RIDC
2015 Year in Review
Celebrating 60 Years Regional Industrial Development Corporation
Strengthening Pittsburgh, Building Excellence
Table of
Contents Mission 60 Years of RIDC Letters from the President and Board Chair Board Members and Financials By the Numbers and Our Impact Our Parks and Leasing & Land Sales Past Projects & Economic Activity RIDC Properties Project Spotlight Financing Assistance Land Development & Almono
1 2-3 4-5 6-7 8-9 10-11 12-13 14-15 16-17 18-19 20-21
Our
Mission Regional Industrial Development Corporation of Southwestern Pennsylvania catalyzes and supports economic growth through high quality job creation, real estate development and the financing of projects that advance the public interest. Through public, private and institutional partnerships, RIDC develops real estate to ensure the region can capture emerging and existing growth opportunities across diverse industry sectors.
2015 Year in Review 1
RIDC Celebrates 60 Years of Work in the Region
RIDC Industrial Park-O’Hara - 1967
RIDC Park West - 1979
City Center of Duquesne - 1980s
RIDC Keystone Commons - 1990s
Collaborative Innovation Center - 2000s
Carnegie Robotics - Today
2 RIDC Strengthening Pittsburgh, Building Excellence
While Looking Forward to the Next 60 Years Over the past 60 years, RIDC has used real estate
As RIDC looks ahead to the next 60 years,
development as a catalyst to regional growth in employment and the tax base that would not otherwise occur – or occur as rapidly or in particular areas – without RIDC participation.
Pittsburgh features a stronger economy than it has seen in recent decades, but an economy that has not reached the kind of growth and equity befitting a great region. RIDC looks forward to supporting the industries that will grow jobs in the region-by creating places that attract companies and a globally-competitive workforce as well as by working across a host of policy issues impacting development including transportation and stormwater.
RIDC's activities have centered on the overlap between regional need and economic opportunity.
1950s, 60s, and 70s create then-scarce
light industrial space in professional business parks as a complement to the region's heavy industry focus.
1980s replace economic drivers and find
adaptive reuse for the sites left vacant by the decline of steel and associated industries.
RIDC will continue redeveloping former heavy manufacturing sites and is poised for the next 60 years of Pittsburgh growth.
The RIDC logo has gone through some changes over the years too!
Original logo in the 1950s -early 1980’s
Redesigned logo used from 1982-2009
1990s and 2000s leverage the growth
in the medical and education communities to create new homes for rapidly growing information technology and health care companies. RIDC’s ability to take risks, coalesce public and private funding, and be patient in awaiting investment returns were central to the success of the strategy.
The brand took on a new look in 2009 and is the current logo of RIDC
2015 Year in Review 3
Letter from the
President
Corporate Officers Donald F. Smith, Jr., PhD, President Timothy White, Senior Vice President, Development Mark Wessel, Senior Vice President, Operational Strategy Ronald Coombs, Chief Financial Officer William Kirk, Jr., Vice President, Real Estate Operations Colleen Poremski, Corporate Secretary
Throughout RIDC’s 60 year history, the organization has been an important instrument for driving catalytic
developments that impact the regional economy. RIDC has the ability to take on large, challenging projects that require patient capital and expertise that help stimulate significant job creation. RIDC has developed over 2,000 acres within our suburban industrial park projects where thousands of people now work. The organization acquired a 4 million square feet Westinghouse plant and renovated it into a facility that now holds the operations of over 35 companies ranging from engineering firms and cookie manufacturers to nuclear industry suppliers. In 2010, RIDC was ready to execute on a plan to convert the 2.8 million square feet former Sony plant in Westmoreland from a nearly vacant building to a location for new and growing companies. As we close out 2015, that project is well on its way to becoming a booming center of advanced technology with over 720 quality jobs located in the facility. RIDC’s 60th year was an exciting and busy one. RIDC is in a strong financial position that allows the organization to respond in flexible ways as regional needs and opportunities arise. RIDC facilitated a large project to build out a state-of-the-art manufacturing and R&D campus for growing regional company TAKTL at our Keystone Commons facility. The company develops and manufactures an Ultra High Performance Concrete that has been used in architectural façade panels in high-profile projects across the country including the new Smithsonian museum in Washington, D.C. Other 2015 undertakings included significant construction at Almono, support of the growing robotics industry, continued redevelopment at the massive Keystone Commons and RIDC Westmoreland complex, and modernizing our properties. As RIDC starts on the next 60 years, and as RIDC’s original industrial parks are now nearly 100% developed, the organization looks to play a key role in forging and executing on strategies and projects to grow the regional economy.
4 RIDC Strengthening Pittsburgh, Building Excellence
Donald F. Smith, Jr., PhD President
Letter from the
Board Chair This year we reflect on and celebrate the critical role that RIDC has played in the Pittsburgh region for the
past 60 years. However, in doing so, we are staying focused on the future. RIDC’s primary role has always been to serve as a catalyst for real estate development to help advance regional growth in employment and tax base that would not otherwise occur – or occur as rapidly – without RIDC participation. RIDC has continually focused on and executed regional strategies and economic needs. In the 1950’s and 60’s those efforts were directed at creating then scarce light industrial space as a complement to the region’s heavy industry focus. In the 1970’s and 80’s the primary challenge shifted to the need to replace the heavy industry economic drivers and find adaptive reuse for the sites left vacant by the decline of steel and associated industries. In the 1990’s and 2000’s the objective was to leverage the growth in the medical and education communities by creating new sites and facilities to rapidly growing information technology and health care companies. The region continues to expect RIDC to tackle challenging projects. Pittsburgh’s economy has rebounded, but growth is not yet pervasive. More efforts are needed to promote expanding industries, to increase the regional population, and to ensure that those areas that have been hardest hit also experience the economic benefits of a growing economy. RIDC is helping to bring underutilized sites back to economic activity – through our work and investments at places like ALMONO (the former LTV site in Hazelwood), Lawrenceville, and the Mon Valley – and supporting the region’s growing and diverse industries such as robotics and advanced technology-based manufacturing. RIDC continues these investments and has also positioned itself to be ready to take on new projects that advance the regional mission. As RIDC celebrates the past 60 years and looks ahead to the future, the organization is still undertaking the important projects where the public benefit exceeds the private benefit. With the commitment and service of a dedicated Board of Directors, and the skills and professional experience of our outstanding staff, I am fully confident that our success will continue for years to come.
G. Reynolds Clark Board Chair
2015 Year in Review 5
RIDC
Board of Directors Mark Aloe, Managing Member, Aloe Brothers, LLC Coleman J. Benedict, Executive Vice President, WCB Properties, Inc. Charles T. Blocksidge, PhD, Executive Director, Local, County & State Government Relations & Special Projects, Community College of Allegheny County Sara Davis Buss, Esquire, Campbell & Levine, LLC
Louis V. Oliva, CCIM, SIOR, Executive Managing Director, Newmark Grubb Knight Frank Robert B. Pease, National Development Corporation The Honorable William Peduto, Mayor, City of Pittsburgh J. William Richardson, Retired, Chief Financial Officer
Eric Cartwright, Vice President, UPMC Corporate Construction and Real Estate
The Honorable Rodney D. Ruddock, Chairman, Board of Commissioners, Indiana County
G. Reynolds Clark, Vice Chancellor, Community Initiatives, Chief of Staff, University of Pittsburgh
Audrey Russo, President and Chief Executive Officer, Pittsburgh Technology Council
The Honorable Rich Fitzgerald, County Chief Executive, County of Allegheny
Darrell E. Smalley, Principal, State and Local Tax, Ernst & Young, LLP
Steven J. Guy, President and Chief Executive Officer, Oxford Development Company
Don Smith Jr, PhD, President, RIDC
Michael J. Hannon, Executive Vice President/Chief Credit Officer, PNC Bank Scott D. Izzo, Director, Richard King Mellon Foundation Dennis M. Joyce, Managing Director, The Bank of New York Mellon Corporation
Samuel J Stephenson, CPA, Retired Partner, ParenteBeard, LLC The Honorable Daniel J. Vogler, Chairman, Lawrence County Board of Commissioners
Mark Jay Kurtzrock, President and CEO, Metis Secure Solutions
Kris Volpatti, First Vice President/Team Leader/Commerical Real Estate, First Niagara Bank, N.A.
Timothy P. McNulty, Associate VP for Government Relations, Carnegie Mellon University
Dennis Yablonsky, Chief Executive Officer, Allegheny Conference on Community Development
6 RIDC Strengthening Pittsburgh, Building Excellence
2015
Financials Sources of Funds
Uses of Funds
RIDC had a 2015 budget of $41 million, with the majority or revenue coming from rental income. The organization spent nearly half of the budget directly on development expenditures with another significant portion utilized to maintain existing properties and pay down debt. RIDC paid $3.4 million in property taxes in 2015.
2015 Year in Review 7
2015 by the
Numbers Acreage sold
Capital investment
$19.8M
177,410
Square feet renewed
8 RIDC Strengthening Pittsburgh, Building Excellence
29.4
New financing secured
6
$12.1M
185,682
Number of new expansion leases Square feet of new & expansion leases
RIDC & Our
Impact 48
6.8M+
95
5,801
Buildings owned
Companies in our facilities
Square feet owned
Jobs in our tenant’s facilities
$3.4M+ 17,000+
Dollars in annual real estate taxes paid
Jobs in RIDC Parks
2015 Year in Review 9
RIDC
Industrial & Business Parks 224
Lawrence
RIDC Industrial Park
Beaver Industrial Manor
RIDC Thorn Hill Industrial Park
RIDC Neshannock Business Park
O’Hara Township, PA
376
Butler
076
Armstrong
019 119
119
RIDC Park West
422
Beaver Indiana
376 076
Cranberry & Marshall Townships, PA
Allegheny
Findlay & North Fayette Townships, PA
RIDC Keystone Commons
East Pittsburgh & Turtle Creek, PA
279
RIDC City Center of Duquesne Duquesne, PA
022
076
119
Washington
030
070
070
RIDC Industrial Center of McKeesport
Westmoreland
McKeesport, PA
Hopewell Township, PA
New Castle, PA
Lawrenceville Technology Center Pittsburgh, PA
Almono*
Pittsburgh, PA
RIDC Westmoreland
East Huntington Township, PA
Innovation Ridge
Marshall Township, PA
Pittsburgh Technology Center
076
Pittsburgh, PA
079 040
Somerset
Fayette
Greene 019
10 RIDC Strengthening Pittsburgh, Building Excellence
040
*RIDC is the managing partner of Almono, LP
Leasing & Land Sales Notable Renewals
New Leases
Expansions
Land Sales
Building Sales
Consolidated Pipe & Supply Company Industrial Center of McKeesport 12,500 sq ft - 5 years
TAKTL Keytone Commons 120,677 sq ft - 15 years
Innovative Controls Keystone Commons 4,320 sq ft
Innovation Center Associates Innovation Ridge 8.61 Acres - $1.85 Million
Applied Industrial Technologies RIDC Industrial Park - O’Hara 5,125 sq ft - 5 years
Seegrid RIDC Park West 10,000 sq ft
Burns Industrial Equipment Thorn Hill Industrial Park 7.81 Acres - $1 Million
Thermal Transfer Corp Heat Treat Building City Center of Duquesne 127,195 sq ft $823,958
Neurokinetics RIDC Industrial Park - O’Hara 10,000 sq ft -7 years
Paragon Foods Thorn Hill Industrial Park 13.1 Acres - $1.5 Million
Sarclad City Center of Duquesne 10,838 sq ft - 5 years Clarit Realty Keystone Commons 46,717 sq ft - 4 years
2015 Year in Review 11
RIDC
Projects Over the Years Past Projects
Current Projects
Graphic Arts Technical Foundation, Oakland, City of Pittsburgh
RIDC Industrial Park, O’Hara Township, Allegheny County
University Technology Development Center 1, Oakland,
RIDC Thorn Hill Industrial Park,Cranberry & Marshall Townships,
University Technology Development Center 2, Oakland,
RIDC Park West, Findlay & North Fayette Townships, Allegheny County
City of Pittsburgh
City of Pittsburgh
Harmar Manor, Harmar Township, Allegheny County
Butler & Allegheny County
RIDC Keystone Commons, East Pittsburgh & Turtle Creek, Allegheny County
Air Cargo Building 3, Moon Township, Allegheny County
RIDC City Center of Duquesne, Duquesne, Allegheny County
University Technology Development Center 3, Oakland,
RIDC Industrial Center of McKeesport, McKeesport,
Penn Garrison, Cultural District, City of Pittsburgh
Pittsburgh Technology Center, Oakland, City of Pittsburgh
Edgewater Steel, Oakmont Borough
Beaver Industrial Manor, Beaver County
Jackson Building, Cultural District, City of Pittsburgh
RIDC Neshannock Business Park, Neshannock, Lawrence
City of Pittsburgh
800 Penn Avenue, Cultural District, City of PIttsburgh
Allegheny County
County
Lawrenceville Technology Center, Lawrenceville, City of
Software Engineering Institute, Oakland, City of Pittsburgh
Pittsburgh
Pullman Plaza, CIty of Butler, Butler County
Almono*, Hazelwood, City of Pittsburgh
The Bakery, East Liberty, City of Pittsburgh
RIDC Westmoreland Westmoreland County
West Hill Commons, Kittanning, Armstrong County
Innovation Ridge, Marshall Township, Allegheny County
Meadow Ridge Business Park, Mt. Morris, Greene County 12 RIDC Strengthening Pittsburgh, Building Excellence
*RIDC is the managing partner of Almono, LP
60 Years of
Economic Activity Projects by Size While RIDC is most commonly known for the industrial park along Route 28 in O’Hara Township, the organization has taken on projects of various sizes throughout the region over the past 60 years. RIDC has been involved in many projects that are today successful regional developments, like Bakery Square, Edgewater at Oakmont, projects in business parks in outlying counties, and several developments in Downtown and near the universities in Oakland.
- Past Projects - Current Projects 2015 Year in Review 13
Our
Properties
RIDC’s newest building pays homage to past workers This year RIDC speculatively built a new building in the City Center of Duquesne. The Millwrights Building, named for the craftsmen who worked on the land when it was part of the Duquesne Works Steel Mill, is a 30,000 square foot brand new flex building. Designed by Desmone Architects, the building is flexible enough to allow for 1 to 6 companies with light industrial or office uses. The project wasn’t without its challenges. Like many of RIDC’s projects on old steel mill sites, the project encountered old foundations.The site is now a beautiful new building ready to house the region’s growing companies. 14 RIDC Strengthening Pittsburgh, Building Excellence
Jobs & Companies - Jobs in RIDC-Owned Facilities
Beaver 87 4 RIDC tenants 5 RIDC tenants
Lawrenceville 237
- Jobs in Privately-Owned Facilities
McKeesport 145 117 6 RIDC tenants, 8 companies in total 1 RIDC tenant
551
11 RIDC tenants, 16 companies in total 7 RIDC tenants
25 34 RIDC tenants
Park West 262 1,423
5 RIDC tenants, 115 companies in total
3,077
16 RIDC tenants, 130 companies in total
4,475
150
Industrial Center of McKeesport
124
140
Keystone Commons
110
110
16
16
Beaver
7
N/A
Pittsburgh Technology Center
3
Neshannock
Lawrenceville
1,625,606 T h o r n H ill
y
58
174,394
173,740 2,826,260
RID
C O ’ H ar
a
2,731,172 - RIDC-Owned Facilities - Privately-Owned Facilties
ne Co m m
o
2,224,617 268,828
33N/A
st o
Ke
156
Pitts b
109
C
City Center of Duquesne
C it y
223
2,800,000
Square Footage
ns
186
d
Innovation Ridge
t
l
an
340
W es
W e st m ore
lC
enter of Mc
734,769
o rt
112
D
C
e sp
Park West
142,183
317,817 P ark
40,200
er o f Du nt
Ke
364
n d u s trial
a n or
364
rI
M
Westmoreland
i ll e
700
101,349
ter
33
O’Hara
en
925
e ncev
sn e
163
Thorn Hill
e
173,316
wr
ue
Park Total
h Te c h
q
Acreage
RIDC Owned
rg
C
u
425
RI
O’Hara Thorn Hill
7 RIDC tenants, 60 companies in total
3,738
Be ave
1,066
Keystone Commons
a
721
t ri
Westmoreland
489
In d us
Duquesne 207
La
Pittsburgh Tech Center
317,900 2015 Year in Review 15
Industrial Relics Become Centers for Advanced Technology The RIDC Westmoreland Story is the Pittsburgh Region’s Story
As Pittsburgh continues to top “best of” lists, those who have been working in Pittsburgh can explain that the overnight success of
the region was the result of steady and deliberate work over the past 30 years. The region has put enormous efforts into transforming abandoned industrial properties into the centers for today’s newest technologies. A great example of this transformation is the RIDC Westmoreland complex. RIDC was approached by the Commonwealth of Pennsylvania in 2010 to help form a plan for the vacant 2.8 million square foot facility that had housed Sony Corporation (and before that Volkswagen) along with thousands of workers. Utilizing an approach that had worked at the former Westinghouse complex, RIDC partnered with Westmoreland County Industrial Development Corporation (WCIDC) to rehab the facility into a multi-tenant center for advanced manufacturing companies. The region showed a need for facilities that could accommodate large manufacturing companies and could provide greater stability to the surrounding communities. The facility got its first new manufacturing tenant in 2012 when Aquion Energy, an emerging Carnegie Mellon University spin-out and maker of a sodium-ion battery for renewable energy, announced it had chosen to locate its large-scale manufacturing facility in the Pittsburgh region. Aquion has received global attention over the past few years and in 2015 was named a top 25 Smartest Company by MIT Technology Review. Today the facility has approximately 1 million square feet under long term lease and is home to over 720 quality jobs with tenants like Aquion, DNP America, Westmoreland County Community College’s Advanced Tech Center, and Cenveo.
16 RIDC Strengthening Pittsburgh, Building Excellence
RIDC Industrial Park located in O’Hara Township was RIDC’s first industrial park and was also among the first planned business parks in the state and country. Its purpose was to attract light industrial tenants looking for room to grow in a convenient, attractive location. Located in the park, the Townhouses for Industry was a multi-tenant structure built by RIDC in 1963 to offer a “front door” to the region’s small businesses.
The industrial park remains one of the most desired locations for companies in the region and is now home to nearly 5,000 jobs in companies of various sizes. As times have changed over the last 50 years, the park has kept pace. Employees have asked for a safe place to walk, fun places to eat lunch, beautification, and increased transit service. This year marked the opening of a walking path through the park, reinstatement of Port Authority bus service, a food truck lunch event, and improvements to several properties. RIDC undertook a façade renovation to the Townhouses in 2015 to modernize the building with a new look, tinted glass, energy efficient lighting, and updated ADA entrances. The building houses 8 companies, many of which are in the technology sector.
RIDC O’Hara in the mid-70s
RIDC Celebrates 50 Years of the “Townhouses for Industry”
New Look, Same Purpose
2015 Year in Review 17
Financing Assistance
RIDC Leverages Over $3 million to Finance a Manufacturing Company’s Expansion One of RIDC’s greatest tools to helping companies grow jobs in the Pittsburgh region is the ability to offer financial assistance to a company’s expansion. RIDC was approached in 2015 by manufacturing company TAKTL about a need for more and higherquality space to meet increasing demand for their product. The company develops and manufactures an Ultra High Performance Concrete that has been used in architectural façade panels in high-profile projects across the country such as the UCONN Basketball Development Center and the new Smithsonian museum in Washington, D.C. RIDC utilized two low-interest loans from the PA Industrial Development Authority, a grant from the Industrial Sites Reuse program, and its own equity to finance the project. Over the past year, RIDC has financed and managed the build-out of 145,000 square feet of renovated manufacturing space for TAKTL in RIDC’s Keystone Commons complex. The new facility provides the company, which employs 120 people, increased capacity and more efficient space that allows them to better react to customer demand. 18 RIDC Strengthening Pittsburgh, Building Excellence
RIDC was able to obtain over $13 million in local and state funding to assist with development projects. Keystone Commons was the recipient of a large portion of financing which was used for renovations in preparation for future tenants.
Financing
PA Industrial Development Authority
Property
Project
Amount
Keystone Commons
East Shop Crane Shed
$2,062,669 $767,331
Almono
Mill 19 Building Industrial Park Loan
$5,000,000 $2,250,000
Penhurst Realty III, LP
TruFoods, Inc
$2,000,000
Keystone Commons
Environmental Remediation
$375,000
Mill 19 Almono
Environmental Remediation
$562,500
RIDC Westmoreland
Environmental Remediation
$88,425
Low-Interest Loans
Industrial Sites Reuse Grants
Total: $13,105,925 2015 Year in Review 19
Land Development A primary focus of RIDC’s activities involve land development – work that is essential to attracting companies to our region, but is an often overlooked step. Well before a company opens the doors to a new building, the land must be prepared, roads built, utilities in place, and off-site transportation improvements undertaken. This work is rarely deemed news-worthy. The work is also risky because it has often undertaken several years before a company decides to locate there. Because of this, land development has been one of those tasks that RIDC takes on speculatively.
This year RIDC was active in two major land development projects. At Innovation Ridge, RIDC prepared 26 acres of land to facilitate development in the office and R&D park which enabled the sale of a 9-acre parcel to a private developer for an office building. Other activities this year across RIDC’s portfolio included off-site transportation improvements, stormwater & wetland improvements, and the creation of a recreation trail. RIDC, as managing partner of Almono, also started the first phase of infrastructure improvements at the Almono site in the Hazelwood neighborhood of the City of Pittsburgh. Breaking ground on the $22 million project was a huge milestone after several years of planning, design, and engineering work. The first new road and site utility trunk should be completed by the Spring of 2017. 20 RIDC Strengthening Pittsburgh, Building Excellence
Almono engaged the world-renown design firm Perkins+Will to enhance the current master plan and create an implementation plan for development. Building on the goals developed in the community visioning process in 2011, Perkins+Will’s work put a greater emphasis on high-quality urban design, mixed-use districts, and ambitious sustainability standards. The result is a development plan that is truly worldclass. The plan calls for Phase 1 of the development to center around the Mill 19 building and includes a 2-acre public plaza.
Almono was also pleased to host Thrival music festival which featured 25 bands over 2-days in September. The concert was located alongside the Mill 19 building with views of downtown and Oakland. Over 11,000 people attended the festival, which was the capstone event of a week of Thrival Innovation events throughout the City.
Almono
A World Class Sustainable Innovation District Pittsburgh Post-Gazette, “Years from now people might not remember who played the third annual Thrival Festival, but they’re never going to forget the place.”
210 6th Avenue • Suite 3620 • Pittsburgh, PA 15222 • www.ridc.org • (412) 471-3939