By Jason Fincke, Executive Director
Builders Guild of Western Pennsylvania, Inc.

Nothing comes easy when it comes to development. After months of heated discussion and controversy, no sooner is the ink finally dry on one community benefits agreement, when talk of another is in the news.

On May 20, 2008, the City of Pittsburgh Planning Commission approved the request of Continental Real Estate to build a 178-room, three-star Hyatt Place Hotel next to PNC Park on Pittsburgh’s North Shore. The approval reportedly came despite a request by Pittsburgh United, an alliance of local community, faith and labor organizations, to delay approval pending an investigation into the development agreement surrounding the property and the negotiation of a community benefits agreement, among other matters. Such concerns should not be dismissed out of hand.

In fact, the intense scrutiny and approval process that is necessary today to construct any large development and construction project in an urban area is understandable and probably “comes with the territory” for most developers and owners. After all, there is a reason Rome was not built in a day. But the level of scrutiny and approval process seems to be becoming more and more intense in Pittsburgh, which doesn’t necessarily bode well for area contractors and building trade workers.

Ed Fasulo is the senior vice president and general manager of the Majestic Star Casino, the 400,000 square foot complex under construction on Pittsburgh’s North Shore that will employ hundreds upon hundreds of local workers both during and after its construction. When asked how Pittsburgh compares with other cities when it comes to getting the necessary approvals to get construction off the ground, he’s not hesitant to tell you that Pittsburgh is difficult.

In addition to planning commissions and zoning boards, owners and developers who wish to construct new facilities in Pittsburgh are faced with appeasing a myriad of other special interests, including organized task forces and community groups. That’s not to say that the delay in the projected opening of the Majestic Star is solely the result of the community review process, but it is an issue. The review and, more importantly, approval process that local developers and organizations are being required to go through can be extremely time consuming and onerous, and the more drawn out the process takes, the more expensive or, worse, less likely development will occur. Owners, developers and contractors are not going to be eager to become involved in local projects if every design, construction and operational issue has to be scrutinized and approved before proceeding.

When it comes to the new hockey arena, ground can’t be broken soon enough. After an intense design review process and lengthy negotiations on a community benefits agreement, the multimillion dollar project is finally getting off the drawing boards and into construction that will once again provide meaningful employment for hundreds upon hundreds of local workers. Only time will truly tell how much additional cost has been added to the project as a result of the review and approval process.

Now comes the announcement of a new $27 million Hyatt Place Hotel across North Shore Drive from the Equitable Resources Building. No sooner is the announcement made when the call for a community benefits agreement once again surfaces. The question is, how far can such demands go before developers tire of wanting to do business in Pittsburgh and move their plans to other cities, other states?

Community benefits agreements are not uncommon in publicly funded projects and, as the name implies, they can bring significant benefits to a community. And while Webster’s defines community as a social group of any size whose members reside in a specific locality, share government, and often have a common cultural and historical heritage, it may be prudent to be a little more liberal in how we are defining community.

The City of Pittsburgh, Allegheny County and even metropolitan Pittsburgh are communities, and in trying to attract developers and employers to our region, it may be wise to look at community benefits agreements from such a wider perspective, rather than from the view of a single neighborhood.

That is not to say that the local neighborhood that will be forced to bear the impact of a new facility, both good and bad, should not be given special consideration, particularly when it comes to the aesthetic design and traffic impacts resulting from its construction. No one wants an eyesore built in their backyard and development should be closely coordinated with the wishes of the community. But any good developer also knows that their success and the success of their eventual tenants depend on having good relations with their customers, most if not all of whom will reside in the general community of the facility being constructed. No developer worth their weight in salt wants to build where they are not wanted. It is too time consuming and too costly.

That’s why we need to be careful to create an environment where developers want to conduct business. They should be encouraged to work with the community on issues that benefit both the developer and area residents. It should not be one sided where we expect and even demand concessions that are outside the realm of reasonableness and good business. To do so, may result in a hurdle that’s just too high for any development at all.

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