Herb Burger, former head of the Pittsburgh Task Force, has an intriguing op-ed in the Post-Gazette today. It basically says that in crafting a new plan for the Forbes-Fifth corridor, Mayor O'Connor dumped DC-based developer Madison Marquette because he wanted to go local. But is that what the mayor says? And either way, is that OK? In some circles, "going local" can be seen as "crony capitalism." Here are some details from Burger's piece, emphasis added:
Madison Marquette people spent several months here studying the market. They had skills, resources, and retail contacts and were interested. At the time, they enthusiastically saw great potential in the city. We knew that the state, foundation and other funding sources would require a lead developer who could assume financial responsibility. This option changed with the election of a new mayor who wanted to review proposals by Pittsburgh firms, not national companies. Faced with this decision, Madison Marquette decided to focus their attention on more immediate projects and withdraw their involvement.
... The final choice of a developer is the mayor's prerogative, so the development has taken a new turn. We now needed to find a local developer.
Now, there might be a lot of reasons for this. The local people might have had better plans. Or they might have been cheaper. But I don't recall anyone ever saying, "Outsiders need not apply." But isn't that what Burger is saying here?
And keep in mind that this is the kind of thing the Post-Gazette specifically warned against in an editorial way back in February:
Madison Marquette, which has been courted by the Pittsburgh Task Force to help revive Fifth and Forbes, sought the mayor's approval for exclusive rights to redevelop the publicly owned properties in the corridor. Mr. O'Connor declined, however, saying he wants to review other proposals and choose the best for the city.
The mayor is right to let competition improve the deal. Madison Marquette and local developer Ralph Falbo are two of the developers with an interest in the neighborhood.
Just as the work shouldn't go to the first bidder, however, it also shouldn't go to a firm because it's homegrown. If Mr. O'Connor truly wants "to evaluate who has the best scenario for the people of Pittsburgh," he'll weigh each plan before giving any the green light.
So? Exactly what happened here? Was Madison Marquette on the outs as soon as O'Connor took over? Then why didn't everyone say so instead of worshiping at the altar of "competition"? I am eager to see the Post-Gazette revisit the issue.
Not that any of this proves that the chosen plan isn't the best one for the city. Or the least bad. Still, wouldn't a savvy negotiator blanch at this kind of business transaction, detailed in Burger's piece?
A developer my wife and I had worked with on another project invited me to a lunch with Jack Piatt, a Washington County developer. If you want imagination, and courage, Jack Piatt fits the bill. This distinguished looking entrepreneur -- silver hair, sparkling blue eyes -- was clearly a man of action. When he saw an aerial photo of the Downtown he said, "What's for sale?" I said that the Lazarus building was available. He responded with, "How much?" I gave him an estimate and he said, "I'll buy it and make it my signature building."
Well, doesn't that indicate that the asking price might have been a little low? I mean, deciding on the spot? I'm no real-estate tycoon, but might it not have been better to start high?
Sheesh.
Amen.
Posted by: Mark Stroup | May 15, 2006 at 07:50 AM