AntiRust

Big Steel: The State of Industry

Here's some interesting commentary on the state of Big Steel. Be sure to click through to the LA Times story. It's all about how government support for steel companies has negative impacts across the larger economy.

Thought-provoking stuff. I wonder what Pittsburgh might be like today if Homestead and the rest of them were still rolling. They would almost certainly employ far, far fewer people than they did even in the early 1980s. Of course, they would all be making union wages.

I don't know. Would it be a good thing? Or looking back on it, are people glad the mills closed? I can certainly understand an argument saying that a more gradual decline might have eased the pain a bit. But even then, maybe not. Or maybe Big Steel's decline WAS gradual. (People were worried about the state of the industry long prior to WWII.)

At any rate, check out the article.

Developing Entertainment: West Virginia Waterslide

The Post-Gazette has an interesting story about a huge water park going up in West Virginia. 

Marion County Commission President Cody Starcher had an empty plot of land to fill. A friend had a vision that required plenty of land.

The two men got to talking a couple years back while sharing a ride from Charleston back to northern West Virginia. The result: a plan for Volcano Island, an $87 million water park and family resort that West Virginia officials believe will lure tourists, create more than 500 jobs and rejuvenate an ailing economy that never recovered from the loss of local industries.

"I think it's going to be a Disney World for us,'' Mr. Starcher said yesterday as he grinned and gazed around the former industrial complex in Fairmont where a very different kind of peak is being planned for the Mountain State.

I have no views on whether this is a good plan for the site, but the process that got it moving is worth a look:

The resort will rise on once-polluted property that, over the past 88 years, housed the defunct Fairmont Coke Works, Standard Oil Co.'s Domestic Coke plant and a Sharon Steel Corp. plant that produced coke and coke by-products.

After Sharon Steel shut the plant in 1979 and filed for bankruptcy protection, the federal Environmental Protection Agency placed the property on its Superfund priority list and worked with Standard Oil's descendant, ExxonMobil, the state and the city to clean up contaminants.

Marion County and Fairmont city officials had tried to market the land, which had been held in a court-ordered trust and was not generating real estate taxes. Then, Mr. Starcher rode home from Charleston with Dave Rees, a Morgantown businessman and developer, and heard Mr. Rees mention his interest in developing a water park near Martinsburg, in West Virginia's eastern panhandle.

"I told him, hey, we had the perfect site,'' Mr. Starcher said. Private and government officials arranged for the release of the land from the trust and drafted plans for the resort, which will be built with private funds.

I don't know what to make of that. Is this a land giveaway? I think you have to worry any time a story starts out with, "Marion County Commission President Cody Starcher had an empty plot of land to fill. A friend had a vision that required plenty of land." It's usually not such a good thing for county commissioners to be doing official business--especially multi-million dollar development business--with friends. And if I lived there, I might wonder to what extent the county had actually tried to market the land.

There are lots of other questions. But this story seem to have some encouraging chapters. I like the bit about the park being built with private funds.

This will be a fun one to watch--particularly after it gets built. Does Big Tourism work? And in the end, is it any better than Big Coal or Big Steel or Big Airport or Big University?

Free Markets and Tourism: A Study in Rural Redevelopment

Here is a fascinating article about how my hometown has redeveloped over the past few years. Here's a bit of it:

Following the meeting, DiBerardinis and [Department of Community and Economic Development Secretary Dennis] Yablonsky toured Ridgway and met with business owners and others in the tourism field. Yablonsky said that the governor has made it very clear that economic growth will not just be about Philadelphia and Pittsburgh, but will also help out the smaller communities throughout the state. Just under $10 million has been given to get programs started.

"We want to know what's working and what isn't working," he asked.

Steve Kronenwetter, owner of Wapiti Woods in Benezette, said that he hasn't had much [local] support in this business.

"I haven't had a visit from anyone. I have had a lot of help from the state and from my bank. I wouldn't have been able to survive my first year without the state and my bank."

Interesting. Over the years, it has occurred to many folks that very little happens anymore without at least some form of government support. Even restaurants. That is certainly an interesting development.

At the same time, things occasionally do happen on their own.

Business owners Dick Garrard and Lou Smith echoed the problems with getting local assistance. Garrard said he went to the Progress Fund for help in relocating his existing business. He needed $140,000 to complete the project. The interest they wanted was 8 3/4 percent and needed to be paid in 10 years.

"He wanted my life insurance policy and my house," Garrard said. "The mafia would do better. The state wouldn't give me a damn thing. This is where I am coming from."

"We were turned down at every single door we knocked on," Smith said. "We were going to build a 40-bed lodge and were will to put up half the money." They ended up with only 20 beds at Scottish Heights.

I am sure that was a frustrating experience. But 20 beds is nothing to sneeze at. Is it so bad to test the market with that first? And if it's successful move to 40 beds? Or 100? And is it such a terrible thing to expect private enterprises to provide more than half of the funding for projects meant to generate private profits?

I know most of the people mentioned in this essay. Good folks across the board. But it does appear to me that they are operating in a strange sort of universe. The "independent woodsman" was never quite as independent as rural communities have liked to imagine over the years. But there did appear to be at least some kind of value in maintaining a degree of skepticism about outside control.

Whether that was a broad truth, a useful fiction or a dangerous illusion, it does appear to be fading into the background as local communities get more and more sophisticated about attracting development dollars. And politicians find more creative ways to buy rural votes.

Is that a good thing or a bad thing?

Uh Oh: What Happened to Our Free Arena?

A few weeks back there was a discussion here about the Post-Gazette's continued insistence that the Isle of Capri's casino proposal would provide Pittsburgh with a "free arena." In the paper's own words:

If Isle of Capri wins the gambling license (as the Post-Gazette has argued), the new igloo is free.

Not so, I said. The government would in fact be paying for the arena by issuing an incredibly valuable local gambling monopoly to IOC. One which we cannot value in real dollar terms because officials declined to issue the license through an auction. And as structured, the proposal would actually deliver not an arena, but $290 million. Which someone would spend on an arena. That is, it would not be a free arena. Etc. Etc.

Has the Post Gazette come around to my way of thinking? Probably not. But it does appear that the editorial board has changed its terminology a bit. From today's paper:

Last March the Post-Gazette editorial board endorsed the same proposal, which would put a casino along Fifth Avenue in the city's Uptown section, pay $290 million toward replacement of Mellon Arena and team with Nationwide Realty to redevelop the lower Hill District.

"Paying $290 million toward replacement of Mellon Arena" is different than a "free igloo." It might seem like a minor point. But I don't think so. Language is important. And so is accuracy in reporting. It is critical for people to understand that officials could have chosen to do a lot of things with this slots license. They could have encouraged or forced the ultimate recipient to "pay $290 million toward" a lot of things. Debt service. Schools. Roads.

Or they could have just requested cash and decided what to do with the money through the regular legislative process. A little tax relief. A little crime control. A little debt service. None of that stuff would have been free, of course. It would have been government spending. And I suspect that given the current political climate, a lot more people would have balked if the city had chosen to invest 100 percent of its cut into a new hockey arena.

At any rate, I think the new editorial offers a more accurate version of the tradeoffs involved.

No word yet on whether anyone opposed to Plan B is still an idiot.

Downtown Pittsburgh, Upscale Retail and the Art of Control

Hey, look. I would shop at Saks Fifth Avenue if I could afford to. I assume it's a great store. But what in the world does this mean?

From today's Tribune-Review:

So city leaders and advocates of Downtown retailing are ready to do whatever they can to keep upscale Saks happy.

"We are continuing discussions with Saks," said Jerome Dettore, executive director of the Urban Redevelopment Authority. "We want to make sure that Saks stays Downtown, and we are working toward that end."

I can only imagine.

In the meantime, this seems even weirder:

Over the years, Saks has considered expanding its Smithfield Street site, possibly using the abandoned Revco drug store building that has an entrance on Fifth Avenue and stands between its store and the former Lazarus-Macy's.

Now that Washington County developer Millcraft Industries Inc. is giving the Lazarus-Macy's site new life as a $65 million residential-retail-office development known as Piatt Place, the city believes the Revco site could be used to provide a loading dock and additional access for Saks.

Millcraft, which has an option to purchase the Revco building from the URA, plans to demolish it, but it hasn't yet decided how it would use the property, said Lucas Piatt, vice president-real estate.

... Dick Skrinjar, a spokesman for Mayor Luke Ravenstahl, said the mayor is interested in working with "all parties" to help Saks prosper.

Now just hold on. Didn't Millcraft have to submit some kind of plan for the properties in question? Why in the world would the city have given the Piatts an option on the building if they didn't have a proposed use? I can think of one reason not to do that. Like maybe the city would come up with a use for it but not have control to do anything about it.

So now, rather than just giving or selling the property to Saks, the mayor has to work with "all parties" to get the deal done?

I bet that the Piatts are interested in keeping Saks around. They made rumblings a while back about government subsidies to attract Nordstrom downtown, after all. So why not just keep Saks there? They seem to want to do that:

"We'd be happy to work with Saks," Piatt said. "It's a great possibility for them to expand their space, or even to have a Fifth Avenue entrance to their store."

But what would it mean for the Piatts to "work with Saks"? Does that mean they could milk this situation for even more support? Maybe, maybe not. Anyone know? Either way, doesn't this seem like a strange arrangement? Until a very short while ago, it appeared that the URA controlled this property. Now it appears that they don't. At least not entirely.

Is that so?

Road=Development? An Experiment in Economics

This is going to drive some people bonkers. It's headlined "Rt. 43 could be road to new jobs:"

As the first drivers roll down a new $75 million stretch of White Marsh Boulevard today, they will wind through one of the few large undeveloped commercial tracts on the East Coast accessible to Interstate 95. They will head toward a place that once provided a living for tens of thousands of workers but fell on hard times.

More than two decades in the works, the new Maryland Route 43 will open today with high expectations - and even a parade.

"In the last 10 years I can't think of any one project that was comparable to this with the new road and the new industrial opportunities," said Daraius Irani, director of applied economics at RESI, Towson University's research and consulting arm.

"It's been called the road to opportunity, because it's not for transportation," said Baltimore County Executive James T. Smith Jr. "It's for jobs."

What kind of place is this? Might sound familiar:

In the 1940s and '50s, thousands of young families were drawn to the Middle River and Essex areas by well-paying industrial jobs. But advances in technology and a changing global market rendered many of those jobs obsolete.

During World War II, the Glenn L. Martin Corp. employed more than 50,000 workers. Today, 1,200 people work at the company's offshoots, Lockheed Martin and Middle River Aircraft Systems, according to Fronda Cohen, the county's marketing director.

Likewise, Mittal Steel, the descendant of Bethlehem Steel, employs fewer than one-tenth of the workers it did during peak years, she said. For decades, the southeastern part of the county stagnated, plagued by a shortage of jobs, an excess of rundown apartment buildings and an increase in crime.

Then a transformation began in the Middle River area. Shoddily built apartment complexes were torn down and replaced with elegant homes. Developers began changing the image of the waterfront, from a place to sip a beer and drop a line, to a place to drop anchor - for a yacht.

Along the way, ideas came and went for a large spread of undeveloped land. The A.V. Williams tract, as it was known, was seen by some to be a good spot for an Asian theme park. Others pictured a NASCAR raceway there.

Lots of parallels to Pittsburgh here. Questions of class and economics. Questions of roads and development. Urban cores versus suburbs. Old industry versus new technology.

Have at it.

New Urbanism in Pittsburgh

In this article's telling, Lawrenceville is becoming a haven for New Urbanists. Which seems like good news.

"I moved here to live above my space," said Ms. Desko of her studio. She intends to use it as a dance studio, a performance space, and a place for events such as wine tastings and classes. "It's so like New York."

That's an interesting way to put it. We've been having a long conversation here about what cities might offer a good model for Pittsburgh. Or at least a point of comparison. New York? San Fran? Cleveland? (Scroll down. And down. And down.)

So is Lawrenceville like New York? In a lot of ways, if you are looking at demographics and numbers, etc., the answer is "no." Which is going to be true of any comparison you try to make. But you can see what Ms. Desko is getting at. For her, Lawrenceville is like a "Pittsburgh version" of New York.

I think it's a good thing that the neighborhoods are filling up like this. And I think it's really great that people like Linda Metropulos and Becky Burdick are taking risks in places like Lawrenceville. I might add that they are working hard to make some of the housing affordable.

But isn't it supposed to be impossible to do piecemeal redevelopment?  Here's Mayor Murphy on that topic in 2004:

"We believe -- and every person we have talked to, every developer, has been clear -- that the value is in doing it holistically, comprehensively, not in a piecemeal way," Murphy said. "If we begin to sell the buildings off, then we move away from doing what I think would be attractive development."

And doesn't affordable housing require even more subsidies? It seems to in the case of the current downtown plan:

Perhaps the biggest unfulfilled need Downtown is for more moderately priced housing. Ms. Burk said studies have found a very high demand for such housing Downtown. The CMU study found that young professionals are willing to pay $900 to $1,100 a month to live Downtown.

As a result, a group of business, civic, political and foundation officials have begun meeting to try to find ways to entice developers to build more moderately priced "workforce" housing.

...Without incentives, developers tend to gravitate toward building more expensive units Downtown because it is the only way they can make money.

Ms. Burk said the Working Group on Downtown Housing is looking at the possibility of tax abatements or other incentives to interest developers in building more affordable housing.

Strange, no?

I am not saying that what's going on in Lawrenceville and other neighborhoods is happening in a completely free market. But it does appear to be operating without the massive, overpowering presence that the URA has downtown.

Either way, what's going on in Lawrenceville seems to already be attracting empty-nesters and young professionals and artists. So remind me again: Why are we paying PNC and the Piatts millions and millions of dollars to provide housing for empty-nesters and young professionals and artists? Why did we buy swaths of properties and let them sit empty for a decade while waiting for such saviors to arrive?

Search me.

Props to the Post-Gazette, and AntiRust's Endorsement for Governor (of Texas)

You guys reading Early Returns in the Post-Gazette? Should be. It's the daily political blog. Lots of info. And attitude. It's where I saw this shocker:

If only Rick's "Lord of the Rings" speech hadn't gained traction this week, the quote of the week would have gone to Ed Rendell, who was talking about our boring, useless seniors and the joy that slot machines will undoubtedly bring to their lives:

"These are people who lead very gray lives. They don't see their sons and daughters very much. They don't have much social interaction. There's not a whole lot of good things that happen in their month. But if you put them on the bus they're excited. They're happy. They have fun. They see bright lights. They hear music. They pull that slot machine and with each pull they think they have a chance to win ... It's unbelievable what brightness and cheer it brings to older Pennsylvanians."

Wow. Did he really say that stuff?

Is there still time to move to Texas? I want to vote for Kinky Friedman. Check out this top-shelf profile in the Weekly Standard.

Seriously. I would vote for him. In a heartbeat. And not as a joke or protest vote. I think he's right about a lot of stuff.

Transfats, Tobacco and Good Ole' Uncle Milton

Andrew Sullivan has chosen a quote for the day. I suppose it is lazy of me to take it as my own quote for the day. But it's a really great quote. So, you know, read it.

"The maintenance of a free society is a very difficult and complicated thing. And it requires a self-denying ordinance of the most extreme kind. It requires a willingness to put up with temporary evils on the basis of the subtle and sophisticated understanding that if you step in to try to do them, you not only may make them ... worse, but you will spread your tentacles and get bad results elsewhere ...

The argument for collectivism, for government doing something is simple. Anybody can understand it. If there's something wrong, pass a law. If somebody is in trouble, get Mr. X to help him out. The argument for a free - for voluntary cooperation, for a free market is not nearly so simple. It says, you know, if you allow people to cooperate voluntarily and don't interfere with them, indirectly through the operation of the market, they will improve matters more than you can improve it directly by appointing somebody. That's a subtle argument, and it's hard for people to understand," - Milton Friedman, back in 1975.

Half the restaurants in NYC have already eliminated transfats. And almost 200 restaurants in the Pittsburgh area have already gone smoke-free voluntarily. Mr. Friedman was not talking about these things directly of course. He was more concerned with Social Security and the minimum wage in the interview. I have no idea where he stands on public health issues. But I do think his words are worth considering.

And looking through the interview, I think I would add this to the discussion:

Friedman: The do-good reformers who have sold these programs to the American people, telling them things that they knew were not true. ... One of the things that always shocks me is how people whom I would trust -­ maybe not with my wife, but certainly with my pocketbook -- in their private capacity whom I would never question the integrity of, will in their public capacity, because they believe it's in the best interest of other people -- lie to the American people.

Sound familiar? Does to me.

I believe that children are the future...

At least in England, where a few stiff upper lips are refusing to comply with school bans on junk food.

Five months after the celebrity chef Jamie Oliver succeeded in cajoling, threatening and shaming the British government into banning junk food from its school cafeterias, many schools are learning that you can lead a child to a healthy lunch, but you can’t make him eat.

The fancy new menu at the Rawmarsh School here?

“It’s rubbish,” said Andreas Petrou, an 11th grader. Instead, en route to school recently, he was enjoying a north of England specialty known as a chip butty: a French-fries-and-butter sandwich doused in vinegar.

“We didn’t get a choice,” he said of the school food. “They just told us we were having it.”

Now, I am all for healthy eating, I suppose. But you know, one of the really grand things about being 16 is being able to suck down french-fry sandwiches with nary a consequence. In fact, there are a lot things you can do as a young person that you cannot do as an adult. And vice versa. Whatever happened to reason? Moderation?

Seems to be lacking in a lot of debates. Take this one, for instance. Seems like the school lunches are going over a lot better in some places:

Schools that have tried to win students over appear to have fared better than those that impose bans, Professor Morgan said.

The Royal Docks Community School, a high school in Newham, south London, is one example. The school began gradually introducing menu changes last year, consulting parents, students and the local school district.

Within six weeks, said the head teacher, Sean McGrath, the cooks had reduced the use of cooking fat by 75 percent.

Imagine that.

Of course, not everyone is happy with that approach, either. Our hero with the french-fry sandwich has other ideas:

But here in Rotherham, Andreas Petrou insists that no amount of explaining will convince him that a French fry sandwich is not a decent meal. If confronted with the school food, he said, he will do what all his friends do: gather as much bread as he can, “put half an inch of butter on each slice,” and call it lunch.

Excellent.