
شركة عزل اسطح بالخبر

Tuesday, August 01, 2017 4:50:00 PM  
Blogger عبدالله السيد said...

شركة تنظيف منازل بالاحساء
شركة تنظيف فلل بالاحساء-شركة تنظيف مجالس بالاحساء
شركة تنظيف خزانات بالاحساء- شركة تنظيف مساجد بالاحساء
شركة تسليك مجارى بالاحساء
شركة رش مبيدات بالاحساء
شركة مكافحة حشرات بالاحساء-شركة مكافحة النمل الابيض بالاحساء

Wednesday, February 21, 2018 10:37:00 AM  
Blogger عبدالله السيد said...

ارخص شركة تنظيف منازل بالدمام
تقدمها شركة ركن كلين بالنسبة لتنظيف المجالس بالدمام لايمكن مقارنتها باى حال من الاحوال مع باقى الشركات التى تقوم بتنظيف الكنب والستائر والمجالس بالدمام.
افضل شركة تسليك مجارى بالدمام وليس فقط الارخص فى بل فى جميع اانحاء المناطق حتى فى منطقة الدمام
شركة رش مبيدات بالدمام-شركة مكافحة الحشرات بالدمام
شركة عزل خزانات -بالدمام-شركة تنظيف خزانات بالدمام
شركة تنظيف مساجد بالدمام
شركة تنظيف مسابح بالدمام
شركة تنظيف واجهات حجر بالدمام

Wednesday, February 21, 2018 10:38:00 AM  
Blogger pheobe22 said...

Enormous blog you individuals have made there, I entirely appreciate the work. hero towers

Thursday, February 22, 2018 12:23:00 AM  
Blogger rebecca williams said...



We offer loan from a minimum amount of 50,000.00 to 20 million Euros,Dollars & Pound-sterling at REBECCA WILLIAMS LOAN FIRM. Are you looking for loans for all kind of purpose,a Business Loan, Personal Loans, Mortgages, Car Loans, Debt Consolidation Loans, Unsecured Loans, Risk capital, etc. ..

You are well-come in the right place Your loan solutions! I am a private lender who lends Individuals and Businesses at a low interest rate and affordable Interest rate of 2%.

*If you are very serious as I am,we will have this transaction concluded with 7 Banking Working days from the date of start. We have Branches and Clearing Houses in some countries like:Turkey Branch,United Kingdom Branch,United States Branch,Japan Branch, Indonesia Branch and South Africa and others,

NOTE: 1 year minimum and 20 years maximum depending on the loan amount you need. Customers should be above the age of 35 This loan transaction is
100% guarantee for serious customers.

Contact Email:

Thank you.

Friday, May 18, 2018 8:15:00 PM  

Post a Comment

Links to this post:

Create a Link

<< Home