L A I R T S U D N I L A REGION N O I T A R O P R O C DEVELOPMENT LVANIA NSY
EN P N R E T S E W H T OF SOU 2014 YEAR IN
REVIEW
Table of Contents 2014 Financials............................... 1 Letters from the President and Board Chair........................... 2-3 2014 by the Numbers..................... 4 The RIDC Mission............................ 5 Economic Impact......................... 6-7 Property Map................................. 8 Financing Assistance....................... 9 Leasing and Land Sales................. 10 Foreign-Trade Zone and Development......................... 11 Property Highlights.................. 12-23
2014 Financials Sources of Funds Rent & Reimbursements Other Financing Proceeds from Property Sales, Net Grants
RIDC obtains the majority of its funds from the proceeds of the leases and land sales. 2014 was a particularly active year for property sales, which included the sale of two office buildings.
Uses of Funds Real Estate Taxes Property Maintenance & Utilities G&A Professional Fees Debt Service & Line of Credit Development Expenditures
Over $20 million – the largest category – was spent on development expenditures.
2014 Year in Review 1
RIDC CORPORATE OFFICERS
Letter from the President
Donald F. Smith, Jr., PhD President Ronald Coombs Chief Financial Officer William Kirk, Jr. Vice President, Real Estate Operations Timothy White Vice President, Development Colleen Poremski Corporate Secretary Donald F. Smith, Jr., PhD
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 Eric Cartwright Vice President, UPMC Corporate Construction and Real Estate G. Reynolds Clark Vice Chancellor, Community Initiatives, Chief of Staff, University of Pittsburgh The Honorable Rich Fitzgerald County Chief Executive, County of Allegheny Steven J. Guy President & Chief Executive Officer, Oxford Development Company Michael J. Hannon Executive Vice President/ Chief Credit Officer, PNC Bank continued
2014 was another strong year for RIDC. We were able to complete three major tenant improvement projects. At RIDC Westmoreland, Cenveo was welcomed as the third major manufacturing tenant in the facility with a major redevelopment of 300,000 square feet of space. The vacant Heppenstall Mill Building was transformed into a bright, modern R&D and assembly space for Carnegie Robotics – a 2014 NAIOP award winning project. SDC Nutrition, a rapidly expanding tenant, moved into formerly vacant space in RIDC Park West.
The SDC Nutrition in particular story highlights the role RIDC plays in the region. More than just a developer or a landlord, RIDC supports companies that have the potential to create good-paying jobs in our region. In 2014, RIDC invested in and managed the build-out of the 60,000 square foot facility that SDC Nutrition is leasing for their new global headquarters. And with RIDC’s network of properties, RIDC is able to support companies at all stages of their life cycle. As a small start-up, RIDC was able to offer SDC Nutrition affordable space for their new manufacturing process in Keystone Commons. As they grew, RIDC transitioned them to a bigger space that was built out for their needs. Tenant projects like these and other major redevelopment projects like Almono are made possible because of productive partnerships with the Commonwealth of Pennsylvania. Working with the Department of Community & Economic Development and the Department of the Budget, RIDC is able to support good-paying jobs that sustain the economy. In fact, RIDC supports companies that have a larger economic impact than the average regional firm. Every job in the facilities of RIDC’s tenants supports an additional 1.5 jobs in our region – a much higher multiplier than the 0.6 regional average.
Donald F. Smith, Jr., PhD President
Letter from the Board Chair RIDC has often been an invisible hand in important projects throughout the region. Working as a partner, usually at the beginning and toughest part of a project, RIDC takes on remediation, infrastructure, and construction risks that the private market is not willing to do. Years later, when the projects are successful, RIDC’s role is largely lost from the story. This past year, RIDC declared mission accomplished for two such projects – 2000 G. Reynolds Clark Technology Drive and the Collaborative Innovation Center. The office building at 2000 Technology Drive was an early catalyst for the Pittsburgh Technology Center, which was one of the first brownfield projects in the Commonwealth. RIDC urged the City’s Urban Redevelopment Authority (URA) to purchase the property in 1984. RIDC oversaw design and construction of the 48-acre site’s infrastructure. In 1997, RIDC built 2000 Technology Drive to house partners of the then Oakland Alliance. A former mill that once produced 800,000 tons of rolled steel transformed into hightech riverfront space. RIDC returned the Collaborative Innovation Center back to Carnegie Mellon University’s control this year. The CIC was a collaborative project between RIDC and the university, with financial support from the URA and the Commonwealth to create space for university-related technology companies in the region. CMU leased the land to RIDC to build the dry lab research center, which opened in 2005. The CIC became the landing pad for nationally-known technology companies including Google, which later expanded to Bakery Square -- another property RIDC rescued from demolition before selling it to Walnut Capital for the Bakery Square development. CIC also became the region’s home to Disney, Apple, and Intel.
G. Reynolds Clark Board Chair
RIDC BOARD OF DIRECTORS continued
Scott D. Izzo Director, Richard King Mellon Foundation Dennis M. Joyce Managing Director, The Bank of New York Mellon Corporation Mark Jay Kurtzrock President and CEO, Metis Secure Solutions Timothy P. McNulty, Associate VP for Government Relations, Carnegie Mellon University 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 The Honorable Rodney D. Ruddock Chairman, Board of Commissioners, Indiana County Audrey Russo President & Chief Executive Officer, Pittsburgh Technology Council Darrell E. Smalley Principal, State and Local Tax, Ernst & Young LLP Donald F. Smith Jr., PhD. President, RIDC Sam Stephenson, CPA, Retired Partner, ParenteBeard LLC The Honorable Daniel J. Vogler Chairman, Lawrence County Board of Commissioners Kris Volpatti First Vice President/Team Leader/ Commercial Real Estate, First Niagara Bank Dennis Yablonsky Chief Executive Officer, Allegheny Conference on Community Development
2014 Year in Review 3
2014 By the Numbers
$20,611,701
Financing assistance in 2014
Capital investment in 2014
Acreage sold in 2014
33
$14,973,966 358,147
328,902
Square feet of new and expansion leases 4 Regional Industrial Development Corporation
Number of new or expansion leases
Square feet renewed
4 leases
THE RIDC MISSION The mission of the Regional Industrial Development Corporation of Southwestern Pennsylvania is to catalyze and support economic growth and high quality job creation through real estate development and finance 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.
2014 Year in Review 5
RIDC AND OUR IMPACT: STRENGTHENING THE PITTSBURGH ECONOMY AND CREATING HIGH QUALITY JOBS
49 Buildings Owned
6 Regional Industrial Development Corporation
6.9M+ Square feet Owned
1,317
102
Current Acreage Owned
Total Companies in our Facilities
5,609
$4.4M+
$194M+
Jobs in our Tenant’s Facilities
Annual Real Estate Taxes Paid
PIDA Loans Sponsored in our History
$3B Economic Impact of the Tenant’s we Support
2014 Year in Review 7
RIDC Industrial & Business Parks
RIDC Industrial Park O’Hara Township, PA
Beaver Industrial Manor Hopewell Township, PA
RIDC Thorn Hill Industrial Park Cranberry & Marshall Townships, PA
RIDC Neshannock Business Park New Castle, PA
RIDC Park West Findlay & North Fayette Townships, PA
Lawrenceville Technology Center Pittsburgh, PA
RIDC Keystone Commons East Pittsburgh & Turtle Creek, PA
Almono* Pittsburgh, PA
RIDC City Center of Duquesne Duquesne, PA
RIDC Westmoreland East Huntington Township, PA
RIDC Industrial Center of McKeesport McKeesport, PA
Innovation Ridge Marshall Township, PA
Pittsburgh Technology Center Pittsburgh, PA
Collaborative Innovation Center (CIC)** Carnegie Mellon University, Pittsburgh PA
*RIDC manages, but does not own Almono **CIC was sold in 2014
8 Regional Industrial Development Corporation
Financing Assistance RIDC was able to obtain over $14 million in local and state funding to assist with development projects. Almono was the recipient of a large portion of that financing which will be used to fund the Phase 1 infrastructure for the 178 acre brownfield redevelopment.
Financing
Property
Project
Amount
Commonwealth of Pennsylvania— Redevelopment Assistance Capital Program
Almono
Phase 1 infrastructure
Commonwealth Financing Authority— Multi-modal Fund
Almono
Streetscapes
PennDOT
Almono
Off-site transportation improvements
City of Duquesne, Duquesne School District, Allegheny County— Tax-Increment Financing
Duquesne
New flex building construction
$300,000
Pennsylvania Industrial Development Authority— Low-Interest Loan
O’Hara Townhouses for Industry
Exterior storefront replacement work & tenant improvements
$825,000
Pennsylvania Industrial Development Authority— Low-Interest Loan
Duquesne
New flex building construction
Pennsylvania Industrial Development Authority— Low-Interest Loan
RIDC Westmoreland
Tenant improvements Aquion Energy
$843,254 * loan increased by
Pennsylvania Industrial Development Authority— Low-Interest Loan
Park West Manor
Tenant improvements SDC Nutrition
$785,000
Industrial Sites Reuse
Keystone Commons
Environmental assessment
$30,712
$5,000,000
$400,000
$5,000,000
$1,790,000
$14,973,966
2014 Year in Review 9
Leasing and Land Sales Cenveo, an envelopes manufacturer, signed and occupied over 300,000 square feet of space within the RIDC Westmoreland complex. RIDC also had several large renewals during 2014 as well as two expansions. Multiple property sales closed in 2014 which included land and buildings.
Renewals Mackin Engineering Park West 15,075 sq ft - 5 years
Bard/Dymax Electron Thorn Hill 21,125 sq ft - 2 years
3 Rivers/ Kadmon Thorn Hill 55,950 sq ft - 6 years
Geotechnics Keystone Commons 15,360 sq ft - 7 years
New Leases Ottomatika RIDC Industrial Park 10,250 sq ft - 5 years
Cenveo RIDC Westmoreland 302,297 sq ft - 10 years
Apple Cookie Keystone Commons 1,927 sq ft
Neuro Kinetics RIDC Industrial Park 5,000 sq ft + 5 year renewal
RIDC Park West Parcels CRG-Park West PA, LLC 11.9 Acres $1.82 Million
Thorn Hill Parcel Forza Group 21.1 Acres $1.2 Million
Collaborative Innovation Center – CMU 127,794 sq ft $350,000
2000 Technology Drive Tech Drive Partners 68,324 sq ft $10.68 million
Expansions
Land Sales
Building Sales
10 Regional Industrial Development Corporation
Foreign-Trade Zone and Development RIDC had a very active year, completing over $20 million of development work. Projects included new tenant improvement projects, such as Carnegie Robotics, Cenveo, and SDC Nutrition that are featured in more detail in this report, as well as capital improvements to our industrial parks. Keystone Commons underwent a major portal transformation to improve site access, and several buildings received new or updated roofs. RIDC operates the Foreign-Trade Zone (FTZ) #33 in Southwestern Pennsylvania, which is a program of the U.S. Department of Commerce established to attract and promote international trade and commerce. This past year, RIDC assisted: • Mitsubishi Electric Power Products, Inc. Expansion of their subzone to now cover 103 acres on five sites. • Steelite International (Millennium Business Park, Lawrence County) Increased the FTZ space that is in their approved site. • TruFood Manufacturing (RIDC Industrial Park, O’Hara Township) Began using their approved FTZ.
2014 Year in Review 11
: S K R A P N A B SUBUR xpansion
E RIDC Invests in
Park West Industrial Park RIDC helped SDC Nutrition, a Pittsburgh-based health supplement manufacturing company, expand their business. SDC Nutrition had leased a smaller space in a RIDC multi-tenant complex for the past three years, but RIDC found the company a larger space to meet their quick expansion needs. RIDC built out the 60,000 squarefoot space in RIDC Park West during 2014, with a ribboncutting ceremony held in October. RIDC also sold nearly 12 acres to Clayco, a developer from St. Louis, MO, in order to build an office building for Walgreens. The facility – and the hundreds of good-paying jobs that will come with it – will be a great asset to the RIDC Park.
12 Regional Industrial Development Corporation
Acreage RIDC owned...................... 112.4 Park total.............................. 340
Square Feet RIDC owned.................. 174,394 Park total................. ~1.8 million
Jobs RIDC buildings...................... 212 Park total...............................n/a
Companies RIDC buildings.......................... 7 Park total................................ 60
RIDC Industrial Park First developed 50 years ago, RIDC Industrial Park in O’Hara Township was RIDC’s first business park. Because of park covenants that raised the standards for construction and maintenance and after several recent development projects, the park continues to be an appealing location for growing companies in the region. RIDC Industrial Park is home to TruFoodMfg and Zoll – companies that have been rapidly expanding over the last year – as well as Giant Eagle’s corporate headquarters and Emerson Process Management. This year saw new activity in RIDC Industrial Park. Two tenants in the “Townhouses for Industry” building are expanding: NeuroKinetics, who recently received a grant from the NFL to develop its concussion diagnostics, and Synergy Media, an audiovisual technology provider. Next door, new tenant Ottomatika, who is Carnegie Mellon University spinout focused on automated vehicles, recently announced a partnership with Delphi Automotive.
Thorn Hill Industrial Park Thorn Hill continues to be one of the region’s most attractive locations for companies to locate. Pella Windows completed construction of its new showroom and warehouse, and CW Development, a partnership with Elmhurst Development was busy with the construction of the second phase of their flex industrial complex. The 2014 year was busy with prospect activity, and RIDC is excited to announce more land sales and subsequent new construction in 2015.
Acreage RIDC owned........................... 33 Park total.............................. 700
Square Feet RIDC owned.................. 268,828 Park total.................... ~3 million
Jobs RIDC buildings................... 1,312 Park total......................... 5,000+
Companies RIDC buildings........................ 16 Park total.............................. 130
Acreage RIDC owned.................... 184.16 Park total.............................. 925
Square Feet RIDC owned.................. 173,740 Park total.................... ~3 million
Jobs RIDC buildings...................... 453 Park total...............................n/a
Companies RIDC buildings.......................... 5 Park total............................ ~115
2014 Year in Review 13
: N O I T A V O N E botics Center INDUSTRIAL R cility into a F l ia tr s u d In s RIDC Transform
Ro
Lawrenceville Technology Center RIDC completed a full transformation of the former Heppenstall building in Lawrenceville. Starting with a vacant former mill building, RIDC redeveloped the space into a world-class robotics innovation and production facility. The tenant is Carnegie Robotics, a spin-out of the nearby National Robotics Engineering Center (NREC). RIDC provided $2 million in financial assistance to Carnegie Robotics as part of a $3 million total project budget for the renovation.
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Acreage........................ 15.6 Square Feet...........101,349 Jobs............................... 179 Companies........................ 5
BEFORE
DURING
AFTER
2014 Year in Review 15
T: N E M P O L E V E D on Valley OWNFIELD RE
BR
vements ro p Im in t s e v In tinues to
in the M
RIDC Con
City Center of Duquesne RIDC began undertaking an exciting project in Duquesne - a 30,000 square-foot speculative flex building. At both the Duquesne & McKeesport site, flex space was 100% occupied. Realizing that there was more demand for this product, RIDC started designing and engineering a new building. The Redevelopment Authority of the City of Duquesne assisted RIDC in obtaining Tax-Increment Financing funds to support the project. Watch for construction to be completed in 2015.
Acreage RIDC owned......................... 109 Park total.............................. 156
Square Feet RIDC owned.................. 239,378 Park total....................... 460,000
Jobs RIDC buildings...................... 190 Park total.............................. 759
Companies RIDC buildings........................ 11 Park total................................ 15
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Industrial Center of McKeesport Duquesne Light constructed a new 26,000 square-foot service facility in RIDC McKeesport in 2014, making it the third new building in RIDC’s Mon Valley parks in the last five years. RIDC’s new Duquesne flex building will be the fourth.
Acreage RIDC owned.................... 124.16 Park total.............................. 140
Square Feet RIDC owned.................. 734,769 Park total.................... 1,052,669
Jobs RIDC buildings...................... 207 Park total.............................. 343
Companies RIDC buildings.......................... 6 Park total.................................. 8
Keystone Commons Continuing to see strong manufacturing demand, RIDC undertook an entrance reconstruction project at the Keystone Commons complex to improve access for current and prospective tenants, many of which are heavy manufacturers who operate multiple shifts. The $2.25 million project included new concrete entrances, energy efficient lighting, utility improvements and extensions, repaving, and new landscaping.
Acreage RIDC owned......................... 110 Park total.............................. 110
Square Feet RIDC owned............... 2,224,617 Park total.................... 2,224,617
Jobs RIDC buildings................... 1,052 Park total........................... 1,052
Companies RIDC buildings........................ 34 Park total................................ 34
2014 Year in Review 17
RIDC ACCOMPLISHES MISSION
In 2014, RIDC sold two of its high-tech urban office buildings this year:
• The Collaborative Innovation Center (CIC) was acquired by Carnegie Mellon
University in October. The CIC was a collaborative project between the RIDC and Carnegie Mellon, along with the Commonwealth of PA and the Urban Redevelopment Authority to create a landing pad for university-related technology companies in the region. The 127,794 square foot dry-lab research building became home to several nationally known technology companies, including Google, Disney, Apple, and Intel. • The 2000 Technology Drive Pittsburgh Technology Center (PTC) – one of the first brownfield redevelopment projects in the State. Site remediation and infrastructure started in the late 1980s, with three buildings constructed in the early 1990s by University of Pittsburgh, Carnegie Mellon University and RIDC. In 1997, RIDC built 2000 Technology Drive. University-community partnerships to support the growth of corporate and university collaborations were a key driver in the redevelopment of the PTC and the revitalization of the Pittsburgh regional economy. The PTC development not only served as proof that brownfield developments were possible, but also that Pittsburgh could embrace and thrive in a new economy.
18 Regional Industrial Development Corporation
: T N E M P O L E V NEW LAND DE Innovation Ridge RIDC continues to pursue new land development projects to create landing pads for companies looking to locate in our region. Innovation Ridge is poised to be a premier destination for office and R&D users, with executive residences constructed on nearby pads and the space for a quiet campus near major transportation routes. RIDC took on engineering for pad preparations in 2014; Phase 2 off-site transportation improvements were also completed.
Acreage RIDC owned......................... 195 Park total.............................. 223
2014 Year in Review 19
: T N E M T S E V N I REGIONAL the Region ughout
act Thro p Im to s e u n ti n o RIDC C
RIDC Westmoreland RIDC Secures Their Third Large Manufacturing Tenant
Acreage...................... 364.8
RIDC signed its third major manufacturing tenant at the Square Feet........2,800,000 RIDC Westmoreland complex. Cenveo, Inc. relocated Jobs............................... 643 multiple facilities into 300,000 square feet of newly Companies........................ 7 renovated and retained space while adding jobs in Pennsylvania. The space was designed to be one of Cenveo’s envelope showcase facilities, allowing increased innovation in the areas of mail and sophisticated graphics. Nearly $4 million was invested in the space as RIDC worked with the new tenant on design, demolition, and build-out. RIDC continues to focus on restoring the RIDC Westmoreland facility as a significant employment center for the region. With this recent relocation by Cenveo, the facility is now home to nearly 700 workers.
20 Regional Industrial Development Corporation
Advanced Manufacturing Training Partner Locate in the Facility 2014 also officially welcomed the Westmoreland County Community College’s Advanced Technology Center (ATC) to the RIDC Westmoreland complex. The 72,000 square foot facility houses industry-aligned workforce development programs in areas such as advanced and additive manufacturing, energy, mechatronics, machine and fabrication, and materials joining/ welding. The ATC has classrooms and labs outfitted with specialized equipment, and open flexible instructional space. RIDC is excited to have such a great resource in the building with the other manufacturing tenants.
Beaver Industrial Manor RIDC owns and manages a multi-tenant building within the Hopewell Industrial Park. The building was a catalytic investment in partnership with the Beaver County Corporation for Economic Development. The building is fully leased.
Acreage........................ 6.67 Square Feet............. 40,200 Jobs............................... 101 Companies........................ 4
Neshannock Business Park One new building was constructed and another expanded in 2014. Magnetic Lifting Technologies completed a 27,000 square foot expansion to their existing building. GPS Realty built a 34,700 square foot facility. The Neshannock Business Park has served as critical piece of real estate for companies looking to locate in Lawrence County.
Acreage RIDC owned...................... 58.22 Park total.............................. 150
Square Feet RIDC owned............................. 0 Park total....................... 228,919
Jobs RIDC buildings.......................... 0 Park total...............................n/a
Companies RIDC buildings.......................... 0 Park total.................................. 7
2014 Year in Review 21
: N O I T A M R O F pportunity O f o e TRANS c la P a to ill Site rmed from a M fo s n ra T is o n o Alm
Almono A $9 million site grading project with more than 35% of minority and women-owned firm participation was completed in 2014, transforming the site. The project had the following accomplishments: • Moved over 800,000 cubic yards of fill • Crushed numerous foundations and driveways • Seeded the entire site • Installed three temporary stormwater ponds • Opened up the wall on Second Avenue onto the site
22 Regional Industrial Development Corporation
Phase 1 infrastructure work is now ready to start. The project is nearing regulatory completion of our plans and hope to mobilize the project, which includes trunk utilities and a riverside road extending the length of the site, before the end of 2015. The Phase 1 work will open up the entire site for development. The road will be a complete street – providing trucks, cars, buses, bikes, and pedestrians safe transportation access throughout the site. Almono received $10.4 million in 2014 in various State funds to support the construction of utilities and multi-modal transportation infrastructure.
J & L Coke Works
2003-Almono Acquires Site
2012
2014 Site Grading Complete
2014 Year in Review 23
24 Regional Industrial Development Corporation
210 Sixth Avenue, Suite 3620 Pittsburgh, PA 15222
210 Sixth Avenue• Suite 3620 •Pittsburgh, PA 15222• www.ridc.org• (412) 471-3939