PITTSBURGH | Development Rundown II

[JVC]

anyone else getting the feeling that walnut capital has put the proposed penn-highland building in east liberty on hold?

"If the project is approved by the planning commission, Walnut expects to start demolition of the four existing buildings in December."

http://www.post-gazette.com/business...s/201411180068

it's march and there's no sign of demolition at the east liberty site, only signs they are now focused on building apartments on second avenue

http://www.post-gazette.com/business...s/201502100198

one reason for the delay could be resolving the historic preservation issues associated with the three classic facades on penn avenue.
another possible reason could be their hopes of instant gentrification were dashed when the dollar tree opened across the street,
not that there's anything wrong with dollar tree but it's not the kind of tenant you'd find at bakery square

http://www.bizjournals.com/pittsburg...t-liberty.html

[BrianTH]

In my experience, the vast, vast majority of times a project gets delayed, it is because of some sort of financing issue.

But if they had to change their demolition plans over a change in historic preservation strategy, that would be great.

Edit: By the way, Dollar Tree and its ilk actually have a pretty diverse customer base in terms of income:

http://www.nytimes.com/2011/08/21/ma...anted=all&_r=0

As detailed in that article, they are basically a sort of Target competitor--and I think being a place where you can find both upscale restaurants AND a Target-type store is more or less exactly the appeal of East Liberty these days.

[Austinlee]

Design for new U.S. Steel headquarters honors Pittsburgh’s industrial past
March 3, 2015 12:00 AM
http://www.post-gazette.com/local/ci...s/201503030096

By Mark Belko / Pittsburgh Post-Gazette
The new U.S. Steel headquarters is designed to pay homage to the steelmaker while serving as a catalyst for development of the former Civic Arena site in the lower Hill District.

Those goals are contained in a final land development plan filed with the city Friday by developer Clayco Realty Group in anticipation of starting construction of the five-story, 285,000-square-foot building by early fall.

[Private Dick]

Originally Posted by JVC

another possible reason could be their hopes of instant gentrification were dashed when the dollar tree opened across the street,
not that there's anything wrong with dollar tree but it's not the kind of tenant you'd find at bakery square

Actually, let me correct something... there is EVERYTHING wrong with Dollar Tree.

[Evergrey]

Originally Posted by Austinlee

Design for new U.S. Steel headquarters honors Pittsburgh’s industrial past
March 3, 2015 12:00 AM

sure it does

...

http://www.bizjournals.com/pittsburg...number-of.html

Revisions to Almono plan could doubled number of residential units

Mar 3, 2015, 7:49am EST

Look for the Almono master plan in Hazelwood to get a lot denser with residential development.

That's a key component in planning being conducted by Perkins + Will, a design firm recently engaged by the Regional Industrial Development Corporation of Southwestern Pennsylvania, which is leading the redevelopment of the 178-acre brownfield site in Hazelwood.

Don Smith, president of RIDC, said his organization is looking at the potential of doubling the number of residential units at the Almono site, originally proposed at 1,320 units when Strip District-based Rothschild Doyno Collaborative conducted its master plan for the site.

"We're trying to get the density that makes certain things work," he said.

More people living on the site, he explained, will help drive the potential for better transportation options and neighborhood-serving retail, achieving greater sustainability goals for the redevelopment as a whole.

He said the new proposals by Perkins + Will are largely building on the established master plan and that the amount of land to be used for housing won't change much.

That means pursuing five-, six- and seven-story residential buildings instead of the three- and four-story buildings originally proposed in a revision Smith said shouldn't change any of the established public entitlements.


...

[Brentsters]

A tale of two developments.

[Evergrey]

Originally Posted by Private Dick

Actually, let me correct something... there is EVERYTHING wrong with Dollar Tree.

Agreed... the location of a Dollar Tree there is a negative indicator for that central part of Penn Avenue in East Liberty's "Downtown"... which remains a weird twilight zone despite the transformation of much of its cross-street Highland.

I think that section of Penn is partly hampered because it exists as only a couple blocks of east-west urban fabric before getting obliterated to the east by suburban highway type development... and to the west by a creepy no-man's land.

[Minivan Werner]

The new renderings of the US Steel HQ look better than the first ones although the differences are slight. It's still at least 5 floors too short.

[BrianTH]

Wow--lots of anxiety over what is basically just an efficient convenience store.

From the article I linked:

And while it’s true that low-wage earners still make up the core of dollar-store customers (42 percent earn $30,000 or less), what has turned this sector into a nearly recession-proof corner of the economy is a new customer base. “What’s driving the growth,” says James Russo, a vice president with the Nielsen Company, a consumer survey firm, “is affluent households.” . . .

Rick Dreiling, the chief executive of Dollar General, the largest chain, with more than 9,500 stores, calls this idea the New Consumerism. “Savings is fashionable again,” Dreiling told me. “A gallon of Clorox bleach, say, is $1.44 at a drugstore or $1.24 at a grocery store, and you pay a buck for it at the Dollar General. . . . Dreiling says that much of Dollar General’s growth is generated by what he calls “fill-in trips” ­— increasingly made by wealthier people. Why linger in the canyons of Wal-Mart or Target when you can pop into a dollar store? Dreiling says that 22 percent of his customers make more than $70,000 a year and added, “That 22 percent is our fastest-growing segment.” . . .

I called JC Sales, one of the big warehouse suppliers of independent dollar stores located south of Los Angeles, and talked to Wally Lee, director of marketing and technology. He agreed there was little room for error now. If I wanted to open a dollar store, I asked him, where would he suggest I locate it? “Right next to a Wal-Mart or a Target,” he said.

[BrianTH]

Originally Posted by Minivan Werner

The new renderings of the US Steel HQ look better than the first ones although the differences are slight. It's still at least 5 floors too short.

Yep.

[JVC]

Originally Posted by Private Dick

Actually, let me correct something... there is EVERYTHING wrong with Dollar Tree.

Originally Posted by Evergrey

Agreed... the location of a Dollar Tree there is a negative indicator for that central part of Penn Avenue in East Liberty's "Downtown"

the honesty here is refreshing - totally opposite from the city-data board

it's safe to say most young urban professionals in pittsburgh, the intended market for the new penn-highland building,
rank dollar tree near the bottom on the social status and desirability scale

Originally Posted by BrianTH

Wow--lots of anxiety over what is basically just an efficient convenience store.

perception is everything. the contents of the dollar tree and the target could be identical and people would still judge them differently

[GeneW]

Revisions to Almono plan could double number of residential units (ht)

[BrianTH]

Lots more:

http://www2.deloitte.com/content/dam...ies-092512.pdf

The recent recession and post-recessionary shopping habits have made dollar stores a frequent channel for more consumers—of all incomes. Dollar stores appeal to primarily low- and fixed-income consumers; however, a growing segment of shoppers are high-income consumers as the stigma of dollar stores seems to be waning. Across consumer segments, dollar-store shopping trips appear to be expanding from merely a fill-in or occasional targeted purchase to a grocery or mass merchandise substitute. . . .

For relatively affluent consumers—like the typical reader of this research—it likely has been years since they last shopped at a multi-price-point dollar store. For those readers unaccustomed to today’s dollar stores, the category as a whole may exceed their expectations: many multi-price-point dollar stores have improved their offerings and customer experience in recent years.

http://www.dailyfinance.com/2012/01/...mong-the-rich/

Why Dollar Stores Are Hotter Than Ever (Even Among the Rich)

While it's no surprise these discount retailers gained popularity during the economic downturn, their rock-bottom prices aren't the only reason for their still growing appeal: Dollar store chains have undergone major makeovers in recent years, sprucing up their dingy digs and adding more compelling merchandise. "At the start of the recession, they decided they didn't want to be recession-dependent retailers, but that they would become mainstream," Dave Marcotte, senior vice president of market research and retail consultancy Kantar Retail, tells DailyFinance. The strategy appears to have paid off as the chains, which have long been patronized by the cash-strapped, have managed to capture more business from higher-income shoppers. . . .

Once synonymous with generic goods of dubious quality, dollar stores have made a big push in the past few years to upgrade their product mix with the addition of well-known brands -- from Tide laundry detergent to Kellogg's cereals. "The addition of national brands brings consistency to the merchandise mix and appeals to brand-conscious consumers," Deborah Weinswig, a retail analyst with Citi, tells DailyFinance. . . .

More consumers are forgoing massive shopping trips where they load up on household goods that will last them a month -- a shift that has been a boon for the dollar chains, Peter J. Keith, senior research analyst for hardline retail and consumer products for Piper Jaffray, tells DailyFinance. "In terms of the dollar store popularity, I would say the greatest reason is convenience," he says. "Consumers are now preferring to make smaller purchases on a more frequent, as needed basis. This type of shopping lends itself well to dollar stores where you can park right by the front door and get in and out in five minutes. Conversely, a trip to Walmart (WMT) might take 30 minutes with the large parking lot and large store to navigate."

http://www.mediapost.com/publication...#axzz2i4qRpltw

High Income Shoppers Do Dollar Stores

According to new research from Mintel, Dollar stores are popping up all over the US, but it’s not just discount shoppers taking advantage of these discount prices. . . .

78% of dollar store shoppers say that stores are conveniently located, thus making it easy for them to shop in this channel and 74% of dollar store shoppers think that dollar stores offer better prices than other retailers. However, convenience and price aren’t the only features driving consumers to these retail havens. 59% of respondents say these stores are pleasant to shop in, while 54% believe brands and products sold at dollar stores are just as good as other retailers. . . .

Men and women, aged 18-34, are more likely than those in other age groups to say they are shopping at dollar stores more often this year compared to last (33% of men and 31% of women versus 24% of all respondents). Ali Lipson concludes that “… younger consumers are an important group to target for dollar and discount stores… likely to be from lower-income households… may be students and others… starting out in their careers… “

[BrianTH]

Originally Posted by JVC

perception is everything. the contents of the dollar tree and the target could be identical and people would still judge them differently

That's not what all the market research I just posted says is actually going on.

[BrianTH]

And more!

http://www.bloomberg.com/bw/articles...-created-equal

[D]espite only selling $1 items, Dollar Tree attracts consumers who have higher incomes than its two “Dollar” rivals. The differences are evident in the Cardlytics data, which show how Dollar Tree customers are much more likely (compared with Family Dollar or Dollar General customers) to shop at higher-end grocery stores such as Trader Joe’s and Whole Foods Market . . . .

[JVC]

Originally Posted by BrianTH

That's not what all the market research I just posted says is actually going on.

the links and your ability to access them quickly are impressive

keep in mind pittsburgh is different from the rest of the country, especially in terms of diversity

http://www.post-gazette.com/opinion/...s/201411160101

i bet if someone conducted an informal poll here they would find that mid to high income consumers in pittsburgh have a generally unfavorable perception of dollar stores

thanks again for the research

[BrianTH]

Those are very exciting statements about the ALMONO site's residential plans, and it complements what is going on recently in the South Side Works, Station Square, and PTC (and maybe Carrie Furnace down the road).

[Austinlee]

Originally Posted by BrianTH

And more!

http://www.bloomberg.com/bw/articles...-created-equal

That's probably because Dollar Tree is much cleaner than their two rivals. You can tell even from driving past the exteriors. The difference is stark.

[BrianTH]

Originally Posted by JVC

keep in mind pittsburgh is different from the rest of the country, especially in terms of diversity

It is true we have far fewer Hispanic-heritage people than U.S. metro averages. That is pretty much entirely true because the Steel Bust and subsequent economic and population doldrums coincided with the great job-seeking Hispanic immigration wave, combined with the fact that immigrants tend to go where other immigrants from the same country or region already have located, such that once you fall behind in an immigration wave you are likely to fall even more rapidly behind as it continues.

So I don't think that has anything to do with whether higher-income people living in the East End of Pittsburgh are more or less willing than higher-income urbanites in other cities to look for low prices and convenience when shopping for basic commodity goods. And in fact I think the roaring success of stores like the Home Depot and Target have proven that East Liberty in particular is a place where plenty of higher-income and lower-income East Enders will willingly shop together.

In that sense I think Dollar Tree knows exactly what it is doing--I doubt there are many possible locations more attractive than East Liberty given their mixed-income expansion strategy as explained in those articles.

i bet if someone conducted an informal poll here they would find that mid to high income consumers in pittsburgh have a generally unfavorable perception of dollar stores

I have no idea, but I bet if you polled people in the Pittsburgh region, or maybe even just the City, a majority would report that East Liberty is still a gang-infested war zone where you have to dodge bullets just to get to your crack dealer on the corner.

And that is because many people are ignorant idiots who never leave their personal bubbles, never change opinions they formed 30 years ago, and have no idea how much things are changing in various neighborhoods.

However, Home Depot, Whole Foods, Trader Joe's, Target, Walnut Capital, Ace Hotel, Hotel Indigo, and so on don't need a majority of the City or the region to be participants in their markets. They just need enough people to fill their stores, apartments, rooms, and so on. And over and over again, East Liberty has proven that there are enough people around the East End specifically for that purpose.

[BrianTH]

Originally Posted by Austinlee

That's probably because Dollar Tree is much cleaner than their two rivals. You can tell even from driving past the exteriors. The difference is stark.

Yep, they seem to have been aggressive about creating a cleaner, nicer (albeit not fancy) brand image. Sort of Target to the other stores' Walmart.

However, I've also read before that Dollar Tree has a lot more urban/suburban locations and fewer rural locations than the other dollar store chains. That would naturally make their customers more like to cross-shop higher-end stores and such.

But all that fits together--Dollar Tree's apparent brand strategy goes along with their locational strategy, and in turn that makes them a pretty natural fit for East Liberty.