[Evergrey]

http://www.post-gazette.com/pg/06255/720995-28.stm

Private Sector: Pittsburgh's economy / Myths vs. realities
Tuesday, September 12, 2006

By Norman Robertson

The general perception of the Pittsburgh economy is one of stagnation, even decline. Despite a flurry of announcements regarding new large-scale construction projects in the local area, the outlook still appears to be viewed with a mixture of gloom and resignation regarding the inevitability of, at best, a lackluster economic performance.


The negative perceptions of the local economy do not, in our judgment, correspond to the facts. All too often, perceptions have been mistaken for realities. Thus, while growth in the Pittsburgh economy has been slow and has failed to match the national averages, this should not be construed as a sign that the local area is still struggling -- with only very limited success -- to recover from the loss of steel and other manufacturing jobs over the past 20 to 30 years.

Unfortunately, statistical data on the Pittsburgh economy is far from comprehensive and often out of date as well. But while the statistics that are available scarcely represent a complete picture of the Pittsburgh economy, they do not support the widely held view of Pittsburgh as a no-growth stagnant economic region. While lagging behind the nation as a whole, the economic indicators show that the local economy is appreciably stronger -- and more resilient -- than most of the downbeat assessments of economic conditions would imply.

Arguably, Pittsburgh, for all its well-documented problems, has fared as well -- or better -- than those areas of the country that in common with Pittsburgh were heavily dependent on manufacturing industries to sustain growth in employment and income.

Without minimizing the challenges that lie ahead -- particularly on the political front -- we believe that Pittsburgh has completed the painful, but necessary, transition from a predominantly manufacturing economy, namely steel, to one which is more diversified and increasingly oriented toward the fast growing service-producing industries.

While the local economy's ability to create new jobs is still limited -- and may well remain so -- we are encouraged by the steady gains in service-related jobs which, in our view, point to increased job opportunities over the coming years.

Moreover, the charts you see above -- notably those relating to income -- suggest that the local economy is a good deal healthier than the data on payroll employment alone might suggest. Without taking a Pollyannaish view of the outlook for Pittsburgh -- much will clearly depend on the national economy -- we believe that recent developments augur well for a narrowing of the gap between gains in economic activity at the national level and those in the local economy.

Norman Robertson is economic adviser for the Smithfield Trust Co. and former chief economist for Mellon Bank. This analysis first appeared in the "The Smithfield Forecast," a quarterly survey of economic and investment trends.

http://www.post-gazette.com/images4/20060912biz_charts.gif

[ColDayMan]

I never thought I'd see the day where Toledo and Pittsburgh were put into a statistical comparison.

Now I know America is going to hell.

[Paintballer1708]

Why does the Post-Gazette always compare Pittsburgh to Cleveland, Columbus, Cincinnati and other Ohio cities? You would think they would go on a national level and compare Pittsburgh to Detroit, Milwaukee, Baltimore, Cleveland, St. Louis and Minneapolis. Always found that interesting.

[Evergrey]

Why does the Post-Gazette always compare Pittsburgh to Cleveland, Columbus, Cincinnati and other Ohio cities? You would think they would go on a national level and compare Pittsburgh to Detroit, Milwaukee, Baltimore, Cleveland, St. Louis and Minneapolis. Always found that interesting.

It wasn't the Post-Gazette who was comparing Pittsburgh to Ohio cities... it was the Smithfield Trust Co. The reason Pittsburgh is compared to Ohio cities and Lexington, KY... is because these cities are all within the Fourth Federal Reserve District... which includes Western Pennsylvania, all of Ohio, Eastern Kentucky and the Northern Panhandle of West Virginia.

http://upload.wikimedia.org/wikipedia/commons/a/af/Federal_Reserve_Districts_Map.png

[Paintballer1708]

^Thanks for clearing that up.

[SteelCity15]

I never thought I'd see the day where Toledo and Pittsburgh were put into a statistical comparison.

Now I know America is going to hell.

ha. It's not worth it.

[SuperstarMark]

I'd agree that Pittsburgh's salary pay is not all that bad. I know many young professionals, in their mid-late 20s/early 30s, who are home owners in Pittsburgh - thanks to decent salaries and a good buyer's market here.

[architorture]

of course that buyers market means you are going to have a hell of a time selling that house or getting alot of value out of it later in this market

[SuperstarMark]

^ Regardless, the point is that young professionals here can afford to buy a house or condo. Take a poll on this website of this age bracket, and see how many rent. Many of my friends who are older than me and who live in larger cities -- say, mid-late 30s and live in Boston, NYC, LA, and Seattle -- are still waiting for their day to buy.

[Evergrey]

I would say it's both a "buyer's market" and a "seller's market"... Pittsburgh's housing prices have been extremely affordable in comparison to the rest of the country... so it is easy for most people to buy in... but Pittsburgh's housing market has also been showing stable growth (even quite hot in some areas) and has been named one of the least risky markets in the country since it wasn't distorted by the hyper housing bubble of the past decade... Pittsburgh area home-owners are gaining good value on their homes in recent years... just ask AaronClark of the South Side

Markets like Boston, Seattle, etc may have experienced skyrocketing housing values in recent years... and many people have made fortunes due to this phenomenon... but these overheated areas are also much more likely to lose value in the future than a stable (as opposed to stagnant) market like Pittsburgh.

[architorture]

come on now though... the south side is like a little mini bubble...or maybe better yet a mini-manhattan situation where it is quickly becoming too expensive to buy there...thus the slow take over of the slopes...

i think what is happening in lawrenceville in anticipation of the hospital is very similar...values are being ramped up more than what they really should be...

i'm not saying pittsburgh isn't a great place to live or an affordable one... but i think there are certainly places that are out of control in terms of prices and also places where you are going to struggle to sell your home for much of a gain if you aren't in it for too long...

ultimately a flat real estate market is 'okay' for everyone buyer and seller...

[asher519]

^ Regardless, the point is that young professionals here can afford to buy a house or condo. Take a poll on this website of this age bracket, and see how many rent. Many of my friends who are older than me and who live in larger cities -- say, mid-late 30s and live in Boston, NYC, LA, and Seattle -- are still waiting for their day to buy.

Agreed. Here in Portland, Ore., there's no chance in hell I could buy a condo, let alone a house, without moving a lot farther from downtown than I'm willing to do. And I'm 32, closing-in on the age bracket Mark mentions. If I can get a similar salary when I get to Pittsburgh next year--even a slight reduction, really, given the much lower cost of living--home ownership may just be in my future. :banana:

[Paintballer1708]

Does anyone have a list of the housing markets with the least risky market and the most risky? I know Pittsburgh and Cleveland make the list on the least risky and Detroit and Memphis made the top in the most, but i would like to see more cities on some bigger lists. Thanks to anyone who can find one.

[Wheelingman04]

That was a really good article. You can experience urban living at its finest in Pittsburgh without sacrificing your wallet.

[chipps]

Risky/least risky housing markets as of Aug 2005:

http://money.cnn.com/2005/08/03/real_estate/buying_selling/pmi_riskiest-markets/

[Evergrey]

I never got around to posting this article because it pretty much deals with the ugly sprawl areas of the metro that I loathe (like Peters Twp, ugh)... but I suppose overall it is good news for an metro that has struggled for so long...

http://www.post-gazette.com/pg/06253/720336-30.stm

It's warmer in Pittsburgh than elsewhere
As nation's housing market cools, region holds its own. Some parts are even 'hot'
Sunday, September 10, 2006

By Elwin Green, Pittsburgh Post-Gazette
For months now, the big news in housing has been bad news: Prices and sales are dropping, interest rates and inventory are rising. Pundits and prognosticators joust over whether the slowdown should be described as a "bust" or a "soft landing."

Either way, Mary Eve Kearns, an agent in the Peters office of Howard Hanna, will hear none of it.

Local home sales through June, the most recent period for which figures are available, were up slightly from a year ago in the seven counties that make up the Pittsburgh metropolitan statistical area, and prices were up nearly 6 percent on average, according to the West Penn Multi List, which tracks area sales. In the territory served by Ms. Kearns' office, a broad suburban corridor that runs from Bethel Park and South Fayette down to Washington, Pa., things are even better.

"This whole area is total growth," she said.

The southwestern suburbs make up one of three areas that continue to lead the region in both new construction and new buyers. North of the city, Cranberry, Adams and Mars have been experiencing steady growth. And to the southeast, new developments in North Huntingdon swell the ranks of commuters along the Route 30 corridor.

In Peters, township building inspector William Muzzey said housing starts increased "almost every year" for five years before pulling back this year. But even with the pullback, sales are up for Ms. Kearns and her colleagues.

Office manager Chris Popko said that year-to-date sales are running 18 percent ahead of last year, which was itself a record year. Some homes, such as a four-bedroom Cape Cod in nearby Nottingham that Ms. Kearns had listed at $329,900, have sold in as little as three days.

Ms. Kearns said two groups of buyers are driving the growth. In the first group are professionals relocating from the New York/northern New Jersey area. These immigrants to Pittsburgh are typically dual-income families who discover that "if they live here, they don't have to be dual-income."

The second group consists of returning expatriates, especially entrepreneurs who have made their money in places such as Florida and California.

"They've said you have to leave Pittsburgh in order to appreciate it," Ms. Kearns said.

And part of what they appreciate is that, upon returning from overheated housing markets, Pittsburgh homes seem positively cheap. The median price for homes in the Pittsburgh metropolitan area in the April-June quarter was $120,300, about a fifth of the Los Angeles median price of $576,300.

"I've actually had people say to me, 'Do you mind if we pay cash?' " Ms. Kearns said, laughing.

Mary Ann Brettell, an agent in Howard Hanna's Cranberry office, said that homes in the northern suburbs are remaining on the market 20 to 30 days longer than they did last year, but still selling at a nice pace, especially in the township next door.

"Adams Township has been very hot," Ms. Brettell said.

Adams building inspector Gary Peaco confirms that evaluation.

"Last year was probably the second highest year in the last 10 years" for new construction, he said, "and I'm on pace to match that this year."

In 2005, Mr. Peaco's office issued permits for 240 new housing units, well above the average of 210 to 220 a year. As of July of this year, 154 permits had been issued.

He credits the growth primarily to buyers continuing to seek relief from Allegheny C ounty taxes. Butler County's tax rate of 27.5 mills is much higher than Allegheny County's 4.69 mills, but residents there can have smaller tax bills for two reasons: First, property assessments are based on 1969 market values; and second, taxes are calculated at 75 percent of assessed value rather than full assessed value.

For example, a $500,000 home in Allegheny County would be assessed at $500,000, and would generate a county tax bill of $2,345 -- 4.29 times $500 (1 mill equals $1 for every $1,000, so 4.29 mills would be $4.29 for every $1,000). In Butler County, that same home, assessed as if had been built in 1969, might have a market value of $60,000, and an assessment of $45,000, said Butler County director of property and revenue Ed Rupert.

Based on that assessment, the resulting county tax bill would be $1,238.

With an estimated 28,000 residents, Cranberry is "starting to get full," Mr. Peaco said, so Adams, which still has land available for development, has become the logical next choice for developers and buyers.

Both Mr. Peaco and Ms. Brettell said that the completion of the new Pennsylvania Turnpike/Interstate 79 interchange has also helped.

Homes in the area are not cheap, with townhouses running $250,000 to $300,000, and the average single-family home being priced between $500,000 and $600,000. But rather than deterring buyers, the luxury homes are attracting those who are moving up from smaller homes. Ms. Bettrell said those make up about half of her buyers these days; the other half are people relocating from other cities.

Even rising interest rates aren't damaging all home sales. Ms. Brettell said that while interest rate increases have helped to slow sales in the $300,000 to $600,000 range, they have had the opposite effect on sales of homes priced at more than $600,000.

"It doesn't affect the high-end buyers as much," she said. "If anything, it spurs them to move before it goes higher."

Just across the southeastern border of Allegheny County, North Huntingdon, long a steady grower, continues to expand.

Township senior planner Ryan Fonzi said that in the first sixth months of this year, 91 permits were issued for single-family homes, setting a pace that if sustained would result in an 10 percent increase over last year's total of 168. By contrast, North Huntingdon added about 110 houses per year in the decade prior to 2005.

That would pretty well match the pace of activity at the North Huntingdon office of Coldwell Banker, said George Hackett, president of the realty giant's 15 Pittsburgh-area offices. Last year, the office listed 285 homes and closed 330 sales; it is now on track to list 310 homes this year, and Mr. Hackett projected a 5 to 6 percent increase in sales.

The increase is not just in the number of units listed or sold. Tracey Downs, an agent at Coldwell Banker's North Huntingdon office, said that in the past year average prices for new homes in the area have risen from the $150,000 to $200,000 range to the $225,000 to $250,000 range. And some of the newer developments feature homes priced upward of $350,000.

"That just seems to be the trend in the new construction," she said. "It's just getting bigger and bigger."

Mr. Hackett doesn't anticipate a slowdown any time soon.

"I think that is going to be a growth area in the future," he said. "It still has a lot of land out there. There are developers that are interested in building out there because it's still close to everything."

The spokes of Route 30 and the Parkway East do indeed make for an easy commute to many destinations. But North Huntingdon, like Peters, Cranberry and Adams, is just beyond the Allegheny County line, a point not lost on buyers.

"Taxes are something that's always on the front burner," Mr. Hackett said.

Like Butler County, Westmoreland County has a higher tax rate than Allegheny County, but calculates taxes based on a smaller assessment. The tax rate is 20.99 mills, but properties are assessed at 20.5 percent of their market value. So the county tax bill for a $500,000 house there would be $2,151 -- not nearly as low as Butler County's, but still lower than Allegheny County's.

Of course, the hodgepodge of municipalities surrounding Pittsburgh means that home buyers need to factor in a range of municipal and school taxes when deciding where to live. But apparently more and more are deciding that the total tax burden is less painful outside Allegheny County than inside.

Compared with sections of New York, Los Angeles and Miami that saw prices double or even triple during the five-year real estate boom (or bubble -- take your pick), even Pittsburgh's hot spots are experiencing moderate growth. But that makes the region less susceptible to dramatic downturns as well -- including the current reversal that has sellers in those cities offering discounts and perks. Time and again, real estate professionals characterize the local market as "stable."

That term would hardly describe the housing picture being drawn by national statistics. In its latest monthly report, the U.S. Department of Commerce said new home sales in July were at a seasonally adjusted annual rate of 1.07 million, down 21.6 percent from a year ago. The national median sales price of $230,000 was virtually unchanged from last July's $229,200, and the inventory of homes on the market, 568,000, represented a 6 1/2 month supply, up 54.8 percent from a year ago.

With such figures dominating national news and commentary, perhaps it is no wonder that Ms. Kearns says that the biggest challenge she faces while having her best year in 16 years as an agent, is "overcoming the negative media, especially the morning news shows."

COUNTY HOMES SOLD % CHANGE DOLLAR VALUE
(IN MILLIONS)
% CHANGE
Allegheny 12,920 +1.88% 1,022.2 +2.41
Armstrong 261 +40.32% 15.26 +36.94
Beaver 1,281 -4.62% 90.29 +4.58
Butler 1,679 -4.17% 207.46 +1.27
Fayette 124 -8.82% 8.42 +32.63
Washington 1,781 +1.14% 159.46 +4.20
Westmoreland 2,505 -3.43 238.95 +2.70
TOTAL 20,551 +0.47 1,742.54 +5.87

Note: Numbers are through June 30, and percent change is from the same period in 2005.


--------------------------------------------------------------------------------

(Elwin Green can be reached at egreen@post-gazette.com or 412-263-1969.)

[Evergrey]

by the way... The Economist has an article on Pittsburgh in this week's edition


PITTSBURGH
How Now Brown Town?

This is all that's available online

http://www.economist.com/world/na/displaystory.cfm?story_id=E1_SJTQJVD

The state of Pittsburgh
Sep 14th 2006
From The Economist print edition

A FEW years ago, the Pittsburgh region was so desperate to hang on to its brightest young people that its boosters thought about running television ads featuring Border Guard Bob, a patrolman who would have stopped youngsters on their way out of town and urged them to stay. Wisely, the boosters scrapped that idea. And increasingly it seems as though the worries were misplaced anyway.…

[themaguffin]

Yeah I saw a link to this article but was bummed out that there was really no article... but it the kind of thing that some city booster site will likely post soon. I hate seeing these two sentence things though. They should post the article on their site or not at all.

[SuperstarMark]

Edited for deletion.

[Evergrey]

Here's the famous Economist article... courtesy http://www.iheartpgh.com ... nice to see one of these magazines actually dig a little deeper into the statistics

Pittsburgh
How now brown town?
Sep 14th 2006 | PITTSBURGH
From The Economist print edition

A former steel city is now proclaiming its cleaner land and clever minds

A FEW years ago, the Pittsburgh region was so desperate to hang on to its brightest young people that its boosters thought about running television ads featuring “Border Guard Bob”, a patrolman who would have stopped youngsters on their way out of town and urged them to stay. Wisely, the boosters scrapped that idea. And increasingly it seems as though the worries were misplaced anyway. Many of the graduates from Pittsburgh’s 34 universities—led by Carnegie Mellon and the University of Pittsburgh—do stick around, and some of them are finding work in cutting-edge scientific fields. A couple of decades after the collapse of the local steel industry prompted many Pittsburghers to flee, the city has a rosier future.

Pittsburgh will not experience an explosion of population and investment, like the booming cities of America’s south-west. But it is part of a pleasant and affordable region with an improving mix of industries and enviable demographics—which is as much as many parts of the country can hope for. And besides shaping young minds, Pittsburgh is also doing its best to reshape old land, by cleaning up former mining and industrial sites for uses that suit the modern economy.

One place where these two trends converge is in the SouthSide Works development, a 34-acre (14-hectare) collection of shops, offices and living space being built on the site of an old LTV steel plant on the Monongahela river. The idea, which is popular in many other American cities, is to try to create an area close to the centre of town where young professionals can live and play, as well as work. That might improve Pittsburgh’s appeal to creative or knowledge-intensive workers—and those who employ them.

The SouthSide Works aside, however, plenty of clever young people already seem to be staying. Although the region’s overall education levels are not that impressive, says Chris Briem, an economist at the University of Pittsburgh, those figures are partly skewed by its high ratio of elderly residents. Among Pittsburghers 25-34 years old, by contrast, 41.9% have graduated from university, placing the city among America’s top ten. More than 17% of those young people have also earned an additional graduate or professional degree: the fourth-highest share in the country, behind only Washington, DC (think lawyers), Boston and San Francisco.

Much of Pittsburgh’s drive to clean up brownfield sites is more mundane than SouthSide Works, or the engineering and biotech labs in the city’s universities. But it is nonetheless useful in updating and rounding out the local economy. The city has plenty of land near the airport, for example, that will soon be accessible on a new highway spur connected to the interstate system. That could be appealing to companies looking for new places to put distribution centres—a crucial bit of America’s logistics-driven economy. Some of this land is undercut by old mines, so the government is blasting the mines open, filling areas back in and then flattening them out.

These efforts have a clear logic to them. Pittsburgh is within one day’s drive, or a short flight, of the whole eastern seaboard, which accounts for more than half of America’s retail sales. But it has lower costs than the big coastal cities. Its potential appeal as a logistics hub thus gives it a fighting chance of attracting the sort of distribution investments that have helped such cities as Louisville, Kentucky and Memphis, Tennessee, though on a smaller scale. A few thousand such jobs would help many locals with moderate levels of education. The city is already showing off a sprawling distribution facility for Dick’s Sporting Goods, a big retailing chain.

As Pittsburgh upgrades its local economy, it will increasingly have demography on its side. Because so many prime-age workers moved away in the early 1980s—often taking children with them—it now has lots of old folk. At the last census, in 2000, 15.6% of Pennsylvania’s population was over 64 years old—second only to Florida—and the Pittsburgh region is older than the rest of the state. But now the Grim Reaper will even things out. Over the next quarter-century, however, the Census Bureau expects Pennsylvania’s over-64 population to grow by only 50%, the smallest increase of the 50 states. The national elderly population will grow more than twice as quickly, while that of currently vibrant states in America’s south-west will explode. When today’s most glamorous regions begin to face that brutal arithmetic, many of today’s young Pittsburghers may be glad they stayed put.

[Evergrey]

and just a little something i really liked from today's Post-Gazette Morning File concerning the Economist article:

Contrasting Pittsburghs
From a New York Times story on Pittsburgh's new mayor, Sept. 9:

"Mr. Ravenstahl is a young man taking over an old steel town that has lost all its mills, nearly half its population and much of its downtown commercial district in the last several decades."

The (London) Economist, Sept. 14:

"A couple of decades after the collapse of the steel industry prompted many Pittsburghers to flee, the city has a rosier future. Pittsburgh will not experience an explosion of population and investment, like the booming cities of America's southwest. But it is part of a pleasant and affordable region with an improving mix of industries and enviable demographics -- which is as much as many parts of the country can hope for. And besides shaping young minds, Pittsburgh is also doing its best to reshape old land, by cleaning up former mining and industrial sites for uses that suit the modern economy."

We have to say, with all objectivity, that the Londoners did a better job of capturing the changing Pittsburgh climate than the stuck-in-the-past New Yorkers.







...



The NYT did a glowing article about the South Side Slopes last month... and then promptly followed that up with unflattering portrayals in articles about the Heinz proxy battle and Ravenstahl's ascendence to mayor.

[AaronPGH]

come on now though... the south side is like a little mini bubble...

The southside is hardly a bubble. Sure, it may not go much higher, but it's certainly not going to fall. Please explain to me how it is an overpriced neighborhood compared to other cities of Pittsburgh's size.

[Evergrey]

http://www.post-gazette.com/pg/06274/726253-28.stm

Regional Insights: Cincinnati's economy bested Pittsburgh, too
Sunday, October 01, 2006

Everybody knows the Bengals beat the Steelers last Sunday. But Cincinnati also beat Pittsburgh in economic growth over the past year. The newest economic data released last week show that jobs in the Cincinnati region are growing nearly 50 percent faster than in Pittsburgh.

Employers in the Pittsburgh region created 10,000 net new jobs between August 2005 and August 2006, an increase of 0.89 percent. That's better than the previous year, when we only saw 7,800 new jobs, a 0.69 percent increase. However, even though Cincinnati is a smaller region, its employers created nearly 14,000 jobs last year, a 1.32 percent increase.

It wasn't just Cincinnati that beat us. Thirty-one of the top 40 regions did. For example, jobs in the Minneapolis region, a region similar to ours in many ways, grew by 2.68 percent in the past year, triple the rate in Pittsburgh. Seattle grew by 3.56 percent, quadruple the rate here.

As weak as job growth was here, we did manage to beat Silicon Valley, Columbus, and St. Louis, not to mention Cleveland, Indianapolis and Detroit, which actually lost jobs over the past year. (The biggest loser of all was New Orleans, which lost 28 percent of its jobs in the past year, due to Hurricane Katrina.)

Why is our job growth so weak? The health-care sector is still our top job generator, but it's not growing as fast as in other regions, probably due to slow population growth here. Leisure and hospitality was our second-biggest job generator over the past year, and we had faster growth there than most regions. The third-biggest job generator here was state government, although that appears to be due to job growth in the state universities.

The real problem is that unlike other regions, Pittsburgh is not seeing strong job growth in such sectors as professional and business services (our job growth in that sector ranked 35th out of 40 regions) and financial services (ranking 31st). Most significantly, we are continuing to see significant net job losses in manufacturing. During the recession, we were losing fewer manufacturing jobs than other regions, but that has changed -- over the past year, while we lost 3,400 more jobs, almost half of the top regions experienced job growth in manufacturing.

Is slow growth in Pittsburgh a local problem or a state problem? Pennsylvania's job growth over the past year was 0.93 percent, only slightly better than Pittsburgh's. Most of the other regions in Pennsylvania had job growth below the national average, as did the state as a whole. In fact, Pennsylvania ranked 36th out of the 50 states in job growth between 2005 and 2006. That's worse than the previous year, when the state ranked 34th. Pennsylvania lost manufacturing jobs for the ninth year in a row, even though manufacturing jobs increased in almost half of the states over the past year.

If Pennsylvania is going to capture its fair share of national growth, it has to be competitive. For example, the state still has the worst corporate taxes of any major state, and cutting the corporate net income tax would send a strong positive signal to business investors. And if the Pittsburgh region is going to grow faster, it needs to do more to encourage the creation and growth of startup businesses, particularly in technology and manufacturing sectors.

For more insight on the sources of growth in the region's economy, visit www.PittsburghFuture.com. Harold Miller, former president of the Allegheny Conference on Community Development, manages Pittsburgh's Future LLC, a regional economic development policy initiative that publishes www.PittsburghFuture.com. His column looking beyond local statistics for insights into the regional economy appears monthly.

[Evergrey]

Pittsburgh's been featured quite a few times in the New York Times in the last couple months... PNC's Jim Rohr has been a huge success... not only for PNC... but for the Greater Pittsburgh region

http://www.nytimes.com/2006/09/29/business/29bank.html?_r=2&oref=slogin&oref=slogin

Another Turnaround in Pittsburgh

http://graphics8.nytimes.com/images/2006/09/29/business/29bank.600.jpg
Bob Fritz for The New York Times
James E. Rohr, chief executive of PNC, has sought to drive down the bank’s high overhead costs to levels more in line with its peers.

By ERIC DASH
Published: September 29, 2006
PITTSBURGH, Sept. 25 — When it comes to comebacks, sports fans here would point to the fairy tale Super Bowl win by the Pittsburgh Steelers.

But PNC Financial, the big regional bank that has its headquarters downtown, could run a close second.

Only four years ago, the bank’s balance sheet was a mess. Its stock price was sagging. A series of bad bookkeeping decisions had federal regulators and investors banging on its doors.

Today, PNC is riding high. It has gotten its financial house in order, and the company’s stock has been on a tear, up nearly 28 percent over the last 12 months. And thanks to its large stake in BlackRock, the money management firm it sold to Merrill Lynch in February in a $9.8 billion deal, PNC is now flush with cash.

When the BlackRock deal closes on Friday, PNC will be at least $1.6 billion richer. The recent windfall comes at a price: all that extra money is almost certain to lower its returns. Already, PNC has begun a major share buyback plan and has hinted at raising its dividend even more. A portion of the money might be used to cushion the recent $200 million before-tax loss from wrong interest rate bets. But the prospect of lower returns leads some Wall Street analysts to say that the bank may be hungry for its own deal soon. James E. Rohr, chairman and chief executive of PNC, said the bank was a ready buyer, but would not rush in. “We would like to reinvest the capital over some period of time, but we want to do it patiently,” he said. “We have to be careful about the acquisitions we do because right now they are pricey.”

Mr. Rohr said a small bank acquisition that would add more PNC branches along the New Jersey-to-Washington corridor was high on his priority list. Bank executives have their eye on some 30 to 35 retail banks in that area — as well as others in Kentucky, Cincinnati and central Pennsylvania — and have contacted about half of them to gauge their interest in a possible deal. Most are small regional or community banks in the price range of $500 million to $1 billion.

While those areas are not exactly booming, Mr. Rohr says he believes that building on the bank’s existing presence can help it flush out costs and fuel growth. The bank also thinks that time may be on its side. Because PNC is more fee-dependent than its peers, pressure from a rise in interest rates and a slowdown in the economy may prompt smaller lenders to cave.

“We want them to decide on their own that we are the right partner,” said Joseph C. Guyaux, head of retailing banking at PNC. When it comes to making overtures, he called it a “gentler, Midwestern way.”

It is that same patient but focused approach that characterizes PNC’s turnaround. Just two years after Mr. Rohr took over as chief executive in 2000, the bank was under siege. Federal regulators found more $760 million in bad loans that were hidden in three off-balance sheet entities set up by the American International Group. Shares of PNC tumbled as the bank restated its earnings. Investors were not pleased.

“Jim took a lot of heat during that time period,” said Gerard S. Cassidy, a banking analyst with RBC Capital Markets. “There were many investors who wanted him replaced.”

Instead, Mr. Rohr ordered an overhaul of the bank’s risk management systems and its senior management team. He streamlined its dozen business units into two as a way of reducing its top-heavy management staff.

Over the last year, Mr. Rohr has sought to drive down the bank’s high overhead costs to levels more in line with its peers. Last January, PNC asked its employees for suggestions that would reduce expenses. Of the 6,000 ideas, some 2,400 — from tightening up fee exemptions to reducing postage costs — will be put into effect by the end of the year. By next June, PNC, which had 25,500 employees, will have eliminated about 3,000 jobs. Mr. Rohr expects the effort to generate more than $300 million in savings and another $100 million in revenue by mid-2007.

Now, Mr. Rohr is focused on expanding the PNC franchise. On the institutional side, PNC bought Harris Williams & Company, a boutique investment bank that advises midmarket businesses on mergers and acquisitions, last fall.

In retail banking, PNC has been undertaking an aggressive branch expansion. In 2006, PNC will build more than 35 new branches on top of the 103 in New Jersey and the Washington area it added with the purchases of United National Bancorp and Riggs National Bank in the last two years. And after exiting the credit card and home mortgage businesses several years ago, PNC has re-entered both in limited ways.

Next week, Mr. Rohr plans to address one of the bank’s biggest weaknesses — a brand awareness problem — with its first major advertising campaign in years. “If you look at our prospects, they don’t know us as well as we would like,” he said.

Still, it may be difficult for Mr. Rohr to take credit for PNC’s best decision. In 1995, PNC’s initial stake in BlackRock was worth $240 million. Today it is worth an estimated $5.1 billion before tax, including the recognized gain. Instead of meddling into day-to-day management, Mr. Rohr largely stayed out of the way.

“We don’t think of it as a windfall,” he said. “We earned that money over time.”

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http://www.post-gazette.com/pg/06282/728628-100.stm

PNC Financial Services acquires Mercantile
Monday, October 09, 2006

Pittsburgh Post-Gazette

The PNC Financial Services Group, Inc. has signed an agreement to acquire Mercantile Bankshares Corp. for $47.24 per share, or approximately $6.0 billion in stock and cash.

Mercantile is a $17 billion asset banking company that provides banking and investment and wealth management services through 240 offices in Maryland, Virginia, the District of Columbia, Delaware and southeastern Pennsylvania. The transaction will enable PNC to expand its presence in the Mid-Atlantic region, particularly the Baltimore and Washington, D.C. markets.

PNC Bank Executive Vice President Joseph Rockey and Mercantile Chief Administrative Officer and Deputy General Counsel Michael Paese are expected to oversee the integration process.

The acquisition of Mercantile is expected to make PNC a top-10 U.S. bank holding company by market capitalization and the 11th largest U.S. bank by deposits.

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huge news

http://timesunion.com/AspStories/story.asp?storyID=524496&category=BUSINESS&newsdate=10/11/2006

Bechtel to cut Schenectady jobs
Defense contractor plans to shift most of the work to Pittsburgh, leaving behind a satellite unit

By ERIC ANDERSON Deputy business editor
Click byline for more stories by writer.
First published: Wednesday, October 11, 2006

SCHENECTADY -- A defense contractor will move 260 or more jobs out of downtown Schenectady over the next two years as it consolidates operations in Pittsburgh.
A spokesman for privately held Bechtel Plant Machinery Inc. said the "vast majority" of the company's 330 largely white-collar employees would get offers to relocate to Pittsburgh or remain with a smaller satellite operation in Schenectady.


Both units engineer and procure parts for nuclear propulsion systems aboard Navy ships.

Bechtel said the number of employees that will be remaining in Schenectady hasn't been determined, but Schenectady Mayor Brian U. Stratton said the satellite office would employ 65 to 70 people.

The bulk of the jobs will shift to Bechtel's Pittsburgh office within the next year, said Jim Dillon, the local operation's manager of procurement operations and public information officer.

The Pittsburgh office, with 550 employees, was larger, Dillon said, and jobs had been moving there over the years from Schenectady, which has seen employment drop to 330 from 450 in 1986.

At least some of the decline came after the Navy canceled its Seawolf contract. Dillon said the reductions were done through attrition.

The Schenectady unit and the one in Pittsburgh date back to the early days of nuclear propulsion in the U.S. Navy.

Stratton said his late father, U.S. Rep. Samuel Stratton, worked closely with Navy Adm. Hyman G. Rickover to bring the nuclear propulsion business to Schenectady in the 1950s.

The procurement unit, which does the engineering and purchasing of parts after the propulsion units are developed by Knolls Atomic Power Laboratory, originally occupied a series of buildings along lower Erie Boulevard but moved in 1986 to the former Two Guys department store building downtown.

The federal government in the 1950s established both Knolls, operated by General Electric Co., and the Bettis Atomic Power Laboratory in Pittsburgh, operated by Westinghouse Electric Co., to develop and produce nuclear propulsion units for Navy ships.

GE got out of its defense businesses in 1993. By 1999, Bechtel operated not only Bettis, but both its and Knolls' procurement arms. Lockheed Martin now operates Knolls.

Dillon said the consolidation was intended to eliminate duplicate operations.

Mayor Stratton said he will fight Bechtel's decision to leave Schenectady.

"We want Congress and the Pentagon to give us an explanation why this operation, which has been in Schenectady for so many years ... must now be consolidated with a similar operation outside of Pittsburgh," he said.

Stratton also criticized the company for not notifying city and state officials of the move, and said he would seek to have it reversed.

"I'm not conceding anything yet," Stratton said.

An agreement that gave the building, owned by Picotte Cos., an exemption from county and school district taxes expires next year. Picotte officials couldn't be reached late Tuesday afternoon for comment.

Ray Gillen, chairman of the Schenectady Metroplex Development Authority, questioned whether Bechtel would be saving money with this move.

"Pittsburgh is not a bargain environment," he said. "We have to get our arms around the cost issues." Anderson can be reached at 454-5323 or by e-mail at eanderson@timesunion.com.

BECHTEL PLANT MACHINERY INC.

WHAT IT DOES: Operates procurement units for the U.S. Navy's nuclear propulsion program

OFFICES: Pittsburgh and Schenectady

EMPLOYEES: 880

FOUNDED: 1956 in Pittsburgh, originally operated by Westinghouse Electric Co.; 1959 in Schenectady, originally operated by General Electric Co.



...



http://www.pittsburghlive.com/x/pittsburghtrib/business/s_474412.html

Bechtel Plant Machinery relocating jobs to area

By Joe Napsha
TRIBUNE-REVIEW
Wednesday, October 11, 2006


Bechtel Plant Machinery Inc. said Tuesday it plans to move about 260 engineering and business procurement jobs to the Pittsburgh area within 12 months because it is closing most of its Schenectady, N.Y., plant.
Bechtel Plant Machinery, a global engineering and construction firm, will transfer the jobs to its plant apparatus facility in Wilkins as it consolidates its operations in Schenectady, where it has about 330 employees, said James Dillon, manager of procurement operations for Bechtel Plant Machinery. It will keep about 65 to 70 jobs in Schenectady, and the other workers will be offered a chance to transfer to Wilkins, Dillon said.

The company, which has a contract to design and procure hardware for the U.S. Navy's nuclear propulsion program, conducted a study on consolidating the two operations to cut costs, Dillon said. Because the plant in Wilkins has about 550 employees, compared to 330 at the Schenectady operation, the decision was made to reduce operations at the smaller facility, Dillon said.

The U.S. Department of Defense two years ago awarded Bechtel Plant Machinery a $228 million contract to work on a nuclear propulsion system. Bechtel manages the project but does not manufacture the parts, Dillon said. Its business procurement group subcontracts the work, he added.





Bechtel Plant Machinery is a subsidiary of Bechtel National Inc., which is part of Bechtel Corp. of San Francisco. Bechtel Bettis Inc., which is part of Bechtel Corp., has a plant in West Mifflin that plant does work for the U.S. Navy and the Department of Energy.

Bechtel Bettis last October landed a $480 million contract to maintain nuclear reactors for the Energy Department and the Navy.



Joe Napsha can be reached at jnapsha@tribweb.com or (412)-320-7993.

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http://www.post-gazette.com/pg/06284/728875-28.stm

Mellon may pursue Boston fund firms
Some say Pittsburgh firm considering multibillion-dollar acquisition
Wednesday, October 11, 2006

By Dan Fitzpatrick, Pittsburgh Post-Gazette

Followers of Mellon Financial Corp. believe the storied Pittsburgh firm may be considering a billion-dollar acquisition or merger designed to bolster its standing in the asset management world.

Two Boston mutual-fund managers -- Putnam Investments and MFS Investment Management -- recently were put on the block and analysts have a hunch Mellon is bidding for one, the other or both. Either company could be sold for as much as $4 billion. A merger, which would be a less-expensive option, is also a possibility, analysts said.

"I would be shocked if Mellon was not one of the leading bidders," said Richard Bove, a financial services analyst for Punk Ziegel & Co. in Tampa, Fla.

When asked about an interest in either company, Mellon spokesman Ken Herz said, "We never comment on market rumors or speculation."

It is no secret, though, that Mellon Chief Executive Officer Robert Kelly wants to grow Mellon's asset management business -- the company's biggest profit generator. Mellon currently has $870 billion in assets under management, and it ranks as the eighth largest U.S. money manager in a recent survey from Pensions & Investments, a trade publication.

Acquiring Boston-based Putnam, which manages $180 billion and is owned by New York financial services company Marsh & McLennan, probably would catapult Mellon into the top five -- a list now occupied by State Street Global Advisors, Fidelity Investments, Capital Group, Vanguard and the recently merged BlackRock/Merrill Lynch, a combination partly owned by Pittsburgh's largest bank, PNC Financial Services Group. Acquiring MFS, another Boston manager that handles $168 billion in mutual funds, also might push Mellon into that exclusive group.

MFS has a Canadian parent, Sun Life Financial, an "angle [the Canadian-born Mr. Kelly] can play," said Gerard Cassidy, an analyst who follows Mellon for RBC Capital Markets in Portland, Maine.

"Mr. Kelly wants Mellon known as an asset manager. An MFS transaction would put him in a different league than he is in right now,'' he said. "If they are not looking at [Putnam and MFS], I would be surprised."

An MFS spokesman declined comment about Mellon and a spokesperson with Putnam could not be reached.

Analysts said several other companies are no doubt interested in Putnam and MFS -- both of which are well-known players in the mutual fund world. In both cases, their parent companies have hired investment bankers to seek out potential buyers.

The activity is part of a larger trend in the industry, with several big financial services firms unloading their money management units recently. Such thinking, in fact, led Merrill Lynch to sell Merrill Lynch Investment Managers to PNC-owned BlackRock Inc. in exchange for a majority stake in the combined company.

At Mellon, a big acquisition would allow Mr. Kelly to put his stamp on the 137-year-old company he began leading in February. Next month, he is expected to unveil the results of a company-wide strategic review designed to identify new cost-cutting and revenue opportunities.

Mellon currently has two main business units -- money management and securities processing. Mr. Kelly has said he has no plans to de-emphasize that dual strategy, even though analysts expect him to lean more heavily on asset management in the years ahead and look for opportunities to grow that business via new transactions.

"I think one of the reasons Mr. Kelly is there is to make acquisitions," said Mr. Bove, the analyst with Punk Ziegel. "That is one of his primary roles. As these companies come up for bid, certainly Mellon will be taking a look."


--------------------------------------------------------------------------------

(Dan Fitzpatrick can be reached at dfitzpatrick@post-gazette.com or 412-263-1752.)

[themaguffin]

The Bechtal news is good in its own right, but the fact that the Westinghouse possibility is out there, makes this news even more significant, as it adds to the local talent pool. The Chamber/regional Alliance should be e-mailing this news to the Westinghouse execs....

[PittPenn 03]

Barely in the Pittsburgh Metro and not that huge, but more encouraging news:


http://www.sharon-herald.com/business/local_story_284174512.html/resources_printstory

Steelite USA plans to build facility in Millennium Park
By John K. Manna
New Castle News


NESHANNOCK TOWNSHIP, Lawrence County— Finally, Millennium Park is getting its first tenant.
Steelite International USA, a producer of tabletop items that include china, glass and silver products for the restaurant and hotel food service industry, will move its headquarters from New Jersey to Neshannock Township. The site will serve as headquarters for North and Latin Americas and the Caribbean.
A groundbreaking is set for 2 p.m. Friday at state Route 60 and Pulaski Road.
The new facility, which is projected to create 40 to 50 jobs, will be home to Steelite’s corporate offices, sales and marketing divisions, operations team and a full-service customer service department.
According to a news release issued by Medure Development, the general contractor for the building, company President John D. Miles said the firm plans a phased move to the new facility beginning next summer.
Miles attributes explosive growth over the last decade as the reason for the move.
“In recent years, it became evident that we needed to upgrade and expand our facilities to accommodate both our current business and future growth,” he said.
Miles said that “we were looking for a more Midwest location” that would give the company “a logistic advantage.”
The firm also was looking for a Foreign Trade Zone, and the state had trade zone space available in western Pennsylvania, he said.
Products in a Foreign Trade Zone are protected from taxation and duty charges. Application has been made to the federal government to designate 15 acres of Millennium Park as a Foreign Trade Zone, according to Robert DelSignore, Lawrence County Economic Development Corp. president.
Miles added the company was looking at sites in Kentucky and Michigan, but considered the package put together by the local development corporation and Medure Development “to be the most advantageous.”
The new space will include a 50,000-square-foot distribution warehouse and a 12,000-square-foot administration office. A 10,000-square-foot concrete pad will be added for projected expansion.
DelSignore said Steelite’s presence should spur interest for other companies to locate in the 533-acre Millennium Park, “because the companies are going to know it’s for real.
“In a couple weeks, there’s going to be equipment on the site.”
The $5 million investment by Steelite, he said, will allow the corporation to provide the match for an additional $2 million through Pennsylvania’s Redevelopment Assistance Capital Program. The corporation already has secured $2 million.
The corporation will then be able to pay the money it owes to both the city of New Castle and Neshannock Township for sewer construction, he said. New Castle is owed about $1.16 million and Neshannock is owed about $399,000.
DelSignore said a contract will be awarded, probably next week, for construction of an access road from Pulaski Road for Steelite.
In addition, King’s Chapel Road will be regraded, but there won’t be any road base or concrete applied now. The road will be finished, he said, when the park attracts more tenants.

Copyright © 1999-2006 cnhi, inc.

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150 jobs for Washington County

http://www.bizjournals.com/pittsburgh/stories/2006/10/23/focus8.html?t=printable

After fire, former glass factory nears rebirth as industrial park
Detroit Street facility to become home to plastics company
Pittsburgh Business Times - October 20, 2006by Ben Semmes

Five years ago, there were few prospects for Washington's old Glass Ball Co. property, gutted by the largest tire fire in the history of the state.

Then, after years of legal wrangling, the state and the Redevelopment Authority of Washington County agreed to clean up the site, less than a half-mile from the center of the city of Washington.

In May, Prime Plastics Inc., a Washington-based custom plastics blow molder, signed a one-year lease for approximately 80,000 square feet of space in two buildings on nearly six acres, about half of the entire site. The lease comes with an option to buy, which the company plans to exercise once the redevelopment authority finishes its cleanup.

But the rehabilitation of the site has not come easily.

In 1997, an arsonist lit fire to a mountain of tires at the facility, and the resulting inferno burned for nine days, destroying most of the buildings on the site and creating an environmental nightmare.

"The Pennsylvania Department of Community and Economic Development pledged that they would financially support the project," said Susan Morgan, the redevelopment authority's brownfields manager. "The Pennsylvania Department of Environmental Protection spent a significant amount of money ... trying to put out the fire as well as remediate damage to the creek."

Despite the site's troubled history, the cleanup effort will destroy hazardous structures, renovate existing ones and tear up decrepit cement foundations. When completed, the 11-acre site will have several positive attributes, said Bill McGowen, president of the redevelopment authority. Already zoned for industrial development, the site also has rail access, and it is located in close proximity to the intersection of interstates 79 and 70.

By the beginning of next year, two buildings -- one of them newly renovated -- are expected to be occupied, and the remaining half of the property will be clean and ready for future tenants.

"Hopefully, we are going to have it remediated and all cleaned up in the next three or four months," McGowen said.

Once that is complete, the authority hopes to grade more land to accommodate other companies.

Prime Plastics, which incorporated in May, recently acquired machinery from Falcon Plastics -- Washington County entrepreneur Angelo Falconi's defunct business, which liquidated its assets earlier this year.

Prime has moved its manufacturing operations into a 28,000-square-foot building, the only structure on the property in move-in condition. The company expects to move into the second, 48,000-square-foot structure soon after minor demolition work is complete early next year.

"(Prime) anticipates hiring 75 people initially and creating an additional 75 in the next 2 or 3 years," company spokesman George Retos said. "There is an excellent, experienced, qualified work force in the Washington County area, and that is why the company selected the site."

Rick O'Brien, a broker with Downtown-based Grubb & Ellis, said that the development could provide much-needed space in a fairly tight market.

"There have been no new industrial park developments in Washington County in years," O'Brien said. "This just may fill a void."

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http://pittsburgh.bizjournals.com/pittsburgh/stories/2006/10/23/daily15.html?surround=lfn

Virtus puts U.S. headquarters in Pittsburgh
Pittsburgh Business Times - 8:57 AM EDT Wednesdayby Jennifer Curry
Virtus Advanced Sensors, a developer of MEMS sensors, is opening up its U.S. headquarters in Pittsburgh.

Louis Ross, the president and CEO of the company, who is originally from Pittsburgh, has leased office space Downtown. He plans to have the company moved in by the end of this year.

The Pittsburgh office will help support the company's plans to commercialize its sensor technology, which can be used in the automotive industry as well as medical devices, robotics, aerospace and defense.

"We are very excited about the growth of the inertial sensor market and the enabling role MEMS will play moving forward," said Louis Ross, co-founder, President and CEO of Virtus, in a statement. "We believe our patent portfolio and management strategy will help us quickly build a strong competitive position in this fast growing market."

Along with the U.S. office, the company, which has offices in the United States and Japan, has plans to open another office in Asia by the end of the year and have a European office by 2008.

Mark Borger, vice president of business development at the Technology Collaborative, an economic development organization supporting Pennsylvania's robotics industries, said Virtus will help to create jobs in the region.

"Their operations in Pittsburgh will not only create new jobs in the region, it will help to reinforce Pennsylvania's position as a world technology leader, capable of providing what every early-stage technology company needs," he said.

jcurry@bizjournals.com | (412) 481-6397 x235


..

http://www.popcitymedia.com/developmentnews/35virtus.aspx

Virtus announces Pittsburgh headquarters
Virtus Advanced Sensors, a leading developer of devices used in a number of key industries, has chosen Pittsburgh for its U.S. headquarters. Virtus will occupy a 10,000 square-foot space in downtown’s Gulf Tower in December.

“It’s a national landmark--a monument to the glorious past” says Virtus CEO Louis Ross. “I love the contrast to high-tech--no one expects us to be there.”

Using micro electro-mechanical systems (MEMS), Virtus develops low cost devices that sense motion and rotation. Its accelerometers, gyroscopes and motion sensors are used within the electronics, automotive, robotics, life sciences and aerospace industries.

“We're here because of growth in those markets,” says Ross. The Beaver County native is currently shopping Virtus’ “white baby seal” therapeutic robot. In Pittsburgh, Virtus will commercialize its technology and collaborate with partners in academia and industry to develop regional applications and markets.

"Areas being developed here are some of the best,” says Ross, who co-founded Virtus in Japan and the U.S. in 2005. “CMU puts Pittsburgh on the map—we plan to work with them.”

Expected to reach $2 billion, the sensors market is buoyed by consumer electronics applications such as next-generation cell phones, PDA’s and miniature hard disk drives.

“Pennsylvania made a commitment to high-tech,” says Ross, who previously worked for Merrill Lynch and the American Enterprise Institute. “ I monitored what was going on here from afar.” Ross, who has lived in Japan for fourteen years, cites Pittsburgh’s affordability and friendliness as further motivation. “I picked Pittsburgh over Silicon Valley.”

Virtus boasts one of the world’s largest patent portfolios in its industry. Adding to its Tokyo office, Virtus will establish a Hong Kong presence by 2007 and hopes to add a European office by 2008.

Writer: Jennifer Baron
Source: Louis Ross, Virtus

Photograph copyright © Jonathan Greene

http://www.popcitymedia.com/galleries/Default/Dev%20News/Issue%2035/gulf_tower_300.jpg

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http://www.pittsburghlive.com/x/pittsburghtrib/business/s_476891.html

Region poised to become busier distribution center

By Sam Spatter
FOR THE TRIBUNE-REVIEW
Friday, October 27, 2006


The Pittsburgh region - although it has several large distribution centers - often is passed over by major retailers for other areas nearby, experts say.
But the situation may be changing.

Thanks to a concerted regional effort, large tracts of flat land near Pittsburgh International Airport are available for retailers' warehouse/distribution centers that in the past were won by areas such as Columbus, Ohio, and the Harrisburg-Lehigh Valley area, where flat land is more available.

"Because of being located between the two largest distribution hubs, the area has only been able to get the overlap from these areas in the past," said Lou Oliva, industrial broker for Grubb & Ellis/Pittsburgh, a Downtown industrial real estate firm.

While the response to making Pittsburgh a warehouse/distribution center has been slow, the region has the geographic opportunity to change that situation, Oliva said.

"Costwise, we could not compete with Columbus, which offered a large inventory of warehouse/distribution space at $3 per square foot, particularly for older facilities. But new developments near the airport, now available because of the Findlay Connector, make us competitive," he said.

Oliva said a recent large deal here came in at $4 per square foot, although most rental rates range from $4 to $5.

He said he agrees with a recent article in "The Economist," a noted London-based magazine, that said the addition of a highway spur connecting the interstate system with flat land near the airport could appeal to companies looking for places to put distribution centers.

"It has lower costs than the big coastal cities. Its potential appeal as a logistics hub thus gives it a fighting chance of attracting the sort of distribution investments that have helped such cities as Louisville and Memphis, though on a smaller scale," the article stated.

"I don't believe it will become a center on the scale of a Columbus, although we should see increase in warehouse/distribution activity here," Oliva said.

"We now have shovel-ready sites for firms interested in locating a distribution/warehouse facility in the region, something that wasn't available in the past, coupled with the designation of the Parkway West as I-376 as an interstate road," said Bob Cornell, president of Colliers Penn, a Downtown commercial real estate firm.

Those sites include CSG Properties' 325-acre Imperial Business Park, where a 100,000-square-foot building is available of the 2 million square feet planned there; Chapman Properties' 300-acre Chapman Commerce Park, a 2.8-million-square-foot mixed-use complex offering shovel-ready development sites up to 50 acres; Imperial Land Co. with about 800,000 square feet available, primarily in Allegheny County but partly in Washington; and the Buncher Co.'s Clinton Commerce Park, where a 200,000-square-foot spec building is under construction, with the ability to expand it to 400,000 square feet.

Without flat land available, it costs developers $40 to $50 per square foot to build a warehouse/distribution facility in the region, said Ted Ackman, senior vice president, Buncher Co.

"Our topography required large amounts of dirt to be moved in order to build, and that ran up the cost," he said.

"Pittsburgh is kind of isolated from the East Coast, and land there is often tough to build on although new highways opened up more flat land," said Robert Bach, senior vice president with Grubb & Ellis in Chicago.

"There is a possibility that retailers who didn't consider Pittsburgh in the past will consider it now, but other areas -- such as the Lehigh Valley and Columbus -- have long histories of being distribution hubs and tend to attract retailers to them," he said.

The Pittsburgh area can boast of some recent successes.

• TreeHouse Foods Inc. recently leased 265,000 square feet in a 540,000-square-foot warehouse along Nixon Road, near Route 28 and the Pennsylvania Turnpike in Harmar. TreeHouse earlier this year purchased Del Monte Foods' private label soup and baby food operations in the former Heinz plant on the North Side. That lease filled up the warehouse formerly occupied entirely by Glenshaw Glass.

• Dick's Sporting Goods announced in 2004 that it would increase the size of its distribution center by 50 percent in Westmoreland County. Instead of opening a new center elsewhere, Dick's decided to enlarge its existing 388,000-square-foot center in Smithton by another 200,000 square feet so it could service new stores from a single facility.

• Also in 2004, Aldi Food Stores opened a 412,000-square-foot regional headquarters and distribution center at Victory Road Business Park in Clinton, Butler County.

With 34.47 million square feet of warehouse/distribution space in the region, as of the end of the third quarter, about 4.2 million square feet -- or 12.2 percent -- was vacant, down from 13.7 percent at the end of the second quarter, according to a Grubb & Ellis survey.

In addition, 330,000 square feet of new speculative warehouse/distribution space was under construction, as was 47,000 square feet of new owner-occupied space, the survey listed.

Region not on par with others

The Pittsburgh region has numerous warehouse/distribution facilities, but it's not on par with other areas

• Giant Eagle's Crafton site, which opened in 1981, covers nearly 100 acres and has about 800 employees.

• Levin Furniture has expanded its warehouse in Smithton, Westmoreland County, to 311,000 square feet.

• Smart Parts Inc. acquired former Reinhart Food Services' 94,000-square-foot warehouse in Westmoreland County.

• Roomful Express Furniture purchased the 597,000-square-foot former Lazarus warehouse/distribution facility in Chartiers Industrial Park for its corporate headquarters and distribution/warehouse center.

• Francis X. DeLallo, trustee of the Mars Worthing Trust, purchased the 280,000-square-foot former Sony Electronics warehouse and distribution building in the Sony Technology Center-Pittsburgh in New Stanton, Westmoreland County.

• Downtown Pittsburgh-based Castlebrook Development, with co-developer Neyer Properties of Cincinnati, is planning to develop a 411,000-square-foot warehouse/distribution facility at the Pennsylvania Turnpike interchange with Route 60 in Beaver County.

• At the northeast corner of the turnpike's intersection with Route 18, the Beaver Initiative for Growth has started on the first phase of Westgage Industrial Park, a 225-acre site in Big Beaver Borough, that is expected to have up to 1.3 million square feet of light industrial/distribution space. First tenant is Interline Brands Inc. of Jacksonville, Fla., which will occupy 55,000 square feet.



Sam Spatter can be reached at sspatter@tribweb.com.

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Baltimore Sun's perspective on PNC

http://www.baltimoresun.com/business/bal-bz.pncbank10oct10,1,6105269.story?ctrack=1&cset=true

Powerful PNC has Pittsburgh roots
By Allison Connolly
Sun reporter
Originally published October 10, 2006
It wasn't long ago that Pittsburgh's largest bank, PNC Financial Services Group, was considered a takeover target during rampant industry consolidation. Now its name is replacing a Baltimore institution.

PNC's proposed $6 billion purchase of Baltimore's Mercantile Bankshares Corp. would make it the nation's 11th largest in terms of deposits and 16th in terms of assets, with more than 1,000 branches from Ohio to Washington.

Those rankings were widely touted by business leaders back home yesterday, who say the bank has played a key role in the Pittsburgh's revitalization, underwriting arts and educational programs and investing in downtown real estate.

"PNC has emerged in the 21st century as a dynamic leader in our region's economic growth," said Andy Masich, president and CEO of the Sen. John Heinz Pittsburgh Regional History Center.

"This further enhances their prestige in the city," said Jeffrey Letwin, managing partner at Schnader, Harrison, Segal & Lewis LLP in Pittsburgh and chairman of the board of VisitPittsburgh.

PNC helped Pittsburgh keep the Pirates baseball team, whose home field is PNC Park. It is building Three PNC Plaza, a $170 million office, retail, hotel and condo tower, though the project has drawn some criticism because the bank received an $18 million tax break.

"The cheerleaders would say it's a show of confidence in the city," said Frank Gamrat, senior research associate at the Allegheny Institute for Public Policy, a conservative think tank focused on local government. "The bank should not be in the landlord business."

City business leaders say Three PNC Plaza will draw more people and businesses to downtown.

The bank actively has pursued a policy of being a good corporate citizen, said PNC spokesman Patrick McMahon. The bank pledged $100 million over 10 years to its "grow up great" education program for preschoolers.

Employees can earn up to 40 paid hours for volunteering for that program and others.

The bank also has made an environmental commitment to build "green structures" that make use of natural light and have efficient heating and air conditioning systems. And the company prides itself in making Working Mother magazine's annual "100 best companies for working mothers" for the last five years.

"They are clearly out in front in this community in terms of the cultural community and sports," said F. Michael Langley, chief executive officer of the Allegheny Conference on Community Development.

The conference was formed in the 1940s by community leaders, including names like Heinz and Mellon, to promote new jobs and business in the Pittsburgh area.

PNC chairman and chief executive James E. Rohr is currently chairman of the conference as well as of the city's 250th anniversary celebration in 2008.

To kick off a two-year promotion of the anniversary, the city last month unveiled a new marketing slogan: "Pittsburgh: Imagine what you can do here."

"Jim Rohr embodies that," Masich said. "He's an energetic guy and great spokesperson for our community."

PNC is Pittsburgh's oldest bank, having been founded in 1852 as Pittsburgh Trust and Savings Co. In 1982, Pittsburgh National merged with Philadelphia's Provident National Corp., to form PNC Financial Corp. in what was then the largest bank merger in history.

In 1986, PNC ventured out of the state to buy Citizen's Fidelity Corp. in Louisville, Ky. and Cincinnati's Central Bancorp. It outpaced Pittsburgh's Mellon Bank Corp., which had long been the biggest bank in town but got caught with bad loans to developing countries and oil and natural gas producers.

But PNC itself began racking up losses about 1990 when the commercial real estate industry soured. Then it failed to foresee rising interest rates in 1994, which cut 1995 profits. PNC was considered a takeover target amid frenzied consolidation in the industry.

But it stayed the course and continued to grow. In May 2005, PNC paid $643 million for Washington's Riggs National Corp., known as the "bank of presidents" because several first families had accounts there.

Just before the acquisition, Riggs pleaded guilty to a felony charge of failing to notify authorities of suspicious transactions among foreign customers, including Chilean dictator Augusto Pinochet, and paid nearly $31 million in fines.

Last month, PNC garnered attention for eliminating ATM fees for customers worldwide who maintain an average monthly balance of $2,500 or who sign up for certain new products.

The bank currently is archiving bank statements from famed customers, including Abraham Lincoln and Richard M. Nixon. Last week, PNC announced it would give the collection, worth about $5.2 million, to George Washington University, along with a $125,000 grant from the PNC Foundation.

After Riggs, the purchase of Mercantile - even for top dollar - makes sense, said David Danielson, president of Danielson Capital LLC, of Vienna, Va.

"They essentially made a deal in D.C. that they wish they hadn't," he said. "This makes it work. Their franchise is much more valuable now."

The company is wrapping up a restructuring program started last year that eliminates 3,000 jobs and saves the company $300 million, with potential to expand revenue by $100 million a year. As of June 30, the company had shed 2,400 jobs.

PNC reduced its share in BlackRock, one of the largest publicly traded investment firms, after BlackRock merged with Merrill Lynch Investment Managers. The deal closed last week. PNC also has a worldwide mutual fund processing center called PFPC, which has $1.9 trillion in assets.

Danielson said he expects PNC to launch an ad blitz to familiarize consumers in Mercantile's territory with the name.

"Can you believe they're going to take down the Mercantile sign, one of the most recognizable in Baltimore, and replace it with PNC bank?" he said. "Everyone's going to ask, who is PNC?"

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the national praise for Pittsburgh seems almost non-stop lately... here's an article on Pittsburgh's new economy from Bloomberg

http://www.bloomberg.com/apps/news?pid=20601103&sid=angA.h0Dr6Ys&refer=us

Google, Intel, Microsoft Researchers Spur Pittsburgh Startups

By Jerry Byrd

Oct. 31 (Bloomberg) -- U.S. Steel Corp., once Pittsburgh's dominant employer, now has just 4,590 workers in the region. Universities and hospitals employ more than 10 times as many.

The colleges are benefiting from partnerships with three of the biggest names in computing: Google Inc., Intel Corp. and Microsoft Corp.

The companies, which operate campus labs in Pittsburgh, are contributing to the city's transformation from symbol of 20th- century industrial decline to high-tech hub. Microsoft said in June that it would help fund a robotics center at Carnegie Mellon University. Overall, technology companies and research employ 213,000 people in the region and generate a $10.8 billion payroll, the Pittsburgh Technology Council says.

Last year, the research corridor near Carnegie Mellon and the University of Pittsburgh attracted about $1 billion in public and private funding, twice the amount of five years ago.

``Pittsburgh was hit harder than any other American city in the change from an industrial economy to the new economy,'' says Don Smith, vice president for economic development at the Mellon Pitt Corp., a partnership coordinating research at the schools.

``And I think Pittsburgh accepted sooner than some other cities that it had to change, that we weren't going back.''

The investments are paying off, with startups generating revenue for the schools from royalties, licensing fees and patents. In the 2006 fiscal year, the University of Pittsburgh earned $11.9 million, partly from the sale of the Stentor Inc. medical-imaging technology company. Carnegie Mellon helped spin off 14 companies in fiscal 2006, the university says.

Steel City

Steel's collapse because of cheap imports almost took Pittsburgh with it, eliminating 230,000 jobs and prompting an exodus that cut the population in half -- to 334,563 in 2000 from a peak of 676,806 in 1950, the U.S. Census Bureau says.

U.S. Steel's employment in the region peaked at 340,498 in 1943, the company says.

Facing insolvency, the western Pennsylvania hub began relying more on its colleges and the University of Pittsburgh Medical Center network. Today, the region's 7,000 technology companies fund almost 25 percent of its payroll, the technology council says.

``For the perception of Pittsburgh as a steel industry town, that is an almost incongruent thought,'' council spokesman Kevin Lane says.

In 2004, the Seattle-based Bill & Melinda Gates Foundation donated $20 million for a new computer science building at Carnegie Mellon, whose graduate program tied with three others for top ranking in a 2006 U.S. News and World Report survey. Apple Computer Inc. also occupies lab space there.

Keeping Talent

Craig Street, near the universities, has been dubbed Silicon Alley, says Andrew Moore, lab director for Mountain View, California-based Google. The former CMU professor says graduates used to leave Pittsburgh because it lacked good career opportunities.

``Having a Google office here is a great way of getting ahold of great talent,'' he says.

More than a dozen universities, plus area hospitals, spur growth in surrounding Allegheny County, accounting for more than 50,000 jobs. ``Without the `eds and meds,' we would have lost more jobs,'' Smith says.

Research at CMU has spawned more than 170 startups since 1995, including chipmaker Akustica Inc. and the Web portal Vivisimo Inc. The school says it has earned $48 million from selling stock in Lycos Inc., the search engine developed in 1994 by graduate student Michael Mauldin.

The University of Pittsburgh had 10 startups in the year ending in June 2005, ranking it sixth nationally, says the Association of University Technology Managers in Northbrook, Illinois.

Carnegie Mellon Lab

The four-story Collaborative Innovation Center at CMU opened last year. The 136,000-square-foot (12,635-square-meter) facility was built for $27.9 million in public funds to house computer- related, biomedical and life sciences labs.

Google, maker of the world's most-used search engine, occupies the first floor. Its projects include helping computers learn new tasks -- such as blocking spam e-mail -- based on data patterns.

Intel Research Pittsburgh on the top floor employs about two dozen engineers, says Kevin Teixeira, spokesman for the Santa Clara, California-based semiconductor maker.

``The campuses of universities have lots of smart people,'' Teixeira says. ``You get a rich melting pot of perspectives.''

Intel, which shares its floor with Apple, is developing information storage and retrieval software with the University of Pittsburgh. Officials at Cupertino, California-based Apple didn't return calls seeking comment.

Robotics `Revolution'

Microsoft, based in Redmond, Washington, is providing hundreds of thousands of dollars for CMU's Center for Innovative Robotics, facility director Illah Nourbakhsh says. The lab will launch a Web site next year to make robotics more accessible and collaborative.

``The idea is to create a site that has a snowball effect,'' he says. ``It's designed for the expert and even somebody who's never built a robot, who'll say: `Here's my idea. What can we do with it?'''

Robotics could become a multibillion-dollar industry within a decade, says Tandy Trower, general manager of the Microsoft Robotics Group in Redmond.

``If you lived through the PC revolution, get ready to watch it happen one more time,'' Trower says.

Pittsburgh officials, whose city spurred one industrial revolution already, say they are poised for another.

``We've had so much to overcome in terms of the economy and also psychologically,'' says Maxwell King, president of the $1.4 billion Heinz Endowments philanthropy, which awarded $57.6 million last year for regional economic, educational and cultural programs.

``It's remarkable to see how resilient the people are.''

To contact the reporter on this story: Jerry Byrd in Wilmington, Delaware at jbyrd@bloomberg.net .

[Wheelingman04]

^ It is amazing how well Pittsburgh has survived the loss of industry. It should be in worse shape than most other industrial cities, but it is doing pretty well.

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http://www.pittsburghlive.com/x/pittsburghtrib/business/s_477766.html

Tax incentives designed to entice Westinghouse

By Ron DaParma
TRIBUNE-REVIEW
Thursday, November 2, 2006


The state is about to enact an incentive package that officials hope will provide the tax breaks needed to put Western Pennsylvania over the top in its bid to convince Westinghouse Electric Co. to select the area for a major expansion.
Legislation awaiting Gov. Ed Rendell's signature would create a maximum of four Strategic Development Areas offering tax breaks and incentives in four key geographic areas of the state targeted for economic development projects that would create or maintain a minimum of 500 jobs and involve capital investment of at least $45 million.

According to supporters of the legislation, one of the areas would be specifically targeted for Westinghouse, which is planning a new campus that would host about 1,000 workers initially and possibly 2,000 within eight to 10 years.

Western Pennsylvania is competing with North Carolina and South Carolina for the project, with a decision expected in late November or early December.

"With the acquisition of Westinghouse by Toshiba earlier this year, many other states across the country are trying to lure this expansion away from Pennsylvania," said state Rep. Joseph Markosek, D-Monroeville, one of the backers.

"We needed to offer a competitive economic development package so that the company will stay in our region and expand its operations here."

The measure, adopted last week by both the House and Senate, would be similar to the state's Keystone Opportunity Zone program, according to Kevin Ortiz, a spokesman for the state Department of Community and Economic Development.

KOZs provide exemptions for up to 12 years on both state and local taxes for companies that locate facilities and create jobs on designated sites. In the case of SDAs, the tax breaks would be available for up to 15 years. It will be up to local municipalities and school districts affected to agree.

According to Ortiz, the four SDA areas have yet to be identified. In the case of Westinghouse, Western Pennsylvania sites reportedly under consideration include expansion at its existing headquarters in Monroeville, or at unidentified sites in Cranberry or Marshall.

Winning the competition for the Westinghouse expansion could mean $400 million in new investments in the region, Markosek said.

"According to estimates, the average yearly wage offered through this expansion would be more than $92,000 a year," he said.

Westinghouse spokesman Vaughn Gilbert declined to comment on the legislation's potential impact.

"Clearly, Pennsylvania has been very supportive in its efforts to try to keep Westinghouse in Western Pennsylvania, but we still have to make our final evaluation," he said.



Ron DaParma can be reached at rdaparma@tribweb.com or 412-320-7907.

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http://www.pittsburghlive.com/x/pittsburghtrib/business/s_477938.html

Rendell intends to meet with US Airways CEO

By Ron DaParma
TRIBUNE-REVIEW
Thursday, November 2, 2006


Gov. Ed Rendell says he intends to meet with US Airways CEO Doug Parker "within the next week or so" to get a better idea of Pittsburgh's chances to win a three-city bidding war for a new flight-operations control center that would employ 400 to 600 people.
"I've said we would be willing to negotiate, and I want to find out from them (US Airways) where we think our bid should be," Rendell said Thursday. "We'll have an arms-length negotiation with them."

State and Allegheny County officials believe their combined offer of some $16.25 million in incentives to the airline "is competitive," with rival offers from U.S. Airway's home city of Phoenix, Ariz., and Charlotte, N.C.

That's despite word that the offer from Phoenix is in the range of $24 million. Charlotte's offer has yet to be made public.





"We can say, 'Look, where are we? Where do we stand? and say we can consider some other things if you want to propose some other things,'" Rendell said.

The region will be willing to present what it considers a "fair and good offer," to US Airways, he said, without going into further detail.

The airline seeks a $25 million, high-security facility that's one-story with at least 60,000 square feet on six acres. Such facilities are the nerve center of an airline, using sophisticated computers to monitor weather conditions, aircraft locations and flight plans in real time.

The airline has been using the US Airways control center at RIDC Park West in Findlay and the America West Airlines' control center in Phoenix since the carriers merged in September 2005. The Pittsburgh center employs 450, while the Phoenix facility has 175 workers.

Asked about the status of the other offers yesterday, Rendell repeated what he told the Pittsburgh Tribune-Review last week that the state has heard Phoenix is Pittsburgh's main competition.

"That's the buzz we've have that it's either Phoenix or Pittsburgh, but again, the buzz could be wrong," the governor said.

However, he also repeated his contention that if the region's offer is in the competitive range that US Airways almost has an obligation to pick Pittsburgh because of the region's loss of thousands of jobs and hundreds of flights during the airline's two reorganizations in bankruptcy.

"No city has suffered more than Pittsburgh from US Airways contraction," he said. "From a moral standpoint, I think they should keep that under consideration."



Ron DaParma can be reached at rdaparma@tribweb.com or 412-320-7907.

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http://www.post-gazette.com/pg/06318/738104-28.stm

Mellon plan takes two roads to growth
New CEO stays with money management, securities processing, Pittsburgh
Tuesday, November 14, 2006


Mellon Financial's CEO released the results of a nine-month-long companywide review yesterday.





By Dan Fitzpatrick
Pittsburgh Post-Gazette
The storied Mellon Financial reinforced its commitment to Pittsburgh yesterday as part of a nine-month-long companywide review conducted by new Chief Executive Officer Robert Kelly.

The report, unveiled to investors in New York, was Mr. Kelly's first significant move as CEO and contained no surprises.

Like his predecessor, Martin McGuinn, Mr. Kelly likes being both a money manager and a securities processor, believing that both business units are complementary, even as some investors have asked Mellon to choose one or the other. Mr. Kelly wants Mellon to improve its profit margins, do better in comparison with its peers, and become a bigger money manager -- it's currently ninth-largest in the United States.

But Mr. Kelly did not hint at any steps toward acquiring a large competitor to grow its money management business, and he said he wanted to pare expenses by $75 million to $80 million a year.

Part of the cost-cutting will involve the relocation of employees from high-cost to low-cost areas, such as Pittsburgh, where rents are considerably lower than in Boston or New York, Mellon's two other major locations.

There were no details on how many employees might move or where. "But Pittsburgh is a winner in this analysis," said Ken Herz, Mellon's spokesman.

At the same time, Mr. Herz acknowledged the possibility that some Pittsburgh jobs could move elsewhere once the final analysis is completed.

Mellon currently employs 6,200 locally.

In past years, Mellon transferred at least two dozen back-office jobs from Pittsburgh to Pune, India, where labor costs are even lower. Whether more positions could go from Pittsburgh to the operations center in India was unclear following yesterday's 2 1/2-hour presentation.

At one point yesterday, Mellon Vice Chairman James Palermo said a "full assessment of potential migration" is under way as the company examines its back-office operations in Pittsburgh, the United Kingdom and India. No service will move, he said, without the knowledge that equal service will be provided on the other end.

At another point in the presentation, Mellon Senior Vice Chairman Steve Elliott outlined a plan to increase the number of seats at Mellon's Indian operations center by 850, from 450 at the end of this year to 1,300 by 2009. But there was no detail about whether those would be new jobs or positions taken from Pittsburgh, New York or Boston.

Among U.S. cities, Pittsburgh's office rents -- $21 per square foot -- are much lower than rents in New York, Boston and London, which as a group average $64 per square foot. That should work in Pittsburgh's favor as Mellon looks to reduce its real estate expenses.

The company does not expect to shed more space locally following the expiration of its lease this year at Two Mellon Center, also known as the Union Trust Building. Mellon still has three buildings Downtown, including its headquarters at One Mellon Center, where Mellon recently extended its lease through 2028.

"They are going to stay in Pittsburgh and grow in Pittsburgh because of the lower-cost environment," said banking analyst Gerard Cassidy, who follows Mellon for RBC Capital Markets in Portland, Maine. Mr. Cassidy said the prospect of more back-office jobs moving from Pittsburgh to India is unlikely because "the cost advantage over Pittsburgh is not significant enough to justify moving it over there."

Mr. Cassidy, who was in New York for the Mellon presentation, heard no "shocking revelations," calling it a "blocking and tackling" strategy rather than a "Hail Mary pass." Mr. Kelly set a number of three-year goals designed to improve the company's investment performance, pretax margins, employee efficiency, international growth, revenues, expenses and earnings per share, compared with Mellon's peers.

Mellon, rumored in recent months as the potential buyer of two Boston mutual fund companies, MFS Investment Management and Putnam Investments, also will consider possible acquisitions but "we won't do ... dumb deals." Mr. Kelly said.

The various goals set yesterday by Mr, Kelly are "very reachable," said Mr. Cassidy, who argues that Mellon had been setting targets that were unattainable following the stock market swoon of 2000.

The Canadian-born Mr. Kelly, who arrived in February from Charlotte, N.C.-based Wachovia Corp., "brings a different approach," Mr. Cassidy added.

"A pragmatic, easy-going approach to the business. Over time, we believe they will be successful."


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(Dan Fitzpatrick can be reached at dfitzpatrick@post-gazette.com or 412-263-1752. )

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http://www.pittsburghlive.com/x/pittsburghtrib/business/s_480210.html

Bechtel to settle in Monroeville

By Sam Spatter
FOR THE TRIBUNE-REVIEW
Friday, November 17, 2006


With plans to relocate 290 employees from Schenectady, N.Y., to Pittsburgh, Bechtel Plant Machinery Inc. plans to set up its local headquarters in Monroeville.
The vacant three-story Bessemer and Lake Erie Railroad Co. building in Monroeville would be renovated and expanded to accommodate the relocated employees as well as 330 employees at Penn Center East in Wilkins Township.

Monroeville council on Tuesday approved plans by the Elmhurst Group of Pittsburgh to demolish a 16,500-square-foot section of the 145,000-square-foot building and build a 50,000-square-foot addition, said Elmhurst President William Hunt.

"Not only is this a good situation for Bechtel, but also for the community with the addition of new employees into the area," Hunt said.

Raymond Hildreth, director of real estate for Elmhurst, said it will double the existing parking lot to 808 spaces.

Hildreth said the building would house about 800 employees, with 80 employees -- or 10 percent -- moving in by August and 20 percent by August 2008. The remaining employees would relocate into the building later.

"We are not seeking any local tax incentives or subsidies," Hildreth said.

Jeremy Kronman, a vice president with CB Richard Ellis/Pittsburgh, who represents Bechtel, said the building won't contain nuclear materials or other hazardous items.

"This is not a Homeland Security site, and the building will have the normal security for an engineering office," he said.

Bechtel Plant Machinery operates under Bechtel National Inc., the government services arm of the Bechtel Group Inc., of San Francisco.

The company has a contract to design and procure hardware for the U.S. Navy's nuclear propulsion program, a Bechtel spokesman said. The Department of Defense two years ago awarded Bechtel Plant Machinery a $228 million contract to work on a nuclear propulsion system. Bechtel manages the project but does not manufacture the parts, which is subcontracted.

Bechtel Bettis Inc., which is part of Bechtel Corp., has a plant in West Mifflin that plant does work for the U.S. Navy and the Department of Energy.



Sam Spatter can be reached at sspatter@tribweb.com.

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http://www.post-gazette.com/pg/06321/739029-28.stm

Tech group seeks to spawn 80 startups a year
Friday, November 17, 2006

By Corilyn Shropshire, Pittsburgh Post-Gazette

One year and $425,000 later, local economic development officials have agreed that the best plan for growing Pittsburgh's technology industry is to create 80 new companies a year through 2015.

That would represent a huge jump from current levels of about 20 between the University of Pittsburgh and Carnegie Mellon University. But more startups are needed because Pittsburgh trails its peers in building its tech industry, said Donald Smith Jr., chairman of the Greater Oakland Keystone Innovation Zone, which commissioned the report. It was released yesterday .

Pittsburgh may be above the national average in spinning out companies from its universities, but according to the public and privately funded study, it has yet to create a critical mass of tech firms." What we've done is chosen to prioritize those actions that the board feels are the most immediate," Dr. Smith said.

The study, prepared by Columbus, Ohio-based research firm Battelle Institute and Santa Monica, Calif.-based think tank the Milken Institute, was expected to be unveiled to the public months ago, but was shrouded in secrecy as it was examined by more than two dozen experts culled from Pittsburgh's academic, business and nonprofit worlds.

The group pushed back the report's release date as they hammered out the details, choosing which of the studies' recommendations they could take on immediately and which would wait.

The report provides a road map for shedding Pittsburgh's smokestack roots and laying new ones in five areas of strength: information technology, alternative and clean energy, advanced materials, sophisticated electronics and robotics, and medical technologies.

Dr. Smith said the Keystone Innovation Zone is estimating that the blueprint's first steps will cost roughly $150 million. They will include raising public and private "seed" or "risk" funds used to help firms at their earliest stages; hiring additional experienced tech executives at local economic development groups to help guide upstart companies and developing a game plan for reeling-in larger "anchor" tech firms that will help jump start the fledgling industry.

Although not part of the initial steps, the costliest portion of blueprint is the roughly $600 million in public funds to be added to about $1 billion in private dollars to expand the Pittsburgh Technology Center.

While the bulk of the plan will channel money to the startup community, some also will go towards the universities, Dr. Smith noted.

"The region needs to have both a robust research presence but also robust business climate for startups to be founded funded and grow," Dr. Smith said.


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(Corilyn Shropshire can be reached at cshropshire@post-gazette.com or 412-263-1413.)

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http://pittsburgh.bizjournals.com/pittsburgh/stories/2006/11/13/daily34.html?surround=lfn

Google's Pittsburgh office opens
Pittsburgh Business Times - 3:47 PM EST Fridayby Jennifer Curry and Susan Paff
Google Pittsburgh officially opened its doors at Carnegie Mellon University on Friday -- the first university-based office Google has opened in the country.

The Mountain View, Calif.-based Web developer (NASDAQ:GOOG) announced plans last year to open an office in Pittsburgh. It also has a location at Arizona State University in Tempe, but the CMU office is the first to officially open.

"This is so important to CMU because of the educational opportunities this creates for us," said CMU president Jared Cohon. "We expect big things from the Google center. ... We all the sense that Pittsburgh is about to see some wonderful things in terms of tech-based employment."

Google Pittsburgh' s first employees began moving into the new center in April, but the company didn't complete construction on the building until Thursday.

The office itself is modeled after Google's corporate office in California. It comes complete with a giant Google bean bag chairs, darts shot at unaware workers, a pool table, and a real-time, scrolling screen that displays Google searches occurring around the world -- at about 12:30 p.m. Friday, people were searching for "Shakespeare's Queen," "cat's don't dance" and "your server is unavailable."

Google currently has 35 employees in the Pittsburgh office and has room to grow to about 100 employees. The company isn't certain how long it will take to get to 100, but it plans to add between eight and 10 people by January, according to Google spokeswoman Sunny Gettinger.

"We will be continuing to grow," said Andrew Moore, director of the Pittsburgh office.

The Google office will help the company recruit from Carnegie Mellon. Google, which has seen its employees reach 9,400 from 5,700 in the last year, is in a talent and acquisition mode, according to Alan Eustace, senior vice president of engineering and research.

"This is terribly important for the region," Cohon said. "A hundred jobs is a hundred jobs. We see this as just the beginning."

Projects the engineers at Google Pittsburgh are working on include making the search engine more user-friendly by better determining when advertisements should pop up, and how to make the search results more accessible and useful.

spaff@bizjournals.com; jcurry@bizjournals.com

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http://www.pittsburghlive.com/x/pittsburghtrib/business/s_480386.html

CMU googles it

By Joe Napsha
TRIBUNE-REVIEW
Saturday, November 18, 2006


In a building adjacent to where the U.S. Bureau of Mines explored excavation technology almost a century ago, Google Inc. is mining data on the cutting edge of information technology.
Google, the nation's leading online search company, opened a 20,000-square-foot office Friday in the Collaborative Innovation Center on the Carnegie Mellon University campus in Oakland.

Google has 35 employees in the office and intends to hire eight to 10 more early next year. The location overlooking Panther Hollow has room for about 100 employees, said Kamal Nigam, engineering manager.

The software engineers are busy analyzing text, making advertising more appealing to users and generally improving the product and technology, Nigam said.





The company's 30 software engineers in Oakland are working in an environment that is definitely not your father's office.

Want to play pool on your break, or board games with some buddies? No problem, there are accommodations for both. Want to take a jog around campus or Oakland on your lunch hour? Use the locker room and shower facilities just outside the office. If you don't feel like wearing a suit or tie to the office, don't worry -- it's not required.

And here's a kicker for any straight-laced boss: Google encourages its software engineers to talk to each other, said Andrew Moore, director of the office.

"We're always talking back and forth," whether it's with employees in the Oakland office or sites around the nation or world, said Moore, a former CMU computer science and robotics professor.

"Everyone shares an office. There's no single cubicle," Moore said.

Google's office opened in January at One Oxford Center, then moved in April to the new building owned by the Regional Industrial Development Corp. Construction on the space wasn't finished until Thursday, said spokeswoman Sunny Gettinger.

The company looks for talent locally and around the world, Moore said. For those with software engineering training, Google pays an average salary of $102,000, Moore said.

CMU President Jared Cohon said the Google office benefits Carnegie Mellon and Google. The university has the prestige of having such a company on campus and the opportunity for students to do internships, while Google can benefit from all the computer scientists at the university.

"This is a new model for university-company relationships," Cohon said.

The lure of working for Google was strong enough that it convinced Jeff Stewart, a 33-year-old software engineer, to move back to Western Pennsylvania from San Francisco last April.

"If you're a software engineer, this is the place to be. I've worked at a lot of places where they say they care, but at this place they really do," Stewart said, adding that bosses have made accommodations even when it hurt the bottom line.



Joe Napsha can be reached at jnapsha@tribweb.com or (412)-320-7993.

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http://www.post-gazette.com/pg/06324/739898-100.stm

Law may clinch Westinghouse expansion
Monday, November 20, 2006

By Tom Barnes, Post-Gazette Harrisburg Bureau

HARRISBURG -- Gov. Ed Rendell signed a bill today that is aimed at persuading Westinghouse Electric Co. to stay and expand in Pennsylvania by locating its new engineering campus, with at least 1,500 additional employees, in one of three southwestern Pennsylvania sites.

Flanked at a news conference by state Sen. Sean Logan, D-Monroeville, and Rep. Mike Turzai, R-Bradford Woods, Mr. Rendell noted that other states, especially North Carolina and South Carolina, are trying to woo Westinghouse out of Pennsylvania and said the new incentives in the bill could help keep it here.

"Westinghouse has not yet made a decision to stay in Pennsylvania, but we believe this (tax abatement bill) will increase the strong likelihood that Westinghouse will stay in Western Pennsylvania and add jobs,'' Mr. Rendell said.

No decision has been made yet on where Westinghouse will expand, said company spokesman Vaughn Gilbert, "but the governor and other elected officials, including [Allegheny County Chief Executive] Dan Onorato, have been highly supportive of our effort. We're in a growth business.''

A site somewhere near Charlotte, N.C., is the leading competitor to Western Pennsylvania, and Mr. Gilbert said an announcement is likely by the end of the year on where the new engineering campus will go. Observers believe the new bill and its incentives could clinch the deal for this region.

Mr. Turzai said three sites in the Pittsburgh area are under consideration for the Westinghouse expansion, which is needed because of expected growth in nuclear reactor orders, both domestically and possibly in China. One site is at the current headquarters in Monroeville, with others being at the Tech 21 industrial park in Marshall and at Cranberry Woods, in Butler County.

Mr. Logan said the Westinghouse expansion project is important because it involves well-paying jobs (up to $100,000 or so a year) that require technical, administrative and engineering expertise.

Mr. Gilbert said the company hired 800 new people last year and will hire 900 more this year. He also expects a minimum of 500 new workers in succeeding years, because of growing need for nuclear power and because a number of workers are ready for retirement.

The sale of Westinghouse, a former conglomerate whose nuclear power technology is used in half of the world's operating nuclear power plants, from British Nuclear Fuels PLC to Japanese electronics giant Toshiba was completed in October. Westinghouse has about 3,000 workers in the Pittsburgh area and 9,000 worldwide.

The bill signed by Mr. Rendell yesterday will create up to four "Strategic Development Areas'' around the state, where the state will give a 15-year abatement on sales taxes, corporate net incomes taxes and the corporate stock and franchise tax to larger companies willing to stay in the state.



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More details in tomorrow's Pittsburgh Post-Gazette.

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http://www.popcitymedia.com

Medrad hiring 80 locally, adding to 300 recent hires
MEDRAD, INC, a medical device manufacturer which doubled its revenues in the past five years, is hiring 80 local positions in engineering, IT, marketing and other areas. "The company is looking for exceptional talent to ensure its continued growth," says Luanne Radermache in press relations. For a complete listing click here.

Headquartered in Indianola with a 155,000 sf facility for production, research and testing in nearby RIDC Park in O'Hara Twp, MEDRAD hired 300 employees in the area in the past three months.

With annual sales surpassing $411 million, the company sells to hospitals and medical imaging centers in over 85 countries. MEDRAD has more than 1500 employees worldwide with 1100 in Pittsburgh. A new, 125,000 sf corporate center is being built in Marshall Twp. which is scheduled for completion in 2007. --TC

Source: Louanne Radermacher, MEDRAD, INC.

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http://www.pittsburghlive.com/x/pittsburghtrib/business/s_482691.html

Dominion to move 140 to North Shore


By Kim Leonard
TRIBUNE-REVIEW
Tuesday, December 5, 2006


Dominion Resources Inc. will relocate about 140 of its employees who now work Downtown and in Wilkinsburg to the D.L. Clark Building on the North Shore, a Dominion spokesman said Monday.
The Virginia-based energy company is signed a contract last week to occupy space on the fourth and fifth floors of the office building, spokesman Dan Donovan said.

About 100 employees will move there from the Liberty Avenue building known as Dominion Tower. Most hold corporate service positions, such as in accounting, and work for various divisions of Dominion, which provides electricity and natural gas in the Midwest, mid-Atlantic and Northeast.

The rest work for Dominion Retail, which runs the Dominion Peoples Plus electric and natural gas supply businesses in 11 states. They are in a building on Pitt Street in Wilkinsburg that will be sold as part of Equitable Resources Inc.'s planned acquisition of Dominion Peoples Gas, Dominion's local gas distribution company, Donovan said.

Dominion's lease in the Downtown tower ends in August, he said, and the workers probably will move from there in July. Dominion Tower opened as CNG Tower in 1987, with Consolidated Natural Gas and its local operating company, Peoples Natural Gas, occupying 214,000 square feet with 700 employees.

Dominion acquired CNG in 2000, and the building was renamed at that time, although Dominion in recent years has been pulling employees out of the region.

But Dominion Retail is expected to grow its presence here, Donovan said, and as many as 175 Dominion workers eventually could be in the North Shore building. Workers from the Wilkinsburg office are expected to move in March to the Clark building, where the Pittsburgh Tribune-Review has its offices.

Equitable, meanwhile, still is looking for additional office space for some of the employees it will bring on board after the Peoples acquisition, plus new hires, spokeswoman Patricia Kornick said yesterday.



Kim Leonard can be reached at kleonard@tribweb.com or (412) 380-5606.

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http://www.popcitymedia.com/timnews/41vivisimo.aspx

December 13, 2006
Vivisimo hiring 10 software and support sale engineers
Vivisimo, an enterprise search software company in Squirrel Hill best known for its search engine, Clusty, is hiring 10 software engineers and pre-sales engineers. Founded in 2002, Vivisimo has grown from seven employees to nearly 50 presently. ”The growth is from customer revenue and re-investment,” says President and CEO and co-founder Raoul Valdez-Perez. who was honored last month as Alumnus of the Year in the Engineering department at the University of Illinois.


Due to the recent and anticipated growth, Vivisimo is taking over additional office space in its building on the corner of Forbes and Murray—at least a third of its present square footage, estimates Valdez-Perez. Founded by three Carnegie Mellon University students who developed new technology to organize unwieldy web search results, the company’s mission is to “conquer information overload and harness the true power of search.”


Last week, they organized a search for the Iraq Study Group which allows readers to search by any keyword to find relevant document information.


This past year, Vivisimo was number two in a ranking of fastest –growing privately held Pittsburgh companies and was the winner in the IT category for the Tech 50, an annual award from the Pittsburgh Technology Council.--TC

Source: Rauol Valdez-Perez, Vivisimo




Photograph copyright © Tracy Certo

http://www.popcitymedia.com/galleries/Default/PGH%20Innovates/Issue%2041/vivisimo_300.jpg

[Evergrey]

http://www.popcitymedia.com/timnews/41ati.aspx

ATI hiring 150 more employees with $2.5 billion Boeing deal
Allegheny Technologies Incorporated will be hiring in 2007 as a result of the $2.5 billion agreement with Boeing announced in October. The nine year deal, which kicks off in 2007 and goes through 2015, is the largest supplier agreement ever for the Pittsburgh-based specialized metals company. “This is mostly new business,” says Dan Greenfield spokesperson. “That’s the significance of it. To put it in perspective, ATI is the premiere supplier of premium titanium alloys and nickel-based super alloys for jet engines,” he says. “This deal makes us a large supplier of titanium to the airframe market.”

And it means new jobs for a company that’s been growing. “We’ve been hiring,” says Greenfield. “We have 3,135 employees in Western PA and by the end of this year we expect to have 460 new employees in Western PA with plans to hire another 150 in 2007.”

In addition, although the company has yet to announce specifics, a number of operations in the region will need increased capital investments to facilitate this deal, he adds.

ATI had annual revenue of $4 billion for the four consecutive quarters ending June, 2006. The company, which has approximately 9,300 full-time employees globally, is one of the largest special metals producers in the world.--TC

Source: Dan Greenfield, ATI

Image courtesy of Allegheny Technologies


http://www.popcitymedia.com/galleries/Default/PGH%20Innovates/Issue%2041/ATI_logo_300.gif

[Evergrey]

http://pittsburgh.bizjournals.com/pittsburgh/stories/2006/12/11/daily18.html?t=printable

Pittsburgh to host RoboBusiness in 2008
Pittsburgh Business Times - 10:52 AM EST Wednesday
Pittsburgh will play host to the RoboBusiness Conference and Exposition in 2008, which will return to the city after a year in Boston, the Technology Collaborative said Wednesday.

When Pittsburgh played host to the 2006 event, more than 900 roboticists, industry analysts, venture capitalists and military representatives attended to check out the latest in robotics.

Dan Kara, the RoboBusiness conference chairman and president of trade show and publication company Robotics Trends Inc., said Pittsburgh was the right choice.

"The 2006 RoboBusiness conference attracted the most attendees to date and the Pittsburgh location was instrumental in drawing industry-leading exhibitors and speakers," he said in a statement.

The Technology Collaborative, an economic development group based on Pittsburgh's North Side, also announced that 318 jobs were created by digital and robotics companies in the region in 2006.

In addition, 12 companies chose southwestern Pennsylvania to establish and/or expand their operations, the Tech Collaborative said.

[Evergrey]

well, this is infuriating... I can't really blame Hilary... cuz I would want Arlen Specter to do the same thing for PA... but yeah... she's definately not getting my vote in 2008...

http://www.post-gazette.com/pg/06348/745966-28.stm

N.Y. senators block 260 jobs from coming to Monroeville
Clinton, Schumer push Bechtel to review move from Schenectady
Thursday, December 14, 2006

By Dan Fitzpatrick, Pittsburgh Post-Gazette

New York's two U.S. senators, Democrats Hillary Rodham Clinton and Charles Schumer, are blocking the planned transfer of 260 engineering jobs to Monroeville and pressing Bechtel Plant Machinery Inc. to keep the positions in Schenectady, N.Y.

Bechtel, which employs 550 in Wilkins, signed a 15-year lease last week for 120,000 square feet in Monroeville, where it plans to move local employees starting in 2007. But any talk of moving its eastern New York employees to the same location is on hold until at least February as the company waits for a counterproposal from officials in Schenectady.

The company's delay is the result of political pressure applied by the two powerful senators and U.S. Rep. Michael McNulty, also from New York. The three asked Bechtel to reconsider a cost-saving decision announced in October to shift the bulk of its work from Schenectady to the Pittsburgh area, saying the move was made without consulting Congress, the state of New York or the city of Schenectady.

Bechtel agreed to hold off for 60 days -- a period that expires in early February. "We are holding good to our word," Bechtel spokesman Mike Kidder said yesterday.

Bechtel Plant Machinery, a unit of the $18 billion San Francisco-based engineering and construction giant Bechtel Corp., maintains nuclear propulsion components for ships operated by the U.S. Navy. It works closely with a separate West Mifflin-based unit, Bechtel Bettis, that conducts nuclear-propulsion research and development for Navy warships and provides technical support to the Navy's fleet of nuclear-powered submarines and aircraft carriers.

Both units at one point were part of Westinghouse Electric's old Pittsburgh-area conglomerate. Bechtel acquired the units from CBS Corp in 1999.

Earlier this year, Bechtel Plant Machinery officials began looking at the possibility of consolidating its Wilkins and Schenectady operations in one city, and on Oct. 10 announced plans to move about 260 engineering and other jobs from Schenectady to the Pittsburgh area, leaving behind about 70 jobs in Schenectady.

Hoping to reverse Bechtel's decision, Schenectady Mayor Brian Stratton enlisted the help of Sens. Clinton and Schumer, who pressed Bechtel to keep its eastern New York operation intact.

Bechtel subsequently agreed to the 60-day delay despite concluding that consolidation in Pittsburgh "is in the long-term best interest of our clients, the United States Navy and the taxpayers," as Bechtel executive T.F. Hash wrote in a recent letter to the senators.

"I am, however, mindful of the difficulties this decision has placed on our employees and the community," Mr. Hash wrote. Delaying any action by 60 days will allow Schenectady and the state "an opportunity to serve up economic proposals that would offset the savings a consolidation in Pittsburgh would yield," he wrote.

Officials with the offices of Sen. Clinton and Sen. Schumer could not be reached for comment.

Despite the political back-and-forth in New York, Bechtel proceeded late last week with the signing of a new 15-year lease with The Elmhurst Group for space in a Monroeville building once owned by the Bessemer and Lake Erie Railroad.

Elmhurst, a Downtown-based developer and property owner , purchased the Jamison Lane building last week from Canadian National Railroad, paying about $5 million. Gerry Dudley and Jeremy Kronman with CB Richard Ellis/Pittsburgh negotiated the 120,000 square-foot lease for Bechtel.

For now, the space will be designed for the company's 550 Pittsburgh-area employees, who currently work at Penn Center East in Wilkins. But Elmhurst President William Hunt said the site can accommodate more people if Bechtel goes forward with the consolidation of its operations in the area.


--------------------------------------------------------------------------------

(Dan Fitzpatrick can be reached at dfitzpatrick@post-gazette.com or 412-263-1752.)

[Evergrey]

http://www.pittsburghlive.com/x/pittsburghtrib/business/s_484050.html

Region nets 282 high-tech jobs

By Kim Leonard
TRIBUNE-REVIEW
Thursday, December 14, 2006


Digital and robotics companies in the region created 318 jobs in fiscal 2006, though some jobs were lost, the North Shore-based Technology Collaborative said Wednesday.
Also, 12 companies chose to set up or expand their businesses in Southwestern Pennsylvania over the last year, said the statewide economic development organization, which helps to fund the growth of robotics, cyber-security and digital technologies ventures.

Most of the jobs -- in hardware, electrical, mechanical and software engineering and other fields -- are at several smaller companies in the region that the collaborative works directly with, President and CEO David Ruppersberger said yesterday as he disclosed the organization's annual job figures.

"We are pleased with these numbers because they show that we continue to create high-paying jobs, averaging over $70,000 per year, in the region," he said. The collaborative doesn't break out data for individual companies.





Still, the region needs to create more companies and more jobs, Ruppersberger said. He cited the growth of Wilkins-based Vocollect Inc., which makes voice-directed, wearable computers, into a $100 million company with 350 employees as "a perfect example of why we think tech companies are absolutely essential to the future of the region."

The Technology Collaborative said a total of 1,642 digital and robotics-related positions have been created at the companies it surveys since 2000, although that translates to 891 net positions in the last six years because some companies downsized, ceased business or moved.

The fiscal year that ended in June actually saw 36 jobs lost at various employers, bringing the net job gain to 282, compared to 304 for fiscal 2005.

The Technology Collaborative was founded two years ago in a merger of the state-supported Pittsburgh Digital Greenhouse and the Robotics Foundry, and had 54 member companies at the end of fiscal '06.

When the Digital Greenhouse was begun in 1999 to create a microchip design industry in Western Pennsylvania, the state announced a goal of creating 1,500 jobs in three years through a partnership of major electronics industry companies and three major universities (Carnegie Mellon University, the University of Pittsburgh and Pennsylvania State University).

However, a slump in the semiconductor industry impeded progress toward that goal.

Now, the combined organization works with seven universities statewide and directs state, federal, foundation and member-provided money toward developing technologies for military, commercial and health care uses. Its National Center for Defense Robotics, for example, funded 14 projects last year, totaling $4.3 million.

Ruppersberger also said the fifth annual Robobusiness Conference and Exposition, "the premier business trade show for commercial robotics," will be held in Pittsburgh in spring 2008.

More than 900 roboticists, industry analysts, venture capitalists and military representatives attended the event when it was held in the city this year.



Kim Leonard can be reached at kleonard@tribweb.com or (412) 380-5606.

[edncc1701d]

N.Y. senators block 260 jobs from coming to Monroeville
Clinton, Schumer push Bechtel to review move from Schenectady

Where are our elected officials?

Although it would never happen… New York state can keep the Bechtel jobs if Pittsburgh can keep the BONY-Mellon corporate headquarters!

[Evergrey]

a piece from Expansion Management

http://www.expansionmanagement.com/smo/newsviewer/default.asp?cmd=articledetail&articleid=18208&st=3

Pittsburgh Metro Business Climate Attracts Expanding Companies

MEDRAD, Steelite International make substantial investments in the metro area.
[ 12/21/2006 ] By: Ken Krizner, Managing Editor


Perhaps no other region in the country has reinvented itself more thoroughly, or more dramatically, than the Pittsburgh metro area has during the past 20 years.

The Southwest Pennsylvania region, which was once dependent on heavy manufacturing and steel production, has transformed itself into an economically diverse hub, combining a tradition of innovation with emerging industries, such as robotics and life sciences, and world-class universities.

That transformation was evident in November when Carnegie Mellon University and the University of Pittsburgh Medical Center (UPMC) announced the signing of a five-year, $10 million agreement for sponsored research in computer science, engineering, robotics and other advanced technology areas related to health care. The collaboration begins in January.

The universities expect to explore projects involving technology-enhanced training and simulation, secure access to health care information, medical robotics and medical image processing.

“We believe that this partnership will help provide our researchers with the opportunity to develop new technologies and transfer them quickly into practice,” said Mark S. Kamlet, provost and senior vice president for Carnegie Mellon.

The Pittsburgh metro area, working in concert with the commonwealth of Pennsylvania, has been successful in attracting knowledge-based expansion and relocation projects, thanks in part to the business climate. That climate helped convince medical imaging device manufacturer MEDRAD Inc. to invest substantially in the Pittsburgh metro during the past 13 months.

In June, the company announced a $45 million expansion project in Clinton Township for a light manufacturing facility. That expansion is on top of a project, announced in November 2005, that will result in 400 new jobs.

When combined, the two expansion projects will produce more than 900 new jobs for the metro area during the next several years.

In Clinton Township, MEDRAD will occupy 120,000 square feet in the Victoria Road Business Park.

John P. Friel, president and CEO of MEDRAD, said the company considered many locations for the project, including in China and Mexico.

“When we considered the advantages of the [Clinton Township] location, especially the low startup risk, access to a highly trained work force, the ability to tap into the expertise of our current employees, along with our track record in southwestern Pennsylvania, it emerged as the best place for us,” he said.

MEDRAD will maintain its two existing locations in the metro and continue moving forward on a $28 million, 125,000 square foot corporate center at the Tech 21 Research Park in Marshall Township, the project announced more than a year ago. MEDRAD is the anchor tenant of the 233-acre, mixed-use park.

MEDRAD purchased enough land at Tech 21 to accommodate future expansion projects.

Another industrial park in the metro, Millennium Technology Park in Lawrence County, nabbed its first tenant thanks to nearly $400,000 in incentives from the commonwealth.

Steelite International USA Inc. broke ground on a manufacturing plant in October that will create at least 45 jobs within three years when the tableware manufacturer’s new Western Hemisphere headquarters facility begins operations.

The Lawrence County Economic Development Corp. (LCEDC) worked with the commonwealth to secure the incentive package, which includes a $308,000 loan through the Machinery and Equipment Loan Fund and $31,500 in Customized Job Training funds.

Two years ago, Pennsylvania awarded LCEDC $7.5 million in funds from the Business in Our Sites program, a loan and grant pool, to develop Millennium Technology Park. The investment helped offset the land acquisition and construction costs for an access road, site excavation and grading, wetland assessment and mitigation, installation of sewer lines and utilities, and related engineering activities.

[Wheelingman04]

^ Nice article.

[Evergrey]

http://www.post-gazette.com/pg/07001/750534-100.stm

Phoenix doubles bid for US Airways jobs; Pa. jobs at stake
Monday, January 01, 2007

The Associated Press

PHOENIX -- Phoenix has more than doubled its offer for a US Airways flight operations center, promising incentives and tax breaks that could save the company as much as $36 million over the next 25 years.

The bulk of the additional incentives come in the form of an extremely low-interest loan that is estimated to save the airline more than $22 million, according to documents released by the city.

The deal also includes cash savings in the form of property-tax waivers and low-cost land leases.

"I think Phoenix has put together a very strong, competitive assistance package," said Bruce MacTurk, the city's development program manager.

In October, Pennsylvania Gov. Ed Rendell publicly announced the details of Pittsburgh's initial offer, which was said to contain $16.25 million in grants, tax credits and loans.

The airline will not be able to take advantage of the Phoenix offer unless it actually builds the new center in the city and brings new jobs to the area.

Spokesmen for the city council and Mayor Phil Gordon did not return phone calls by The Associated Press on Sunday.

Tempe, Ariz.-based US Airways currently has two operations centers, in Phoenix and Pittsburgh, after last year's merger of America West and the old US Airways. There are 150 workers at the Phoenix center and about 450 in Pittsburgh.

Together, those employees manage the carrier's 950 daily flights, schedule and support flight crews, help coordinate passenger rebooking after flight cancellations and delays, and handle aircraft changes when maintenance issues arise.

But the airline now wants to consolidate those two separate centers into one.

Phoenix, Pittsburgh and Charlotte, N.C. are vying for the new center.

City officials said US Airways could make a decision at its Jan. 26 board of directors meeting and announce its choice on Feb. 1.

The airline would not comment publicly on the selection process or any of the packages. It would only confirm that there is a January meeting and that they have said all along that a decision would be announced in February.

"We'll tell everyone at the same time," spokesman Morgan Durrant said.

Proposals from all three cities were due in mid-October.

The airline met with economic-development officials in all three states during the following week, MacTurk said.

Phoenix does not plan to give the airline cash up front or take money from the city's general fund, which is used to pay for basic services, including police and firefighting equipment.

At this point, it's not clear whether Pittsburgh and Charlotte have also submitted additional information to the airline.

Rendell's office did not return a call last week seeking comment on whether that package has been revised. Charlotte officials have not released the details of their offer.



--------------------------------------------------------------------------------
( Copyright 2006 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.)

[themaguffin]

The region should have the most competitive incentives out there. However Phoenix is going beyond the norm and the insane corporate wellfare is ridiculous. USEless has shown their value and values to the region enough. If they don't like Pittsburgh's offer, than oh well.

Maybe since they want to buy Delta they can pay their debt now.....

[Evergrey]

http://www.post-gazette.com/pg/07003/750749-28.stm

The local economy in 2007: Steady improvement seen for Pittsburgh region
Wednesday, January 03, 2007

By Joyce Gannon, Pittsburgh Post-Gazette
Despite a sluggish housing market that will continue to hinder the economy in 2007, the Pittsburgh region can expect steady economic gains this year, according to several forecasts.

"I'm not looking for any boom," said Norman Robertson, former chief economist for Mellon Bank who is the economic adviser for the Smithfield Trust Co. "But I do see another year of moderately good economic growth."

Small gains in employment, capital spending and consumer and government spending should offset the fall-off in new home construction, Mr. Robertson said.

PNC Financial Services Group's latest regional economic update echoes Mr. Robertson's outlook.

In its November report, PNC forecast "a course of slow but steady improvement" for the metro area that includes Allegheny, Armstrong, Beaver, Butler, Fayette, Washington and Westmoreland counties. While it expects new single-family housing permits to drop by 3.5 percent and for total home sales to plummet by 6.6 percent in 2007, the region did not experience the same housing boom as much of the United States did in recent years so it should "suffer less fallout from a cooling housing market than will other areas," PNC said.

Commercial construction activity, including a mix of projects in Downtown, should help offset the declines in single-family home sales, PNC said.

On the payroll front, PNC said manufacturing employment will probably drop by less than 1 percent in 2007. But growth in service industries should give the economy a boost with jobs in finance, health care and education expected to grow by about 2 percent.

Mr. Robertson also is looking for gains in retail sales and consumer spending.

"People always underestimate the resilience of the national and local economy; I think there'll be a good chance both will probably be a little better than most people expect."


--------------------------------------------------------------------------------

(Joyce Gannon can be reached at jgannon@post-gazette.com or 412-263-1580. )

[Evergrey]

http://www.post-gazette.com/pg/07003/750851-53.stm

City shifts money to support Pittsburgh Technology Center
Wednesday, January 03, 2007

By Rich Lord, Pittsburgh Post-Gazette



A proposed expansion of the Pittsburgh Technology Center could get a $13.5 million infusion of grants and loans under legislation submitted to City Council yesterday.

Mayor Luke Ravenstahl's administration has proposed that $2 million in federal grants for revitalizing old industrial sites be shifted to the South Oakland site from stalled development efforts in North Point Breeze and Chateau. That complements another $1 million in so-called brownfield grants already slated for the site.

Under federal rules, a condition for getting the grants is taking out around $11.5 million in loans from the Department of Housing and Urban Development. The city's Urban Redevelopment Authority is applying for those loans.

The money will go toward three parking garages and the relocation of a street to prepare for as many as five new office buildings on some 30 acres.

"It's absolutely in a place where Pittsburgh's new economy can grow," said URA Executive Director Jerome Dettore. "They're bursting at the seams in Oakland. ... This is the location where you can do the most economical building development to support research [companies] coming out of the universities and hospitals."

The URA continues to talk with Cleveland-based Ferchill Group, which wants to build a 160,000-square-foot lab and office building on the site. That would be a first step in the development of 1 million square feet of labs, offices, and supporting retail and services businesses.

URA board Chairman Yarone Zober said the agency has heard from other developers interested in building at the Technology Center, but they need more parking than currently exists.

The projects that would lose brownfield funding are the J. Allan Steel site in Chateau, for which the URA could not find a developer, and the renovation of a building at the Lexington Technology Park, which wasn't financially feasible, Mr. Dettore said. He said federal regulators would have to approve the shifts.

In March, council approved a plan to build some $43.3 million in new infrastructure at the Pittsburgh Technology Center, including the garages and road shift. Of that, $25 million is to be raised through tax-increment financing, or TIF, in which future property and parking tax revenue is pledged to pay for development.

Mr. Dettore said the proposed new grants and loans are part of that package, and that some of the TIF proceeds would pay off some of the HUD loans.

Council could vote tentatively on the grants and loans Jan. 10, with a final vote possible Jan. 16.


--------------------------------------------------------------------------------

(Rich Lord can be reached at rlord@post-gazette.com or 412-263-1542. )

[Evergrey]

http://www.bizjournals.com/pittsburgh/stories/2007/01/01/daily8.html?t=printable

Boost in bid for US Airways center a response to Charlotte?
Pittsburgh Business Times - 4:27 PM EST Tuesday
Phoenix has more than doubled its initial proposal to attract a 600-employee US Airways Group Inc. flight operations center, apparently in response to Charlotte's offer.

Charlotte Aviation Director Jerry Orr said he thinks the Arizona-based airline took Charlotte's proposal to Phoenix and said, "Measure up, boys."

Orr adds, "It doesn't bother me because I'm old, experienced and a realist."

He and other Charlotte officials have declined to disclose details of their proposal, citing state laws that allow economic-development proposals to remain secret. Details of the Pittsburgh and Phoenix bids have been made public.

US Airways (NYSE:LCC) has flight-operations centers with 150 employees in Phoenix and 450 in Pittsburgh. Last fall, the airline invited those two cities and Charlotte to submit offers in October for a combined, 600-employee center.

The airline is telling the three cities that its proposed takeover of Delta Air Lines Inc. (Pink Sheets:DALRQ) is not affecting its plans for the new center, Orr said. But everyone realizes a merger of the two giant airlines would be a dramatic change, he added.

If US Airways acquires Delta, Orr predicts US Airways will put the center in Atlanta, where its largest hub would be located. Delta is aggressively opposing the US Airways takeover bid, however.

Phoenix's package of incentives and tax breaks could save US Airways as much as $36 million over the next 25 years.

US Airways has said it will announce its decision in February.

In October, Pennsylvania Gov. Ed Rendell announced the details of Pittsburgh's initial offer, which included $16.25 million in grants, tax credits and loans.

[SuperstarMark]

I didn't want to start a new thread on this, but here's an interesting article in today's Pittsburgh Tribune-Review about the condo boom downtown. Essentially it asks if the average downtown worker could afford the $300,000 starting price for these new developments.


Alrighty then.

[Evergrey]

You're not Mayor Luke Ravenstahl, are you SuperstarMark? :) Congratulations!

[ColDayMan]

30? I thought you were 40?!?!

[Evergrey]

http://www.post-gazette.com/pg/07007/751689-28.stm

Regional Insights / Harold D. Miller: City's future is in 'angels'
Sunday, January 07, 2007

Most of the large employers in the region didn't move here; they started here decades ago as entrepreneurial companies. Similarly, one of our best opportunities for future job growth will come from startup companies being formed here today. But small companies can grow into large companies only if they get the financial backing they need, particularly seed and venture capital.

Last year was a banner year for Pittsburgh-area entrepreneurs seeking venture capital. As of the third quarter, more than $220 million in venture capital investments had been made in the region's firms, the third-highest level in the past decade. Although that's still smaller than in many other regions, it's more than in Houston and Portland, Ore., and almost as much as in Atlanta, Chicago and Minneapolis/St. Paul.

Even more impressive is that the Pittsburgh region had the largest growth in venture capital investments of any region in the country over the past year. Average quarterly venture capital investments in local firms during the first nine months of 2006 were nearly quadruple the level in 2005. In contrast, data from the PricewaterhouseCoopers MoneyTree Survey show that venture capital investments in regions such as Boston, San Diego and Silicon Valley increased only 20 percent or less in 2006.

True, nearly half -- $100 million -- of the venture capital investment in Pittsburgh in 2006 went to one firm: Targe Energy Coal LLC, a coal mining, gas drilling and coal reclamation company based in Aspinwall. But even without that one large investment, Pittsburgh still had a bigger increase in venture capital investment than almost any other region in the country. Investments in such companies as BPL Global, Cohera Medical, HyperActive Technologies, Plextronics and Precision Therapeutics demonstrate the region's diverse strengths in fields ranging from advanced materials and biotechnology to energy and information technology. In fact, over the past year, Pittsburgh had the largest increase in the number of firms receiving venture capital of any region in the country.

Can the region keep up this pace? The good news is the region has a wealth of research and development assets in both universities and private corporations, and we are seeing a growing number of startup firms commercializing university-developed technologies, thanks to the combined efforts of the universities and organizations such as Innovation Works, the Technology Collaborative and the Life Sciences Greenhouse.

However, formal venture capital funds are increasingly focusing on later-stage venture funding rather than early-stage financing. As a result, a startup company may never reach the point where it can qualify for venture capital unless it can find early-stage funding from another source.

What's the answer to the early-stage capital gap? Angel investors -- high net-worth individuals making investments of $25,000 to $250,000 in startup companies. In addition to a number of individual angel investors, the Pittsburgh region is fortunate to have a professionally managed angel network. Blue Tree Allied Angels (www.bluetreealliedangels.com) has 43 current angel members and has invested $3.8 million in 10 companies to date. But Blue Tree needs more angel investors to join its ranks.

Pittsburgh also needs a professionally managed angel fund so that high net worth individuals who don't have the time to participate in an angel network can still make early stage investments. Innovation Works (www.innovationworks.org) has been working to catalyze creation of such a fund, and the appointment of a fund manager is expected soon. Although $2 million has been assembled to start the fund, success will depend on finding additional individuals willing to invest.

If we want more startup companies, we will need more angel investors. Although angel investing is risky, if done properly, investors can make significant returns on their money and help grow the region's economy at the same time.



--------------------------------------------------------------------------------

(For more insight on the sources of growth in the region's economy, visit www.PittsburghFuture.com. Harold D. Miller is president of Future Strategies LLC, a management and policy consulting firm based in Pittsburgh, and publishes www.PittsburghFuture.com, an Internet resource on regional economic development issues. His column appears monthly. )




Harold D. Miller, former president of the Allegheny Conference on Community Development, manages Pittsburgh's Future LLC, a regional economic development policy initiative that publishes www.PittsburghFuture.com. His column looking beyond local statistics for insights into the regional economy appears monthly.

[Evergrey]

This is a pretty lame "article", but it's nice to see Pittsburgh continue to get recognition for its tech sector.

From Wired magazine's "Top 10 Tech Towns"

"PITTSBURGH
Come for the country's top-ranked computer science school; stay for the robotics startups that Carnegie Mellon alums are founding. If androids aren't your style, try for a gig at Google's new engineering office."

The other 9 are: San Francisco Bay Area, Seattle, Los Angeles, Austin, Orlando, Raleigh-Durham, NYC, Boston, DC.

So we're the only city in the Interior Northeast / Midwest on the list... interesting.
http://www.wired.com/wired/archive/15.01/geekcities.html

[themaguffin]

it borders on silly, but I like because you as you mention, Pgh is on there. Basically they took generally recognized top 10 tech towns and had fun with it.

So we're the only city in the Interior Northeast / Midwest on the list... interesting

PLease please please don't say midwest. I am not up for that discussion again. :slob:

[Evergrey]

I'm not calling Pittsburgh Midwest... I'm calling Pittsburgh Interior Northeast (much like Buffalo, Rochester or... Altoona, State College, etc)... Pittsburgh is definately not Midwest... but it certainly a much different animal than the East Coast cities like DC and NYC... I just found it interesting that Pittsburgh stood out compared to its "peer" cities that have had traditionally similar economic and demographic histories like Cleveland, Cincinnati, Detroit, St. Louis, Buffalo, etc. Pittsburgh is the only city of this "type" on the Wired list. The other cities are part of BosWash megalopolis, the South or the West Coast.

[themaguffin]

Because none of those cities have CMU. And frankly Pitt contributes significantly as well.

[SuperstarMark]

That's pretty cool - how come Pgh. didn't get a WiFi rating, with its free 2-hour accessability downtown.



This is a pretty lame "article", but it's nice to see Pittsburgh continue to get recognition for its tech sector.

From Wired magazine's "Top 10 Tech Towns"

"PITTSBURGH
Come for the country's top-ranked computer science school; stay for the robotics startups that Carnegie Mellon alums are founding. If androids aren't your style, try for a gig at Google's new engineering office."

The other 9 are: San Francisco Bay Area, Seattle, Los Angeles, Austin, Orlando, Raleigh-Durham, NYC, Boston, DC.

So we're the only city in the Interior Northeast / Midwest on the list... interesting.
http://www.wired.com/wired/archive/15.01/geekcities.html

[biscuit]

That's pretty cool - how come Pgh. didn't get a WiFi rating, with its free 2-hour accessability downtown.

Maybe because there is (yet) no open access wi-fi coverage in Oakland where it's badly needed.

[Evergrey]

well, Wired magazine had a set of 8 indeces... and kinda randomly selected a different 3 for each city... so Pittsburgh got comic book stores, engineering schools and circuit city stores... while San Fran got wifi, craigslist and dorkbot meetings... it's really a pretty silly article and i wouldn't read much into it... who knows if they even really rated these cities on all 10 indeces...


as for Oakland wi-fi... i know wi-fi is available at the new Schenley Plaza... but perhaps its only available to Pitt students/faculty?

[Evergrey]

http://www.post-gazette.com/pg/07012/753170-28.stm

Steady improvement forecast for region's economy
Friday, January 12, 2007

By Patricia Sabatini, Pittsburgh Post-Gazette

Pittsburgh's economy will continue to show slow but steady gains in 2007, aided by construction of a new slots casino and Downtown redevelopment projects and continued growth in the finance and health care sectors a top local bank economist said yesterday.

"I think this region has finally gained some traction," Stuart Hoffman, chief economist for PNC Financial Services Group, said during a packed Economic Club forecast luncheon at the Omni William Penn Hotel, Downtown.

Mr. Hoffman expects the region's jobless rate to hold fairly steady this year at just under 5 percent and for the area to add roughly the same number of jobs as it did in 2006, which is on pace to add about 10,000 jobs, the strongest showing since prior to the 2001 recession.

"With any luck, the region should see continued growth in 2007 and 2008," Mr. Hoffman said, noting that even the region's manufacturing sector, which has continued to shed jobs, should see layoffs ease.

Nationally, Mr. Hoffman projected growth to slow, but said the economy should avoid a recession. He's forecasting gross domestic product, a broad measure of economic activity, to rise 2.4 percent this year, down from an estimated 3.3 percent for 2006 when the final tally is in, and for inflation to ease to 1.9 percent from an estimated 3.3 percent for all last year . He expects the nation's unemployment rate to remain in the 4.7 percent to 4.8 percent range.

Further declines in housing this year will be the trigger for an interest rate cut by the Federal Reserve in May and again later in the year, setting the stage for stronger economic growth in 2008, said Richard Hoey, chief economist at Mellon Financial Corp. and another of the lunchtime presenters. "I think statements that the housing problem is all over are wrong," he said.

As for the global economy, which has been growing in recent years at the fastest clip since the 1970s, the expectation is for the expansion to continue this year at a slightly slower pace, Mr. Hoey said. The weakest sector worldwide will be the U.S. housing market, he said.

Mr. Hoey, who also serves as chief investment strategist for Mellon's Dreyfus mutual fund unit, believes the darling of the U.S. stock market this year will be the "supercap" stocks -- the largest 25 to 50 multinational corporations -- which over the last few years have underperformed the overall market.


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(Patricia Sabatini can be reached at psabatini@post-gazette.com or 412-263-3066.)

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this article on Monroeville's economy has a few tidbits on the Bechtel transfer of 300 jobs from NY... which is currently on hold due to Senator Hillary

http://www.pittsburghlive.com/x/pittsburghtrib/news/cityregion/s_488591.html

Monroeville shopping for more diverse economy

By Brian Bowling and Bonnie Pfister
TRIBUNE-REVIEW
Monday, January 15, 2007


Even if Westinghouse Electric Co. should decide to build a new nuclear engineering facility in Butler County rather than expand its headquarters in Monroeville, the onetime stagecoach stop east of Pittsburgh is making strides to diversify its retail-heavy economy.
Long known for its shopping mall -- said to be the nation's biggest when it opened more than 35 years ago -- Monroeville is fighting hard to hang onto its 1,800 high-paying Westinghouse jobs and grab at least 1,000 more the firm says it intends to add in the next decade.

Westinghouse is mulling over whether to expand on Northern Pike in Monroeville or to build a facility on Route 228 in Cranberry, Butler County, to keep up with growing domestic and international demand for nuclear power plants. Company spokesman Vaughn Gilbert said a decision will come no later than March 15, and perhaps before the end of January.

Gilbert said the location of CEO Stephen Tritch's home near the Allegheny-Butler county line -- within seven miles of the Cranberry site, compared with nearly 30 miles from Monroeville -- is "absolutely irrelevant" to the decision.





Regardless of what Westinghouse decides, over the next few years Bechtel Plant Machinery will move its 550 nuclear propulsion design and support operations workers from the Penn Center East development in Wilkins to the former U.S. Steel Research Center in the old Bessemer & Lake Erie Railroad Building on Monroeville's Jamison Lane.

The Elmhurst Group development company bought the building for $5.2 million last month and plans to expand the facility by nearly 40 percent, to almost 180,000 square feet. Bechtel also hopes to move 330 workers from Schenectady, N.Y., to that building, but a decision isn't due for several weeks.

Shawn Bannon, spokesman for the Allegheny Conference on Community Development, said such jobs fit his group's plan to develop the area's advanced manufacturing and materials sector. The Allegheny Conference focuses on recruiting manufacturing firms but supports Pittsburgh's emergence as an engineering hub.

"We really have the regional infrastructure to support companies like Westinghouse and Bechtel," Bannon said.

The Pittsburgh area is something of a center for nuclear power design and is becoming a hub for chemical research and development, Bannon said. Most engineers not only can jump between companies in the same industry but also between industries, so the chances of retaining engineers once they move here is good, he said.

Elmhurst Group president Bill Hunt called Bechtel's possible consolidation of Schenectady workers a homecoming of sorts, since Bechtel was part of the original company George Westinghouse founded in Pittsburgh in 1867.

"At the end of the day, a lot of these companies are tied to people in the area," he said. "It's very much a people-driven decision."

Hunt said the historical ties are a factor, along with engineering schools, work force and amenities.

"This region is moving more toward engineering," Hunt said.

Although the engineering work does not directly replace the blue-collar jobs the region has lost, the positions should have staying power. Companies move assembly-line operations repeatedly to take advantage of tax incentives, lower labor costs and lax environmental regulations, but their engineering divisions tend to put down permanent roots, Hunt said.

Smaller nuclear engineering firms could follow suit, he said. Like computer programmers in California's Silicon Valley, or furniture makers in High Point, N.C., professionals and skilled workers tend to migrate to locations where companies in the same industry congregate.

Joel Palaschak, spokesman for the municipality of Monroeville, said although Westinghouse and Bechtel are the big news lately, other nonretail employers in Monroeville are doing well.

He pointed to software consulting firm RJ Lee Group, PPG's chemical research and development unit, and teleconferencing equipment maker Compunetix as among those that are adding to the municipality's skilled work force.

Compunetix, whose clients include major telephone service providers in the United States and abroad, employs 263 people, up nearly 10 percent from last year, marketing director Robert Haley said. At least 80 percent of those workers are engineers making $50,000 to $100,000 a year.

Growth has been similar at circuit-board maker Compunetics -- spun off from Compunetix around 2000 -- which employs 80 people in Monroeville.

Haley said that in his 10 years in the municipality, he has seen employment make an about-face from the loss of professional jobs as the old Westinghouse divested itself of divisions and jobs through the mid-1990s.

"Monroeville gets hung with the retail moniker, but I don't see that as being the growth engine anymore," said Haley, who lives in Monroeville. Instead, he sees more professionals in his business and personal travels.

"A number of my personal friends are small-business owners. I see it when I go to shop, when I go to the pool, with the people we interact with at (children's activity) fundraisers. There seems to be a growing number of these kinds of workers."



Brian Bowling and Bonnie Pfister can be reached at bbowling@tribweb.com or (412) 320-7910.

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http://www.post-gazette.com/pg/07019/754996-28.stm

Verizon Wireless set to add 330 jobs to Marshall complex
Friday, January 19, 2007

By Ed Blazina, Pittsburgh Post-Gazette

Verizon Wireless will expand its customer service center at the Thorn Hill Industrial Park in Marshall, creating an additional 330 jobs and retaining nearly 1,200 others that could have moved out of state.

Dennis Yablonsky, secretary of the state Department of Community and Economic Development, will announce this morning a $1.2 million package of state aid for the project, including grants, job training money and tax credits.

Pennsylvania was in competition with Ohio and New Jersey for the expanded center.

Mr. Yablonsky also will take part in a groundbreaking in Moon for a road project that will open land for another industrial park.

Verizon Wireless, which couldn't be reached for comment, already has an office complex at Thorn Hill and recently signed a lease for an additional four-story, 65,000-square-foot building. The company will probably transfer employees from its Butler County office to Marshall and hire new employees in Butler.

The company announced in August that it expected to add 125 jobs in the region.

Allegheny County Chief Executive Dan Onorato and other state and local officials are expected to attend this morning's announcement.

In Moon, Mr. Yablonsky will help break ground for the proposed Cherrington Extension.

The road project, which will run parallel to Business Route 60 between Ewing and Thorn Run roads at the Cherrington office park, will open 60 acres of land for new development.

The $10 million project involves grading, utility work and construction of the new road, as well as the addition of a third lane on Ewing Road. State grants will pay for about $8 million of work, with the rest coming from the Allegheny County Airport Authority and the Moon Transportation Authority.

DiCicco Development already has plans to lease about half of the land. It will roll out construction of a mix of tech, flex and office space over an extended period of years.

The project continues strong growth around Pittsburgh International Airport, where the airport authority also is overseeing development of the 240-acre Clinton Commerce Park at Route 60 and Clinton Road.


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(Ed Blazina can be reached at eblazina@post-gazette.com or 412-263-1470.)

[themaguffin]

Some more suburban news:

California firm has plans to grow Cranberry office, may seek space
Network Appliance wants to double employment in 3 years
Pittsburgh Business Times - January 19, 2007by Ben Semmes


Network Appliance Inc. is about to undergo a growth spurt.

The Sunnyvale, Calif.-based producer of computer storage systems, which employs 125 at its Cranberry location, plans to double that number over the next three years, according to Ron Bianchini, general manager of the company's local operations.

The company's expansion might also include a search for as much as 100,000 square feet in Pittsburgh's northern suburbs, Bianchini said, although the firm still has room to grow in its current space.

"I am pretty sure we can expand into another 15,000 square feet," he said.

The company opened its Pittsburgh-area location, a 38,000-square-foot office called the Network Appliance Pittsburgh Technology Center in Cranberry Township, in December 2004. It subleases the office from Danieli Corp., in a four-story building in Cranberry Woods Office Park.

Network Appliance occupies about a floor and a half in the building, and could expand into the remaining half a floor, Bianchini said. He declined to comment on whether the firm had engaged a real estate broker to assist in a search for space.

The expansion plans come at a time when the company is flexing financial strength. The firm, which began trading on the Nasdaq Stock Exchange in 1996, reported $2.0665 billion in total revenue in 2006, up from $1.5981 billion in 2005. Cash flow from existing operations was also up to $554.3 million in 2006, from $462.1 million in 2005.

Many of the employees in Cranberry Township worked with Bianchini when he headed Spinnaker Networks, an approximately 100-employee firm at the time of its sale to Network Appliance in 2004 for $300 million. Five of the six Spinnaker founders, including Bianchini, now work at Network Appliance's Pittsburgh office.

Before Spinnaker, Bianchini founded Scalable Networks Inc. and sold the company to Marshall Township-based FORE Systems Inc. for $39 million in stock in 1996. FORE Systems was purchased by Marconi Corp. plc in 1999.

Shortly after the sale, about 20 to 30 people were laid off or moved elsewhere in the company, Bianchini said, and the firm has since grown to about 125 employees.

But now, he said, a majority of the firm's employees, about 60 percent, are focused on the development side of the business.

"What happened was at Spinnaker, we were our own company," Bianchini said. "We had development, manufacturing; we had a loading dock. Now, we are primarily a development shop. We got much bigger on the development side."

Kevin Lane, a spokesman with the Pittsburgh Technology Council, said Bianchini has proven successful in past endeavors.

"Spinnaker Networks was a finalist in our annual 'Tech 50' (competition) in 2001 (in the "Rising Star category)," he said.

The ranking is based not only on company expansion over a three-year period, Lane said, but employee growth, community service and other factors.
Pittsburgh Business Times - January 22, 2007
http://pittsburgh.bizjournals.com/pittsburgh/stories/2007/01/22/story4.html





Business Pulse Survey: What long-awaited project will get done first?
Logistics company takes 50,000 sq. ft. of Imperial industrial space
Pittsburgh Business Times - January 19, 2007by Ben Semmes

Joe Wojcik
CSG Properties principals Joel Kreider, left, and Buddy Johns have signed the first tenant in their new building at Imperial Business Park. Kreider and Johns expect to build several more buildings there.
View Larger Rehrig Penn Logistics Inc., a provider of pallet management services, will be the first tenant at Imperial Business Park's new 100,000-square-foot facility in North Fayette Township near Pittsburgh International Airport.

Rehrig Penn Logistics is a wholly owned subsidiary of Los Angeles-based Rehrig Pacific Co., a manufacturer of reusable plastic pallets and crates for transporting commercial products.

The company has signed a five-year lease for about 50,000 square feet at the building, where construction wrapped up last summer, said Lou Oliva, senior vice president with Downtown-based Grubb & Ellis Co. who served as the broker on the deal.

Further details were not released, but space in the building leases for between $4.75 and $5.50 per square foot, according to the Pittsburgh Business Times fall Commercial Real Estate Guide.

A representative with Rehrig did not return calls.

Joel Kreider, a partner with Imperial Business Parks LP and principal at CSG Properties LLC, the project's developer, which is based at the park, said he hopes to have Rehrig Penn move in by March 1.

Formerly known as the Pittsburgh International Industrial Park, the development consisted of about 95 acres and 85,000 square feet of industrial space in four flex buildings just south of the Imperial exit off of Route 22/30 when CSG purchased it from the original developers in April 2005 for just over $4.5 million.

The ERECT (Employee Real Estate Construction Trust) Fund, a labor unions trust fund administered by Robinson Township-based PenTrust Real Estate Advisory Services Inc., is an equity partner in the park, Kreider said.

The project's original developer, Moon Township-based Brown, Ferry & Mangine, began work on the park in the mid-1980s, Kreider said.

In addition to changing the park's name, CSG invested about $1 million in renovations in the existing buildings and, last summer, acquired an additional 227 adjacent acres.

"We have four more pad sites for about 415,000 square feet" on the original 95 acres, which will be developed as part of the project's first phase over the next year or two, Kreider said.

"As we lease one building up, we start the next," he said. "The activity level was a little slow last summer or fall. (Now), we are seeing a tremendous amount of activity. We are 13.5 miles from Downtown, a few miles from the airport."

As for the recently purchased acreage, the firm is planning about 1.3 million square feet of bulk warehouse and light manufacturing to be built on speculation as part of the second phase of the project. Kreider said CSG may sell developed sites to companies that want to own their own buildings.

CSG also will consider build-to-suit office projects, but won't put up office buildings on speculation, Kreider said.

Bob Cornell, president of Downtown-based Colliers Penn and a broker that specializes in the industrial market, said he believes the deal is one sign that the Parkway West industrial submarket, which developers have targeted for new construction, is improving.

"I think it is getting stronger," he said. "There is an abundance of good (industrial) product in the southwest (Pittsburgh market). Anyone looking for space has very good choices."

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http://www.pittsburghlive.com/x/pittsburghtrib/business/s_489788.html

Allegheny Technologies deal may top $2B

By C.M. Mortimer
TRIBUNE-REVIEW
Tuesday, January 23, 2007


Allegheny Technologies Inc. said Monday it has signed a long-term agreement that may exceed $2 billion in sales to supply premium titanium and other metals to General Electric Co.'s GE Aviation subsidiary.
The deal is the second big titanium supply contract the Pittsburgh specialty metals manufacturer has won in the last four months.

In October, Allegheny Technologies won a long-term deal worth about $2.5 billion to supply Boeing Co., the world's second-largest maker of commercial airplanes. The deal runs through 2015.

Demand for titanium --- which is half as heavy as steel but just as strong -- is at a 30-year high.

The GE Aviation contract is expected to create additional jobs. "It will boost employment, but we're not in a position to comment on how many. It's too early," spokesman Dan. L. Greenfield said.

Under the deal with GE Aviation, Allegheny Technologies also will supply nickel-based superalloy and vacuum-melted specialty alloy products to Evandale, Ohio-based GE Aviation -- which manufactures jet engines for civil and military aircraft.

The agreement, which runs from 2007 through 2011, covers products sold to GE Aviation's suppliers by ATI Allvac, a unit of Allegheny Technologies.

"As a key supplier, we are pleased to be making a longer term agreement with GE Aviation during this unprecedented aerospace cycle," CEO L. Patrick Hassey said in a statement.

ATI Allvac produces cobalt-base and nickel-base superalloys, titanium-base alloys and specialty steels --- metals known for their wear and corrosion resistance, toughness and strength.

Allegheny Technologies stock closed yesterday at $92.18, up 62 cents.

ATI Allvac employs about 2,000 workers and operates manufacturing facilities in Monroe, N.C., Bakers, N.C., Richburg, S.C., Lockport, N.Y., Albany, Ore., and Sheffield, United Kingdom.

Last week, Allegheny Technologies said it will spend $60 million to boost titanium production by expanding its specialty plate mill in Canton Township, Washington County, which will add an undetermined number of jobs.

Greenfield noted that ATI Allvac specializes in nickel-base and super alloys for both jet engines and airframe applications.



C.M. Mortimer can be reached at cmortimer@tribweb.com or (724) 836-5252.

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http://www.post-gazette.com/pg/07024/756174-28.stm

PNC may use 'Super' ad to tout growth
Wednesday, January 24, 2007

By Dan Fitzpatrick, Pittsburgh Post-Gazette

On the heels of a record $2.6 billion in profits last year, PNC expects to roll out a new Mid-Atlantic marketing campaign next month that could begin with an ad during the Super Bowl.

Calling the campaign "the most comprehensive in our history," PNC Financial Services Group Chief Executive Officer James Rohr expects the advertising to reach the entire PNC network in eight states and the District of Columbia, carrying the PNC name "into some of the fastest-growing markets in the country."

PNC's recent purchase of Baltimore-based Mercantile Bankshares Corp. -- due to close early this year -- gives the bank a sizable share of the Washington, D.C.-Maryland-Virginia market, allowing it to compete for customers inside one of the wealthiest, best-educated and fastest-growing areas in the U.S.

The forthcoming ad campaign is part of a strategy to build on the recent successes of Pittsburgh's largest bank.

The record $2.6 billion in profits reported yesterday is up from $1.3 billion in 2005. Excluding the one-time gain from the purchase of a Merrill Lynch division by PNC-owned money manager BlackRock Inc., PNC earned $1.5 billion for the year. Income for the final three months of the year was $376 million, up 5.9 percent from $355 million. Excluding exceptional items, earnings were $1.30 a share, hitting Wall Street estimates on the nose. PNC closed down 1.06 percent, to $73.14.

Several other big banks reported positive results yesterday, as well. Charlotte, N.C.-based Bank of America, largest bank in the nation as measured by deposits, said fourth-quarter net income rose 47 percent to $5.26 billion and its crosstown rival, Wachovia Corp., reported net income was up 35 percent as its acquisition of Golden West Financial Corp. balanced out a challenging interest rate-environment.

Cleveland-based National City Corp. said its fourth-quarter profit more than doubled due to a gain from the sale of its First Franklin mortgage unit, though adjusted results fell short of analysts' expectations. Net income climbed to $842 million, or $1.36 a share, up from $398 million, or 64 cents, a year ago. Excluding one-time items, the company earned 64 cents per share, missing Wall Street's target of 69 cents per share.

Because of 17 straight interest-rate increases by the Federal Reserve, all banks, including PNC, are having difficulties extracting as much profit from lending activities. PNC's net interest margin -- a closely watched measurement that calculates the difference between what banks take in on loans and pay out in deposits -- was 2.88 percent in the fourth quarter vs. 2.96 percent in the fourth quarter of 2005. Retail banking profit was down 5.6 percent to $184 million.

"The industry right now is confronted with a very challenging market," said banking analyst Gerard Cassidy, with RBC Capital Markets in Portland, Me. "PNC is not immune from these issues."

But PNC can also rely on income from fee-based businesses that are not tied directly to interest rates.

For example, it still owns 34 percent of BlackRock, now the fifth-largest money manager in the U.S. after its purchase of Merrill Lynch's asset-management arm for $9.4 billion. And BlackRock's earnings doubled in the recently completed fourth quarter, to $169 million.

Mr. Rohr said yesterday that he continues to look for more bank acquisitions but does not anticipate getting too far away from PNC's Mid-Atlantic footprint nor does he want to overpay. He turned down several deals last year in northern New Jersey because the prices was too high.

"We just have to be judicious," he said.

The launch of the new PNC advertising campaign may coincide with one of the biggest marketing opportunities of any year -- the Super Bowl. PNC Spokesman Pat McMahon wrote last week in an e-mail "that's what corporate marketing was shooting for as the launch date."

Yesterday, though, Mr. McMahon would not say anything more about the campaign, saying it was "premature" to talk about it. Thus, it is not known if a Super Bowl ad would be national, strictly local or regional, with PNC making a series of local buys in key markets.

Whenever it begins, "the branding campaign will be about the ease of doing business" at PNC, Mr. Rohr said yesterday during a conference call with analysts, citing the bank's recent decision to rebate ATM fees for most of its customers as one example.

PNC "recognizes that to grow organically, they have got to make a bigger imprint in the minds of their existing customers as well as new customers," said Mr. Cassidy, the banking analyst.


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(Dan Fitzpatrick can be reached at dfitzpatrick@post-gazette.com or 412-263-1752.)

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http://www.post-gazette.com/pg/07024/756172-28.stm

State to help new owner of Latrobe Brewing plant
City Brewing wants to restart production by May
Wednesday, January 24, 2007

By Len Boselovic, Pittsburgh Post-Gazette

LATROBE -- Gov. Edward G. Rendell yesterday gave the new owners of Latrobe Brewing's plant $4.5 million in state aid and said more than $7 million in additional assistance is on the way to help resume production at the former home of Rolling Rock beer.

The $4.5 million is a combination of grants, low-interest loans and tax credits that will help City Brewing of LaCrosse, Wis., begin production in May.

The company projects it will employ about 100 by the end of the year and 250 within three years.

The remaining money, also expected to be a combination of grants and loans, will come from a state fund created in 2004 to finance infrastructure improvement projects that promote economic development.

It will be used to expand Latrobe's waste water treatment plant, which is not equipped to treat the extra water City Brewing will use once it reaches full production. The company will brew beer, flavored malt beverages, energy drinks and teas under contract for companies that own Mike's Hard Lemonade, Arizona teas, Monster Energy drink and other brands.

Gregory J. Inda, City Brewing's chief financial officer, said the first union workers will be called back to work in March and employment will begin to ramp up in May, when production begins.

"The business is definitely there. We just need to get the brewery up and running," Mr. Inda said.

He said production could reach 500,000 barrels this year and 750,000 to a million barrels next year. Work on the waste water treatment plant will continue into 2009, when City Brewing anticipates reaching full production, Mr. Inda said.

InBev, the former owner of the plant, sold the Rolling Rock brands for $82 million last year to Anheuser-Busch, which transferred production of the beers to its Newark, N.J., plant. City Brewing subsequently purchased the plant from InBev and negotiated a labor agreement with the IUE/Communications Workers of America, which represents the plant's union work force.

The average worker at the plant will earn nearly $40,000 annually.

Mr. Rendell said the state's Commonwealth Financing Authority, which administers the infrastructure aid program, is scheduled to vote on the City Brewing package next week.

The $4.5 million in assistance announced yesterday includes $3.4 million in grants, a $400,000 loan, $500,000 in tax credits and $250,000 in job training funds.

"It's a terrific deal for us," Mr. Rendell said. "[City Brewing] is showing faith in us. They're showing faith in the work force."

Mr. Rendell also said he will talk with the investor group considering purchasing the assets of bankrupt Pittsburgh Brewing if they are able to win court approval for the acquisition. The Lawrenceville brewery sought bankruptcy protection in December 2005.


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(Len Boselovic can be reached at lboselovic@post-gazette.com or 412-263-1941.)

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the first batch of new Mellons arrives in Pittsburgh... before the projected elimination of 600 this summer... While the 1000 or 2000 new jobs projected for Pittsburgh is quite a bit more than the 600 projected to be eliminated... all jobs are not created equal. It would be interesting to see which jobs are being eliminated... and which jobs are being created... and pay disparity. My guess is that the newly created jobs will be lower-quality jobs in comparison to the jobs lost... as Bank of New York's Pittsburgh outpost takes on the functions of "back office".


http://www.post-gazette.com/pg/07025/756586-28.stm

Mellon adding 210 jobs Downtown
Thursday, January 25, 2007

By Dan Fitzpatrick, Pittsburgh Post-Gazette

Making good on a pledge to invest in its hometown even as the head office moves to New York, Mellon Financial intends to create 210 new business-support jobs Downtown this year as it pulls positions from Jersey City, N.J.

The new Pittsburgh jobs are the first of 1,000 to 2,000 Mellon promises to create in the next three to five years as the 137-year-old financial services firm merges with The Bank of New York and takes a Manhattan address for the very first time.

"We have a very strong commitment to creating jobs and growing in the Pittsburgh region," Mellon Chief Executive Officer Robert Kelly said in a press release. Yesterday's announcement "is the start of our multi-year initiative to do just that."

Mr. Kelly will be CEO of the combined company once the deal closes, as expected, in July.

In announcing the proposed merger last December, Mr. Kelly was quick to point out that the new company would remain committed to Pittsburgh despite the headquarters withdrawal, citing the area's low cost of living and well-educated work force as reasons to keep several major business units in town.

Mellon will begin moving the positions from Jersey City in February, and it intends to fill half of the 210 local jobs during the second quarter of the year.

A Mellon spokesman said there may be a "handful" of people who relocate from New Jersey, but that "nearly all" the new spots will be filled with people from Western Pennsylvania.

Tasks include record keeping and handling stock transactions for corporate clients. The new workers will work for the Mellon Investor Services division and be housed in the Mellon Client Service Center on Ross Street, across from One Mellon Center. "We want to hire local people," Mellon spokesman Ron Gruendl said.

Mellon currently employs 6,100 in the region, but has said as many as 600 may lose their jobs when the merger is consummated in early summer. But it has promised to offset those losses,adding the 1,000 to 2,000 workers over the years as Pittsburgh continues to be home to several key business units, serving as a center for technology, operations and administration for the merged operation.


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(Dan Fitzpatrick can be reached at dfitzpatrick@post-gazette.com or 412-263-1752.)

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http://www.pittsburghlive.com/x/pittsburghtrib/business/s_490175.html

Bush energy focus could juice up region

By Rick Stouffer
TRIBUNE-REVIEW
Thursday, January 25, 2007


President Bush's focus on energy -- especially coal and nuclear power -- in his State of the Union address plays to the Pittsburgh region's strengths and could lead to new jobs here, some experts believe.
"Any time you get a mention in the president's State of the Union speech, it's of great significance," said Jay Apt, a professor in Carnegie Mellon University's engineering and public policy department and executive director of the university's Electricity Industry Center. "It indicates the president has thought about it, and probably there is some money behind it."

Energy was one of the six main topics in Tuesday's speech, with Bush saying "we must continue changing the way America generates electric power -- by even greater use of clean-coal technology, solar and wind energy, and clean, safe nuclear power."

Lawmakers of both major parties for years have been pro-nuclear power, said Westinghouse Nuclear Co. spokesman Vaughn Gilbert.

"The Bush administration, the U.S. government have been very supportive of our efforts, resulting in our being selected by the Chinese to build nuclear plants in China," Gilbert said. "It was the Clinton administration in the 1990s that opened the market enabling us to pursue that business.

"All trends now are pointing toward a nuclear power renaissance for both new plant construction and for further improvements in capacity to the existing nuclear fleet."

Westinghouse, based in Monroeville, is adding 1,000 to 2,000 nuclear engineers to its 1,800-person local work force and is deciding where to locate them -- at its Monroeville site or in Cranberry.

"I would be surprised if Westinghouse doesn't grow significantly, with the Chinese order and the number of utility companies in the South and Midwest talking about new plants. Indications are that Westinghouse could do quite well," Apt said.

"I like what I heard, but unfortunately it's not the first time I've heard it," said freshman U.S. Rep. Jason Altmire, D-McCandless. "Bush has talked about energy independence" in all six State of the Union speeches he's given, Altmire said.

Altmire believes Western Pennsylvania can become a center for alternative fuel research and development, given the area's strong higher education base.

Research into clean-coal technologies, which dramatically reduce power plant emissions, is on a fast track locally, with Consol Energy Inc. and the federal government's National Energy Technology Laboratory heavily involved.

Consol earlier this month dedicated a test facility that generates power from waste coal and other fuels. "Our goal is to be a major stakeholder in such projects to ensure environmentally sound and efficient use of coal, methane gas and alternative fuels," J. Brett Harvey, Consol Energy's president and CEO, said in a statement.

Not far from Consol's Upper St. Clair headquarters, the National Energy Technology Laboratory is working on fossil fuel research and development, one of five such facilities nationwide.

"We are the fossil fuel research and development arm of the federal government," said lab spokesman Otis Mills.

He said the five labs, including the South Hills site and one in Morgantown, W.Va., have an annual budget of $750 million and handle 900 contracts at any one time.

Bush 18 months ago announced a $1 billion public-private partnership, FutureGen, to design a near-zero-emission coal-fired power plant.

Consol is a charter member in the FutureGen Alliance, a nonprofit organization composed of some of the world's largest coal producers and users that will operate the plant.

"If Pennsylvania and its companies actively pursue advanced electricity-generation programs, it bodes well for the commonwealth," Apt said. "Coal gasification (converting coal into clean synthetic gas) certainly could benefit Western Pennsylvania. It plays to Pennsylvania's strength."



Rick Stouffer can be reached at rstouffer@tribweb.com.

[themaguffin]

This very significant news:

2006 was best venture year since dot-com era
Pittsburgh Business Times - January 26, 2007by Patty Tascarella


Venture capitalists invested $256.2 million in Pittsburgh-area companies during 2006, handily passing 2005's $141.7 million toward Western Pennsylvania's best showing since the dot-com boom.

That 81 percent jump had Pittsburgh outstripping the national pace, according to data from the MoneyTree Report, produced quarterly by PricewaterhouseCoopers LLP and the National Venture Capital Association, based on data from Thomson Financial.

Nationwide, venture capitalists invested $25.5 billion in 3,416 deals in 2006, a 10 percent increase in deal volume and a 12 percent increase in dollar value over 2005. The year marked the highest level of investment since 2001.

"It's a great year," said John Sider, director of venture investment for Pennsylvania's Department of Community and Economic Development.

Michael Matesic, CEO of Idea Foundry, an Oakland-based nonprofit that nurtures startups, said Pittsburgh's large numbers position the region for future growth.

"There's a broad spectrum of deals here that got funded, and it's a positive trend," he said. "We're seeing more outside venture capital firms being in contact because everyone's looking for the best deals. That will lead to more funding."

Gary Glausser, a partner of North Side-based Birchmere Ventures, one of Pittsburgh's largest and most active venture capital firms, believes the activity level will continue.

"From what I know about our pipeline of companies, 2007 may be stronger than 2006," Glausser said.

BIG WINNERS
NVCA said five Western Pennsylvania companies received venture capital during the final three months of 2006, but almost all of the $33.43 million total was raised by two: Cranberry-based Netronome Systems Inc. raised $20 million and South Side-based Akustica Inc. raised $12 million. Also receiving venture money were LogicLibrary Inc., Station Square; Hardbikes LLC, Hermitage; and Landslide Technologies Inc., Robinson.

Netronome, launched in 2003, develops software and hardware designed to allow network applications, including security software, to run faster and more efficiently. Netronome officials could not be reached for comment this week.

Akustica, launched in 2001, develops products that enable cell phones and other electronic products to speak and hear. James Rock, Akustica CEO and president, said investors in its fourth-quarter financing round, including members of Pittsburgh's Rangos family and Palo Alto, Calif.-based Mobius Venture Capital, all backed the company previously.

"It's a sign the investors have confidence in our growth and strategy and continue to support us," Rock said. "For that, we're grateful. We're happy to see other people having success in raising money. It's good for all of us."

Jay Katarincic, managing director of Downtown-based venture capital firm Draper Triangle Ventures, which finished raising a $70 million fund last spring, pointed to several factors in 2006 that position the Pittsburgh region for future growth.

"I think the amount of dollars, the diversity of the types of companies and the diversity of the investors bode well for the region," Katarincic said.

Katarincic said the diversity is evident in both the varying stages of development for the companies funded and in the industries from which they come.

"Companies like Akustica have been around for a while and companies like BitArmor and Landslide are just outside the womb," he said. BitArmor Systems, a Downtown-based developer of security software, raised more than $2 million last year; Draper invested in it, and in Landslide.

Sider stressed the importance of investments being made in a range of sectors in Pennsylvania companies, in line with national statistics.

"It's healthy," he said. "If you look at the year's numbers, a big proportion is in life sciences but also in information technology, software and alternative energy ... so I wouldn't say we're overexposed in any area."

NATIONAL SCOPE
The National Venture Capital Association said 2006 was characterized by significant growth in the life sciences sector, with $7.2 billion in 731 deals, compared with $6 billion funding 647 deals in 2005.

Other areas of growth included:

Media/entertainment, with $1.6 billion going into 299 deals compared with 2005 when $1 billion went into 180 deals.
Internet-specific companies received $4 billion in 645 deals in 2006, up from $3.2 billion in 494 deals in 2005.
Industrial/energy companies experienced a sharp gain of more than 107 percent in dollars invested in 2006 with 183 companies receiving $1.8 billion, compared with 136 companies in 2005 receiving $851 million. The alternative energy subsector accounted for 40 percent of the dollars invested in this category.
Seed and early-stage companies accounted for 34 percent of the total deals last year and received more financing and dollars than in 2005. First-time financings increased in deals and dollars to the highest levels since 2001, with 1,093 companies receiving $5.8 billion in venture capital for the first time.

"That's a function of the amount of money available for investing," said Glausser. "Venture capitalists fled the early-stage (companies) when they got burned in 2001; now they've come back and have lots of money and are trying to find places to put it. We've seen large venture capital firms who manage billions of dollars looking at $10 million rounds."

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http://www.popcitymedia.com/timnews/46Akeystoneinnovation.aspx

Rendell Allocates $237,300 Grant for Pittsburgh Central Keystone Innovation Zone
Duquesne University and the Hill House Economic Development Corp. received a $237,300 three-year grant as part of a larger $3.4 million state initiative recently announced by Governor Rendell. This is great news for present and future start-up companies that focus on life sciences, information technology, and advanced materials and settle within the designated five neighborhood commercially-zoned swath of Pittsburgh that includes sections of the Hill District, Uptown, Downtown, North Side, and South Side.

Sixteen partners are each adding $25,000 over four years. These matching funds in combination with the grant will provide a plethora of support services from marketing the zone to attracting start-ups to providing support when they are up and running. “We’ll help with anything they need," says Steve Schillo, vp for management and business at Duquesne University.

“The beauty of this plan,” continues Schillo, “is that it captures the resources and energy in the local universities. Each of our universities has faculty that are close to starting up companies of their own or are aware of fledging start ups.” Duquesne, Carlow, and Point Park universities, along with CCAC are all involved.

President and CEO of Hill House, Evan Frazier says, “I think the real opportunity is in building momentum. When I think about the Hill District, it will encourage business growth, and I think that happening will yield ancillary businesses and employment to communities that are right at the brink of moving forward in significant ways. We’re right at that place where the additional momentum will really make a difference.”

Writer: Sherrie Flick
Sources: Steve Schillo, Evan Frazier

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great news... btw... if you look at the chart... it's amazing how much venture we were getting back in 2000 era

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http://www.post-gazette.com/pg/07033/758785-28.stm

With $100 million in venture capital funding, Targe Energy charges ahead
Aspinwall firm still focused on a bedrock of industry: coal
Friday, February 02, 2007

By Elwin Green, Pittsburgh Post-Gazette


Nothing in the outward appearance of the converted house at 111 Freeport Road in Aspinwall suggests the corporate home of an enterprise that has received the largest venture capital investment of any local company since the bursting of the dot.com bubble.

Bill Spence, founding chief executive officer of Targe Energy, likes it that way.

"If it was your money, would you want me spending it on a fancy office?" he said. "I'm far more interested in investing capital in people and technology and rigs."

The money that he refers to is the $100 million in venture capital received from Carlyle/Riverstone Global Energy and Power Fund III L.P., which announced their investment in Targe last June. And while many people tend to associate the term "venture capital" with high-tech startups in such fields as software or genome research, Mr. Spence's reference to "rigs" gives away the fact that Targe Energy is largely focused on an old-economy resource: coal.

It also deals with natural gas and coalbed methane, but at bottom, it all comes down to participating in Pennsylvania's bedrock mining industry.

The company, which employs about 100, has three operating units. Targe Energy Coal operates surface mines in northern Appalachia, primarily West Virginia and Pennsylvania; Targe Energy Reclamation reclaims waste coal; and Targe Energy Exploration & Production drills natural gas and coalbed methane gas wells.

For Carlyle/Riverstone's general partners, $100 million is barely a drop in the bucket. The Carlyle Group, possibly the world's largest private equity firm, has $51.8 billion under management. Riverstone Holdings LLC, a New York-based energy and power-focused private equity firm, founded in 2000, has $7 billion under management.

At present, drilling is the largest part of Targe's business. What distinguishes it from other drilling companies is not what it drills for or where it drills, but how it drills. Mr. Spence and crew are advocates for and practitioners of coiled tube drilling, which Mr. Spence describes as "the Roto-Rooter of drilling."

Conventional drilling rigs use drills that are pieced together in 30-foot segments. A coiled-tube drill uses a continuous spool of steel alloy drill pipe, up to 7,000 feet long.

Mr. Spence cited two advantages of coiled-tube drilling. The first is speed. At one site, he said, a crew using a coiled-tube drill was able to drill 22 wells, at 2,500 feet each, in 30 days. In 30 days of conventional drilling, he said, a crew would drill "maybe 10" wells.

The second advantage is safety. The work of changing drill bits and replacing drill segments commonly causes injuries, including the loss of fingers, he said.

One might wonder why all mining companies have not already abandoned conventional drilling for coiled-tube drilling. Company president and Chief Operating Officer Matthew Miller said that it is a matter of the prior investment that mining companies have made in conventional drilling.

"They have to live out the life of these rigs," he said.



The most luxurious touch in Targe's conference room is a large-screen television monitor, but the most characteristic touch may be an equally large black-and-white photo of Johnny Cash at his famous (or infamous) Folsom Prison concert, holding his guitar in one hand, making a rude gesture for the warden with the other.

Not that the principals of Targe come across as rude. But when the CEO wears a ponytail, jeans and cowboy boots, that signals a culture that regards convention with insouciance.

A strapping 6-foot-4-inch man with a quick smile and a hearty laugh, Bill Spence lacks both the demeanor or the accoutrements of the imperial CEO -- indeed, he shares a small, cluttered office with Mr. Miller, with windows that face an alley. Other executives share similarly modest offices on the house's upper floors.

The executive team that Mr. Spence assembled when forming Targe tempts one to construct a joke: "A bomber pilot, a linebacker and an impresario meet in a bar ..."

The bomber pilot was Mr. Miller, who flew B-52s from 1981 to 1988 for the U.S. Air Force, then entered the world of private equity, helping to manage companies engaged in leveraged buyouts.

The linebacker was Hall of Famer Jack Ham, who earned four Super Bowl rings during his 1971 to 1982 tenure with the Pittsburgh Steelers and now serves as senior vice president. The impresario was Rich Engler, as in DiCesare-Engler, the booking agency that dominated Pittsburgh's concert scene for two decades. He is a vice president.

The three did not meet in a bar (at least not initially), but they all wound up with a connection to Mr. Spence. Mr. Miller was introduced to him in 2003 by Dan Drawbaugh, chief information officer at University of Pittsburgh Medical Center, a longtime friend of both men who felt that they would complement each other.

Mr. Ham entered the coal business as a broker while he was still playing with the Steelers -- "Most players in my generation also had other jobs," he said. He went into the coal business full time in 1982, and became friends with Mr. Spence along the way.

And Mr. Engler became friends with Mr. Spence in 1998 after their wives introduced them to each other. When he left Clear Channel Communications in 2004 -- "I didn't like the way the entertainment industry was going" -- he was quick to accept an offer from Mr. Spence to get into the energy business. "He's the best salesman you could ever hope to find," Mr. Spence says of Mr. Engler.

It wasn't until November 2005 that Targe was formed as a legal entity, its name taken from an ancient piece of Scottish weaponry, a shield with a spike protruding from its center.

At that same time, Mr. Spence and Mr. Miller made the decision to conduct a round of equity financing. Based on Mr. Miller's experience in the world of private equity, they compiled a list of potential investors, including Carlyle/Riverstone. "We decided that if we were going to do this, we were going to do it big," Mr. Spence said.

They met with Carlyle/Riverstone representatives in January 2006.

"We loved the meeting, but we didn't think anything would come out of it," Mr. Miller said, because Carlyle typically funds only between two and four companies a year, out of up to 80 that come under review, and because the funding process is typically slow.

To their surprise, the investors asked for a second meeting scarcely three months later, on April 24. At that meeting, the parties reached basic agreement on terms for investment, and on June 1, they closed the deal.

"In private equity terms, that's lightning speed," Mr. Miller said.

Moving forward, the company that now drills primarily for others hopes to be more of a producer, drilling on its own lands. To that end, Targe has acquired 140,000 acres in Montana for oil and gas drilling, and hopes to drill its first well in April.

A second area of growth that the company wants to venture into is building rigs. Buying them, as they now do at a cost of $2 million to $4 million each, involves a 14- to 16-month delay while the rigs are built. Mr. Spence and Mr. Miller would like for Targe to begin building rigs next year, based on the company's own patented design, and creating in the process 100 to 200 additional jobs.

And, not to put too fine a point on it, they hope to earn a second round of financing from their backers.

"We're their beachhead in Pennsylvania," Mr. Miller said.


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(Elwin Green can be reached at egreen@post-gazette.com or 412-263-1969. )

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University Partnership Ignites Region
By: Abby Mendelson

February 8, 2007
“Anything that happens,” says Lance Taylor, Ph.D, president/CEO of Cellumen, a Jane Street bio-tech company; Adjunct Professor, Carnegie Mellon University; Board Member, Pittsburgh Life Sciences Greenhouse; holder of more than a dozen patents – “starts with people. Here, it was the right two people at the right time.”
Seven years ago, Taylor adds, “while talking with foundations and other regional leaders, Pitt Chancellor Mark Nordenberg and CMU President Jared Cohon realized that there was a lot of opportunity for cooperation between their two institutions, that they were more complimentary than competitive. Further, they reasoned, if Pittsburgh was going to compete with other major centers, especially in life sciences, if would be better if the universities cooperated. Rather than fighting for a bigger slice of a fixed pie, they could help build a bigger pie. The result was that their cooperation has been the single biggest opportunity to help the region grow.”

The first fruits, the Life Sciences Greenhouse, married CMU’s IT-computer science-engineering strengths with Pitt’s medical excellence and biomedical engineering, Nordenberg and Cohon co-chairing. Next came the Digital Greenhouse, which morphed into the Technology Collaborative. “The Digital Greenhouse was a leap of faith,” offers Don Smith, an early leader in the effort. It meant risk, it meant money, it meant, he adds, “a much more active engagement than merely hiring faculty. It meant two men actively involved in economic development, maximizing the impact, on this region. It’s rare in the university world.”

Efforts grew until last year the two universities created a joint economic development arm – Pittsburgh’s University Partnership, Donald F. Smith, Jr., Ph.D., Director. "To the best of our knowledge,” Nordenberg said at the time, “this is a unique arrangement in higher education, to have one individual leading the economic development initiatives of two major research universities."

"By working together,” Cohon added, “we ensure that the future is invented right here in Western Pennsylvania. Committed to leveraging our complementary strengths, we are already seeing positive results, including the development of one of the nation’s most prestigious IT addresses, at the Collaborative Innovation Center, home to Apple, Google, Intel, and a Microsoft-sponsored robotics laboratory."

“The fact that global leaders are choosing our region to help them generate their next generation of products is a very important signal,” Smith says. “It tells the world this is a good place to do technology business, that Pittsburgh has the raw material to create tomorrow’s products. They could locate anywhere in the world,” Smith adds. “But they came here.”

Holding court in Oakland, in a small Henry Street building, gentle, personable Don Smith seems hardly the driven, Type A-type the numbers would suggest. Since the turn of the century, the Partnership ranks sixth in the nation for university researchers, has produced 225 start-ups, and raised $1.2 billion in capital projects -- in Oakland alone. Overall, Pittsburgh’s 7,000-odd technology companies employ more than 200,000 people, generating more than $10 billion in payroll – with a sizeable percentage having university origins. “In 2006-07 alone,” Smith says, “there’s $1 billion is sponsored research. That means we’re importing new money and new jobs.

“Since 2004,” he adds, “successful university-originated spin-off companies went from two-to-four a year to 12-to-20 a year. That’s a remarkable gain. For regional long-term success, this start-up rate is critical. We have to continue if we want to have a dynamic technology-based economy.


“There is more pressure for the universities to have an impact on driving the economy,” Smith says. “In Pittsburgh, the traditional pillars of the economy have been eroded or knocked down. As such, people are looking to the universities not just for education, but also for the emergence of the new economy. To their credit, the universities stepped forward, recognizing that if we’re going to try to attract the world’s best faculty, and the world’s best students, we all have to live here. We are part of Pittsburgh, and Pittsburgh is part of us. We need a successful region – and co-partners – to be great research universities.

“There’s a lot going on on both campuses,” Smith adds. “We’ve worked very hard to try to attract and retain graduates. While we can’t compel them to stay, we can make it attractive. To do that we’ve mobilized tremendous resources -- attracted and retained businesses, enhanced the university infrastructure. Everyone talks about creating win-win partnerships. We’ve done that because we can help both sides understand what the other side wants and values. It’s a translation function: if you don’t understand what a win means to the other side, it’s hard to get to the deal. That’s the coordination support that my office can do, to be supportive of what others – professors, inventors, line development officers – are doing.”

For his part, Smith’s self-described “macro-level” role is three-fold: “First, I serve as a doorman for the university to companies, investors, and economic development people in the region,” he says. “I help people find the right door. Second, I actively seek collaborative opportunities that leverage the strengths of both universities. Third, I work to see how to create an environment inside and outside that will allow these people to be more successful, to find linkages they can use in their daily activities.”

“Don Smith,” comments Andrew Hannah, President/CEO, Harmarville-based Plextronics, which markets line of revolutionary organic lighting that can be printed on virtually any surface, “is one of my Pittsburgh heroes. He is completely focused on the growth of the Pittsburgh technology sector. He understands that we need to develop an entrepreneurial culture -- and is committed to making that happen. Our success over the next ten years will partially be the result of the work he’s doing to get these technologies and companies off the ground.”

“The future looks very bright,” Cellumen’s Lance Taylor adds. “When you look at the growth and number of companies over the last five years, projections are that they will continue. Right now, the slope is very strong.”

“Is the sky the limit?” Smith is asked.

“Ultimately,” he smiles, “it is.”


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Award-winning writer Abby Mendelson is the author of numerous books, including The Pittsburgh Steelers Official History and Pittsburgh: A Place in Time. Ghost Dancer, a collection of short stories, is available at amazon and bn.com.

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http://www.post-gazette.com/pg/07044/761527-28.stm

Private Sector: Five trends in Asia that will impact Western Pennsylvania's economy
Tuesday, February 13, 2007


By Dennis Unkovic

From multinational corporations headquartered in Pittsburgh to the "mom-and-pop" dry cleaning establishment in Cranberry, every business is caught in the cogs of a global economy whose engine more and more seems to be running toward the East.

Beginning with the Japanese move into a worldwide auto industry once so completely dominated by U.S. manufacturers, Asia has been slowly building its economic power to the point Asian companies now encroach on U.S. and European dominance in virtually all industries.

As Asian economic might has grown, the material quality of life of Asian people has risen dramatically, too. Today Asia represents not just competition, but a customer base as well for a wide spectrum of American businesses.

But Asia also has emerged as a competitor for the resources that are consumed to create high living standards, leading me to the first of five trends in Asia that I believe will have the most impact on the Pittsburgh regional economy:


1.


Because of the growth of the economy and standard of living in China, India, South Korea, Vietnam and other Asian countries, energy prices will not retreat.

At this writing, gas prices are much lower than a few months ago, but do not be fooled. They are still high and will go higher because of unabated demand for oil, especially from Chinese consumers.

But the Asian energy appetite consumes more than oil. Coal demand also is exploding exponentially in China, which could raise the price of coal -- bad news for American utilities burning coal to make electricity and American manufacturers using coal to fuel manufacturing processes.

Ironically, Asia's craving for energy also may boost the Pittsburgh economy. To address long-term energy demands, many utilities want to take another look at nuclear power to generate electricity. Historically, Pittsburgh companies have had a fairly significant presence in the nuclear power generation industry, and we may benefit if this technology assumes a more important role in meeting energy needs. Already, China's government has selected a consortium led by Monroeville-based Westinghouse Electric Corp. to build four and possibly more than two dozen nuclear plants there.


2.


The metals and commodities industries will continue to consolidate.

Like the auto industry before, companies dealing in metals and other commodities are rapidly becoming multinational. Asian companies such as Anben Iron & Steel and Asian-oriented companies such as Mittal Steel are looking to establish operations all over the world and to build long-term relationships with their customer base, which consists of a handful of companies just as global as they are.

Pittsburgh has long played a leading role in producing metals on many levels. As more primary metal producers and commodity companies merge, it will affect both large and small regional companies. Our larger multinational metal and chemical companies will see their operations go even more global. And our smaller niche players producing specialty metals or chemicals will find that it will be ever harder to do business unless they are part of a larger, more global operation.


3.


Japan will decline economically relative to other countries.

The Japanese economy has appeared to improve over the past few years after a decade of economic malaise, but Japan faces several roadblocks to long-term growth. Japan is an aging country that refuses to offset declines in the work force through immigration.

Additionally, as other Asian countries grow, they are turning less and less to Japan for manufacturing expertise and financing. Japanese products are now more expensive than those rolling off assembly lines in Korea, Vietnam, India and China.

For 25 years, when Pittsburgh companies thought of investing in Asia or expanding to Asian markets, they thought only of Japan. When economic development professionals developed road shows to tout our region, they sent them to Japan. Over this quarter century, Japanese companies have invested substantially in Western Pennsylvania.

In the future, the business relationships between Pittsburgh companies and Asia will focus more on China and India.


4.


The Chinese domestic economy supplants exports as the primary driver of the Chinese economy.

China's middle class already consists of 200 million consumers, and it is growing. That's an enormous market for goods and services. China, which once focused economic growth on exports, is now turning more and more to satisfying the ravenous demands of its growing domestic economy.

In addition, China is accumulating a horde of capital that it will continue to invest in the United States. As a new market and a new source of capital, China may play a major role in our regional economy in the coming decades.

But remember that China is staking its growth on manufacturing and Western Pennsylvania is no longer a center of manufacturing. Pittsburgh is a service and technology center. China's continued growth represents less competition for Western Pennsylvania than it does for Erie or the center of the state, which still depend on manufacturing much more than we do.


5.


India will play a greater role in Pittsburgh's international business community.

The changing focus of the Chinese economy may or may not affect Pittsburghers, but the growth of India definitely will, for a number of reasons.

India has a high-quality well-educated labor force that speaks English. Wireless communication is rapidly helping India overcome infrastructure shortcomings. What that means is that in knowledge-driven businesses such as software development and software systems integration, India will emerge as a major competitor to the United States.

But before one bemoans the increased outsourcing of high-paying skilled jobs to India, consider this one fact. Because of the presence of the University of Pittsburgh and Carnegie Mellon University, there are few regions in the United States with as many economic ties to India as we have.

Many entrepreneurs from the subcontinent were educated or began their companies here, creating a strong network of business relationships between Pittsburgh and Indian companies. The emerging technology-based industries in Pittsburgh are the very industries gaining traction in India, e.g., technology- and knowledge-based services, systems integration and application software development. In a sense, Pittsburgh may ride India's coattails, which would be a good thing.

Horace Greeley once advised young Americans to "Go West young man, and grow with the country." I venture a guess that if around today, the 19th century newspaper editor would say, "Look East, young person," for it is in looking east that many Pittsburghers will find their economic future.



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(The South Asian Business Association at Carnegie Mellon University's Tepper School of Business will hold its 3rd India Business Conference on investing in India from noon to 6 p.m. Friday in the Mellon Auditorium at Posner Hall. For more information, visit business.tepper.cmu.edu. )

Dennis Unkovic, of McCandless, a business lawyer with Meyer Unkovic & Scott LLP, can be reached at du@muslaw.com.

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Wheeling-Pitt's new owner moves to close deal, expand
Esmark joining in purchase of Mercer's Winner Steel
Tuesday, February 13, 2007

By Len Boselovic, Pittsburgh Post-Gazette



Esmark's plans for Wheeling-Pittsburgh Corp. grew a little larger yesterday. The Chicago Heights, Ill., steel services firm disclosed its formal offer for merging with the West Virginia steelmaker and said it would soon own a piece of a Mercer steel producer.

The merger proposal values Wheeling-Pitt shares at $20 and would give Wheeling-Pitt shareholders the chance to purchase up to $200 million in discounted stock in the combined company.

It matches a proposal Esmark made in October when it was battling Brazilian steel producer Companhia Siderurgica Nacional for control of the embattled company. Esmark won the contest a month later when Wheeling-Pitt shareholders ousted most of the company's directors and replaced them with a slate nominated by Esmark.

Esmark subsequently installed its own management team at Wheeling-Pitt, led by Esmark Chairman and Chief Executive Officer James P. Bouchard, who also became CEO of Wheeling-Pitt.

Wheeling-Pitt shareholders could vote by May on whether to complete the merger.

"We're getting close to our vision," Mr. Bouchard said yesterday.

Esmark also said it was part of a group that has signed a letter of intent to purchase Winner Steel of Sharon, Mercer County. The other buyer is a 50-50 joint venture between Swiss steelmaker Duferco Group and Russian steelmaker Novolipetsk.

Terms were not disclosed on the acquisition, which is expected to close in the second quarter. Winner galvanizes sheet steel for the construction, appliance and automotive markets, producing about 600,000 tons last year.

"That's an excellent downstream tie-in for Wheeling-Pitt," Mr. Bouchard said.

Esmark's strategy is to reduce Wheeling-Pitt's operating costs, produce higher-profit sheet steels and sell them to the same Midwestern customer base Esmark serves. Esmark has steel processing and distribution plants in Ohio, Indiana, Illinois and Missouri.

Wheeling-Pitt employs about 3,100 at plants in West Virginia, Ohio and Pennsylvania.

Mr. Bouchard, a former U.S. Steel executive, said Esmark remained interested in making some of the operations of the former Weirton Steel part of the Esmark/Wheeling-Pitt combination. Arcelor Mittal, the world's largest steelmaker, owns the Weirton mill and is considering selling it in order to satisfy antitrust concerns of U.S. regulators.

Under the terms of the proposed merger, Wheeling-Pitt shareholders would get one share in the merged company for each of their existing shares. For those who don't want the new stock, Esmark will spend up to $150 million to repurchase Wheeling-Pitt stock for $20 per share.

That's nearly $5 below current market prices, so most shareholders are expected to accept shares in the combined company.

Wheeling-Pitt shares closed yesterday at $24.69, down 11 cents.

Esmark and its shareholders, including Franklin Mutual Advisers, would receive 17.5 million shares in the new company. That would give them about a 64 percent stake, but Mr. Bouchard expects that will be reduced because of the $200 million in discounted stock that's also part of the merger proposal

If Wheeling-Pitt shareholders purchase the full allotment of the discounted shares, ownership of the merged company would be divided pretty much equally between Wheeling-Pitt shareholders and Esmark's investment group, he said.

Franklin Mutual also will contribute $200 million in cash as part of the proposed merger.

Separately, a United Steelworkers union trust that finances health-care benefits to some Wheeling-Pitt retirees collected $2.5 million last week when it sold more than 97,000 Wheeling-Pitt shares.


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(Len Boselovic can be reached at lboselovic@post-gazette.com or 412-263-1941. )

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Giant Eagle bags a bigger share of market
The O'Hara chain controls more than half of local supermarket business, but competition remains fierce
Wednesday, February 14, 2007

By Teresa F. Lindeman, Pittsburgh Post-Gazette



Giant Eagle continues to sit atop the region's supermarket pile, but competition for the region's grocery dollar appears to be intensifying.

That, at least, is what the latest numbers from industry tracking report Market Scope suggest. The publication of Wilton, Conn.-based ACNielsen Trade Dimensions shows O'Hara's Giant Eagle controlled about 54 percent of the Pittsburgh metropolitan statistical area's supermarket market share last year, up from a little more than 50 percent in December 2005.

Battling it out for second place were the nation's largest retailer, Wal-Mart, and Minnesota-based grocery distributor SuperValu, both of which had almost 20 percent. SuperValu supplies the region's Shop 'n Save, Foodland and Save-A-Lot stores in addition to several other independents.

All three players increasingly are competing with retailers such as Target discount stores, Rite Aid drugstores and Sheetz convenience stores, whose numbers are not reflected in the research group's statistics. The report does not include stores that don't have produce and other traditional grocery services.

Still, the supermarket statistics alone do reflect some of the maneuvering that's been taking place in the region. Trader Joe's, a quirky upscale discount grocer, didn't have a store here until October. Its East Liberty store now claims a slim 0.3 percent market share, a bit less than the region's sole Whole Foods Market store nearby.

SuperValu's market share seemed to be in a bit of a holding pattern as the company completed its planned sale of about 20 corporate Shop 'n Save stores to independent operators who would use its distribution services.

Pharmaceutical customers felt the love last year as chains from Giant Eagle to Wal-Mart to Kmart to Shop 'n Save all stepped up programs offering cheap generic drugs. Gas discounts also continued to be a factor.

Looking ahead, there's a push on to give consumers more places to buy wine and beer while taking care of grocery shopping, said Meg Major, a senior editor with trade publication Progressive Grocer. "It's just all about convenience and being where your customers need you to be."

To that last point, retailers both nationally and in the region are testing smaller stores that may not provide the one-stop shop qualities of a Wal-Mart supercenter but that have more basic items than can be found in a convenience store.

Giant Eagle, which last year launched two large Market District stores targeted toward foodies, may make 2007 the year it builds its first Express store. The 13,000-square-foot Harmarville concept store is expected to include produce, bakery, prepared foods, meat and deli departments as well as a drive-through pharmacy, a GetGo fuel station and an in-store cafe with WiFi access.

Both Wal-Mart and SuperValu are experimenting with smaller stores in other markets. "Many consumers actually prefer to shop in a more manageable format," said Ms. Major. She said that may also benefit a 17,000-square-foot McGinnis Sisters store planned for Route 228 in Cranberry, the first new site the family-owned specialty grocer has planned in years.

Meanwhile, a decision by a Dutch grocery company to pull out of the Cleveland market gave Giant Eagle an opportunity to boost its presence there. The O'Hara grocer's market share in northeastern Ohio rose from about 44 percent at the end of 2005 to more than 55 percent a year later, according to ACNielsen Trade Dimensions.


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(Teresa F. Lindeman can be reached at tlindeman@post-gazette.com or at 412-263-2018. )

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Nice job, Alain Belda. At least if ALCOA gets swallowed up, we won't be stung by yet another Fortune 500 HQ loss, since Belda already took care of that a few years ago.

http://www.post-gazette.com/pg/07045/761822-28.stm

Takeover talk boosts Alcoa shares
Wednesday, February 14, 2007

By Len Boselovic, Pittsburgh Post-Gazette

Takeover speculation sparked a 6 percent jump in shares of Alcoa yesterday, giving Wall Street analysts the opportunity to debate the virtues of consolidation -- real or imagined -- and impatient Alcoa investors an exit strategy.

Alcoa declined comment on a report by the Times of London that Australia's BHP Billiton and Rio Tinto are preparing to acquire New York-based Alcoa for $40 billion. A BHP spokesperson also declined comment.

Although some analysts downplayed the chances of such a transaction, a spate of mergers among global metal producers in recent years, including a $6 billion acquisition announced this week, leads some to believe any deal is possible.

Alcoa shares traded as high as $36.05 before closing at $35, up $2.10. Over the last 52 weeks, Alcoa shares have traded between $26.39 and $36.96.

Mergers have dominated the metals industry recently as producers, flush with cash and appreciated stock prices, scour the globe in search of targets to expand their geographic reach. Few metals industries have been more transformed than steel, which witnessed the combination of Mittal Steel, the world's largest steelmaker, with No. 2 Arcelor. More recently, Indian producer Tata Steel won a battle for European steelmaker Corus Group PLC by bidding $11.3 billion.

Ongoing consolidation spawned a new claimant to the world's largest aluminum producer title, with Russia's OAO Rusal seizing bragging rights from Alcoa. The latest entrant in the sweepstakes is Indian aluminum maker Hindalco Industries Ltd., which this week announced an agreement to acquire Novelis, a Canadian aluminum producer, for $6 billion, including the assumption of $2.4 billion of debt.

The interest in Novelis, whose business is similar to Alcoa's downstream operations, prompted rumors about BHP and Rio Tinto's interest in Alcoa to resurface.

"Everybody's got too much money. That's what the issue is these days," said Charles Bradford, a New York-based analyst.

Other analysts weren't as quick to dismiss the speculation, saying either BHP or Rio Tinto has the financial wherewithal to acquire Alcoa. At yesterday's closing price, Alcoa's common stock has a market value of about $30 billion.

"I wouldn't brush it off," said Scott Burns, a Morningstar analyst who tracks metals stocks. "It'll be a big deal, don't get me wrong. But both BHP and Rio can do it. They've got currency."

Mr. Burns does not agree with speculation that either alleged acquirer would sell off Alcoa's downstream operations, which include everything but making raw aluminum and alumina, the raw ingredient used to produce the metal.

"They've created demand for aluminum by pushing aluminum through their downstream businesses," he said.

Whether the takeover rumor is legitimate or not, it has focused attention on a company that has disappointed investors in recent years despite a 24 percent advance in the four months prior to the takeover speculation making headlines.

Alcoa was the fifth-worst performing stock among the Dow Jones Industrials last year. Since Chairman and Chief Executive Officer Alain Belda replaced Paul O'Neill is 2001, investors have earned an average annual return of less than 1 percent, including dividends.

"It's kind of put the stock back on the radar screen of investors," Mr. Burns said.

Alcoa earned record profits of $2.2 billion last year on sales of $30.4 billion. Last month, the company announced a 13 percent dividend increase and said it will repurchase up to 10 percent of the company's stock.


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(Len Boselovic can be reached at lboselovic@post-gazette.com or 412-263-1941.)

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The short-sightedness and delusion of our national energy policy is now going to pinch us with a shortage of qualified nuclear engineers.


http://www.pittsburghlive.com/x/pittsburghtrib/business/s_493073.html

Nuclear studies mushroom at regional schools

By Bonnie Pfister
TRIBUNE-REVIEW
Wednesday, February 14, 2007


Thirty years after a meltdown at Three Mile Island quelled support for commercial atomic power, nuclear engineering is re-emerging as a field of undergraduate study nationwide.
Pennsylvania State University has seen double-digit enrollment growth for each of the past four years, while the University of Pittsburgh has started a program in nuclear engineering for students in other engineering majors.

"Enrollment went down as the nuclear industry went into hibernation," said Lawrence Hochreiter, a nuclear and mechanical engineering professor at Penn State. At its nadir in 1997, just five of the school's second-semester sophomores declared a nuclear engineering major. That's all changed, Hochreiter said.

"Parents and students are now asking about the program," he said. "That has not happened before."

Bottoming out at fewer than 600 students nationwide in the late 1990s, the number of enrolled nuclear engineering undergraduates topped 1,500 last year, according to the American Nuclear Society. That resurgence comes amid interest in cleaner alternatives to coal, the source of more than half of the nation's electricity that is a leading cause of global warming. Some 19 U.S. utilities and consortiums have announced plans to build 30 nuclear power plants in coming years.

International demand is escalating as consumer markets expand in Asia. Monroeville-based Westinghouse Electric Co., a global leader in reactor design, recently won a $5.3 billion contract to design four plants in China, with the first coming on line by 2013. And President Bush in December carved out an exception to the Nuclear Non-Profliferation Treaty that will allow U.S. firms like Westinghouse and rival General Electric to sell civilian nuclear technology to India.

But despite the growing college enrollment, the lack of skilled workers is likely to pinch U.S. nuclear expansion. Speaking at an industry conference last week in Washington, Nuclear Regulatory Commission Chairman Dale Klein said the supply of workers is unlikely to keep up with demand, both at utilities and in government and military labs and agencies.

To date just 29 universities -- 10 percent of U.S. engineering schools -- offer nuclear degrees, half as many as did in 1980, according to figures from the Nuclear Engineering Institute, a trade association. This comes as a quarter of the nuclear engineers at U.S. utilities are poised for retirement beginning in 2012.

In addition, while other engineering graduate programs can turn to research grants from general science foundations, nuclear education traditionally has relied on Department of Energy funding because of national security concerns over radioactive fuel. But the DOE has proposed eliminating its $27 million in annual grants to graduate-level research at U.S. universities.

Klein urged the private sector to increase its funding to university nuclear engineering programs. One such effort is the certificate program begun at Pitt last semester. Pitt's offering -- which certifies that a student has completed five courses emphasizing nuclear engineering -- is funded by a $50,000 annual grant by Westinghouse, along with contributions from Bechtel Bettis Inc. and First Energy, which operates the two nuclear reactors in Beaver County.

"We expected modest enrollment," said engineering school dean Gerald Holder. "But in the first course, we got 70 students."

Most of those were seniors who wouldn't be able to pursue the full certificate, but still wanted to add some nuclear know-how to their repertoire, said instructor Larry Foulke, a retired Bechtel Bettis engineer. About 40 are enrolled in this semester's course, Fundamentals of Nuclear Reactors.

"We want these students to come out with knowledge -- maybe not with a lot of depth, but the ability to interface with reactor designers and all aspects of the nuclear business," Foulke said.

Baden resident Justin Sciulli, 22, a mechanical engineering senior, said he hopes to work at a nuclear plant after graduation.

"Maybe as a turbine specialist; it appears the industry is fairly strong here," Sciulli said. "Foulke is very involved. Since he just came from industry, his knowledge base is strong."

Field trips last semester included a visit to the small on-campus nuclear research reactor at Penn State, whose graduate nuclear engineering program -- founded in 1959 -- is one of the nation's oldest.

There, undergraduate enrollment is growing more than 12 percent annually, with 108 juniors and seniors registered now, Hochreiter said. That's in addition to 45 graduate students. Jobs, he said, are abundant and well-paying not just in industry, but at federal regulatory agencies.

Along with support for Pitt's program, Westinghouse offers on-site distance learning classes with Penn State, and about 15 of its staffers have obtained their master's degrees that way, said Dallas Frey, the company's staffing and organizational development director. Westinghouse officials will meet next month with Carnegie Mellon University staffers to discuss possible research or course work in robotics, software and materials that could have nuclear engineering applications.

Carnegie Mellon, which produced many master's and doctoral degree-holders who staff Westinghouse and Bechtel Bettis, shuttered its degree program in 1983 due to dwindling enrollment. A spokeswoman said there are no known plans to resurrect it.

"We're trying to be more content-focused at CMU," Frey said. "We're not trying to replicate what we're doing at Pitt."



Bonnie Pfister can be reached at bpfister@tribweb.com.

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China may alter locations of Westinghouse nuclear plants
Thursday, February 15, 2007


By Dan Fitzpatrick, Pittsburgh Post-Gazette



Nothing is ever certain when doing business with China, home to the world's fastest-growing economy.

Monroeville-based Westinghouse Electric Co. learned that lesson again this month as reports emerged about a potential change in location for two of the four nuclear power plants the Chinese asked it to build during a high-profile ceremony in Beijing in December. Now it appears French rival Areva SA may build two of those reactors in the southern part of the country, near the South China Sea, while Westinghouse may be asked to build all four of its reactors along China's eastern coast instead.

The switch, if it holds, is a major victory for the French government, which controls Paris-based Areva, and it may be the result of lobbying by French President Jacques Chirac, who was in Beijing last fall, and Areva Chief Executive Officer Anne Lauvergeon, who was in China at the end of January and signed a "preliminary agreement" with the Guangdong Nuclear Power Group Co., according to the China Business News.

Westinghouse is not concerned about the potential change to the multibillion-dollar contract. Spokesman Vaughn Gilbert said the company still expects to have a four-plant agreement signed this month.

"The four contracts we signed ... in December are completely valid," he said.

As to the final location of all four plants, "that's where there is some confusion," he said. The Chinese "may switch the locations around, but we are getting four, we will build four plants. Anything that may or may not come out is in addition to the four."

The Chinese nuclear deal is expected to generate as many as 5,000 U.S. jobs for Westinghouse, many in this region, where the company already employs 3,000 and may add 2,000 -- in part on expectations of the four Chinese plants and 12 other U.S. plants -- through an expansion of its research facilities either in Monroeville or Cranberry.

A Westinghouse decision on the local research expansion could be made as early as today, when its board meets on the issue.

There has been no official confirmation from the Chinese government about the switch in locations or the addition of two more plants for Areva, which appeared to lose out to Westinghouse last December.

The cloudiness is characteristic of what it is like to negotiate with the Chinese, "who are constantly making adjustments as circumstances warrant," said Louis Schwartz, president of Squirrel Hill-based China Strategies, which advises U.S. companies on how to do business with the world's largest nation.

Other Pittsburgh-area companies have learned that lesson in the past, sometimes painfully.

PPG Industries built two Chinese glass plants in the 1980s and early 1990s for $200 million only to learn the Chinese would not allow the company to sell its glass within the country. The Fortune 500 firm eventually sold its interest in the two plants and took a $102 million charge.

"What the Chinese are doing with Westinghouse is not surprising," added another Pittsburgh-based negotiator who deals frequently with the Chinese on behalf of local companies and requested anonymity. "They are masters at playing one company vs. another and that is part of how it works."

Political concerns also could be at play here.

Trade between China and the European Union rose more than 25 percent last year, Mr. Schwartz said, and China recently overtook the United States as the Europe's No. 1 source of imports. As an emerging world power, China is just as likely to give big airplane contracts to Chicago-based Boeing as it is to European aircraft maker Airbus, which is based in Paris.

"You really have to look at the whole range of relationships that might have impacted that decision," said Mr. Schwartz, of China Strategies. "Certainly, awarding a couple of power plants to the French might do something to make French authorities more amenable to the Chinese when it comes to other issues.

"It is not unusual for the Chinese, on the large high-profile big ticket items, to spread the wealth around the globe."

The French re-emerged as the potential builder of two nuclear plants last month, according to an article in the China Business News, which is a joint venture of Shanghai Media Group, the Beijing Youth Daily and Guangzhou Daily. The article was posted Feb. 7 on a Web site called the China Power Equipment Information Net.

A Chinese nuclear power "insider" quoted by the news service said Areva had been selected for two nuclear power plants in Yangjiang, a southern Chinese city about 150 miles west of Hong Kong, near the South China Sea. The source justified the decision to select Areva by saying that Westinghouse had a "simpler and safer design," but due to a long period of successful cooperation between the French and Chinese at another nearby nuclear plant, there would be no need for a "new adjustment process" as would be the case with Westinghouse's AP1000 technology.

The same source indicated that Westinghouse now would build two plants in Sanmen, about 150 miles south of Shanghai, and another two in Haiyang, a city in China's Shandong province. "Commercial negotiations" with Westinghouse, the news service reported, began on Jan. 15. The Wall Street Journal reported yesterday that another option is for all four Westinghouse reactors to be built in Sanmen.

Regardless of what happens, Westinghouse and Areva most likely will have to face each other again in China. The country wants to build more than two dozen reactors in the next 15 years to meet a target of receiving 4 percent of the country's energy from nuclear power, up from 2.3 percent today.

Much of the country currently is powered by coal -- a cheap but dirty material that has contributed to China's widespread pollution problems.

A Westinghouse spokesman said yesterday that the company continues to talk with the Chinese every day as the two sides hammer out a final four-plant contract. Mr. Gilbert admitted there had been "indications" elsewhere that the French might win two plants but "it caused no problems here at Westinghouse. It was not something that surprised us or has any impact on the four plants."

Still, he could not confirm that a change in location had in fact been made for two of the four Westinghouse plants. "Things we are told in commercial discussions are not things we would necessarily make public," he said. If there is a change, "it is up to the Chinese to discuss."


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(Dan Fitzpatrick can be reached at dfitzpatrick@post-gazette.com or 412-263-1752. )

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New and old economy meet at South Side Starbucks
Sunday, February 18, 2007

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Pam Panchak, Post-Gazette
Daniel P. Cirocco, left, of the South Side, and Bob Foster, of Mount Washington, chat at Starbucks on the South Side. Mr. Foster "saved my life," Mr. Cirocco said, by performing the Heimlich maneuver. "We were friendly before, but we didn't get close until then," said Mr. Cirocco.



By Corilyn Shropshire
Pittsburgh Post-Gazette
Nearly all of the dozen or so heads scattered about the South Side Starbucks on this frigid and snowy Thursday morning were covered or sprinkled with gray, the bodies beneath them clad in a similar cold weather uniform: loosely fit casual pants or jeans, chunky boots, bulky sweater --not exactly a motley mix.

So, it's anyone's guess as to who was sealing a technology deal or was simply lingering at 10 a.m., just after the weekday morning caffeine-rush.

Denizens of this watering hole say that's why they travel from parts as far as Cranberry and Coraopolis to revel in this particular "Starbucks experience."

Beyond comfy couches and strong coffee poured to folksy, jazzy sound tracks, it's where Pittsburgh's up-and-coming tech economy collides with its old world roots. It's close to many university and startup research offices now straddling both sides of the Monongahela River where steel factories once sprawled, and to side streets whose clustered residences once housed the workers in those mills and still are home to many retirees and younger tech workers.

On this bitterly cold morning last week, a silver-haired, pony-tailed man who goes only by the name of "Finn" gabbed with 63-year-old retiree Daniel P. Cirocco as he balanced a laptop and browsed for airline flights.

Huddled over a long table in the back of the room, Joe Stafura and John Riley were speaking in hushed voices. Former veteran tech executives who now spend their days investing and advising startups, the duo met for an impromptu brainstorming session for their next top-secret startup.

"It's like speed dating," Mr. Riley said of why he likes to do business in this coffee shop. "Nobody owns the space and you get a chance to quickly assess the idea, the person and their logic."

Banishing business turf wars, this Starbucks on East Carson Street mirrors Boston's Trident Bookseller's & Cafe or Sonsie Restaurant -- well-trafficked hangouts in the technology startup scene that even non-techies filter through.

These work nests away-from-the-office are increasingly popular in the post-bubble world, survivors of the bust say.

In the "old bubble days," large "plushed-out" offices stocked with finely roasted free coffee were matched by power lunches catered by Prestogeorge, said Mr. Stafura.

"Nowadays, you have six to eight guys working in a room together to get a company going."

Actually, there are 10 guys working in an open space -- no cubicles -- a few blocks away at young robotic device firm MobileFusion, whose Chief Executive Officer Ric Castro remembers easy money in the '90s, a lot of which he believes was spent haphazardly.

Fast forward a decade, and the new plush is a $10 gift card that can be used to woo potential investors with dressed-up coffee and cookie that is nibbled alongside the masses.

The South Side Starbucks is perfect, its business-minded enthusiasts say, because it is a quiet, centrally located office outpost that is ideal for interviewing prospective hires, courting investors, conducting performance reviews and doing everything else that's necessary to move ideas from the labs to the marketplace. "You get the coffee, and it's generally on the quiet side," said Mr. Castro.

Despite averaging five to eight meetings a week at Starbucks, Mr. Castro looks out of place on this Thursday. Wearing a suit and tie topped off with well-coiffed hair, he looks more posh Wall Street corner office than cozy-casual coffeehouse.

When the crowd begins to scatter at noon, the man known as Finn, unhappy with his free wireless Web connection at Starbucks, heads across the street to the Beehive, where the Wi-Fi Internet connection also is free and, according to Mr. Stafura, the clientele is equally as techy, with a more artistic, musical and quirky flair.

Mr. Stafura said he's always frequented both coffee shops, and even helped develop the video gaming startup ImpactGames, where he's vice president of sales and marketing, inside the Beehive's brightly colored walls until finding more permanent digs down the street. He believes Starbucks is more appealing to the business community because it's nonsmoking; the Beehive has a designated smoking area.

Some say Starbucks and business go hand-in-hand since the straitlaced advisers to companies -- accountants, lawyers and the like -- seem to prefer the ubiquitous Seattle-based chain. The Beehive can draw a focused entrepreneur into "deeper distractions" said another startup chief and Starbucks fan, Alan Shaffer.

And the business types don't mind shelling out close to $4 for the South Side Starbucks' special "Bob Foster" drink: a double-short, no foam, extra-hot, nonfat latte -- a mix of skim milk and two doses of espresso served at sizzling temperatures. It's named for the semi-retired Mount Washington resident who comes in every day to drink it -- and to avoid the isolation of writing by spending hours at the shop, vacillating between reading, writing and chatting with his friends.

Mr. Foster, who said he retired in 2004 after a 40-year career in social work, is among the collection of retirees who baristas say add to the Starbucks' ebb and flow of noise and traffic as they spend hours bantering with new and old friends who pop in and out of the shop.

At around 2 p.m., the tech crowd has dispersed but the Starbucks begins to pick up from the lunch lull, with the in-need-of-a-post-lunch-jolt crowd.

That's when Mr. Cirocco appears again and plops down in the chocolate-colored velvet chairs to visit his friend, the immortalized-in-a-coffee-drink Mr. Foster.

He begins to explain how this bustling coffee shop is the launchpad of not just a smattering of tech firms, but a friendship.

The two men, both 63, were merely casual acquaintances before last year when Mr. Foster "saved my life," Mr. Cirocco said, by performing the Heimlich maneuver on him as he choked on a Burger King biscuit lodged in his throat.

"We were friendly before, but we didn't get close until then," said Mr. Cirocco. "He'll always be my hero."

"I regret it," Mr. Foster said, blushing with a smile. "Once you get him going, you can't stop him."


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(Corilyn Shropshire can be reached at cshropshire@post-gazette.com or 4120-263-1413. )

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Pittsburgh networking no problem for young entrepreneurs
Sunday, February 18, 2007

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Bill Wade, Post-Gazette
Jeff Maki, left, new products lead, and Nathan Martin, chief executive officer, along with Carl DiSalvo (not pictured) founded DeepLocal Inc., which creates software than allows communities to share information on the Internet.



By Corilyn Shropshire
Pittsburgh Post-Gazette
Less than a decade ago, Nathan Martin was a punk-rocking artist-cum-activist whose network consisted more of politically driven hackers and anarchists than profit-hungry investors.

Now, on the verge of turning 30, Mr. Martin isn't any less of a rebel, but he's channeled his purpose into a money-making software venture, DeepLocal Inc.

He's among a small gang of twenty- and thirtysomethings -- some natives, others newcomers -- who have chosen Pittsburgh as the ideal launch pad for their businesses for reasons that would seem to be less-than-ideal: The city's old fashioned clubbiness, they say, is more opportunity than obstacle.

That Pittsburghers are rumored to have two or three degrees of separation between them rather than the standard six actually has helped Mr. Martin and his partners, Jeffrey Maki and Carl DiSalvo, grow their not-yet-year-old firm.

"It's easy to be well-networked in this city," said the Greensburg-bred Mr. Martin, who lived in San Francisco at the tail end of the dot.com gold rush but later returned to be an artist-in-residence at Carnegie Mellon University.

The company, which is developing Web-based software that allows users to collect and share information to create maps, grew out of a project he started while at CMU.

Everyone in Pittsburgh is connected in some way, it seems, whether professionally, socially or genetically -- and sometimes, a combination of the three. So word spreads fast if you're doing good work or bad, according to Mr. Martin. And connections are made sometimes in unlikely ways. He pointed to DeepLocal's first programmer, Scott Connelly, whose mother sold the Squirrel Hill home of the firm's chief financial officer, Beth Friel.

While Pittsburgh's fabled small-town closeness is smothering for some, for a young business just getting started, having your name and story spread like spilled milk can be an advantage.

It certainly helped 25-year-old Baltimore-native and CMU graduate Shanna Tellerman, who wasn't thinking that her graduate school project developing software that simulates real-life emergency situations would morph into a business, SimOps Studios. It did when, in less than a year, introductions made by a CMU professor and a local tech attorney led to a slew of e-mails and phone calls that led to coffee dates and more connections.

"If I came to this city cold," the 25-year-old Ms. Tellerman, said, "I'm not so sure those doors would've been so easily opened."

Drawn to the universities and persuaded to stay by the city's affordable, easy-living amenities, this group of business upstarts also is cracking the mold of the typical business-minded, buttoned-down Pittsburgh entrepreneur -- and using their differences to stand out in the crowd.

It shows, since some of the area's most-talked about young tech firms are led by young anti-geeks, with roots steeped in disciplines such as art or design -- not in business, engineering or number crunching.

Like DeepLocal's Mr. Martin and SimOps' Ms. Tellerman, Eric Brown is an artist whose socially focused video gaming startup, ImpactGames, seemed to naturally emerge from a research project he and partner Asi Burak, a former Israeli intelligence officer, were doing as graduate students at CMU's Entertainment Technology Center. Simulating conflict in the Middle East, "PeaceMaker" plants players in the shoes of the Israeli prime minister or Palestinian president dealing with a violent event. What these company chiefs lack in experience is offset by passion and other skills that are helping them get ahead, say some of the business veterans who are assisting them. They are "natural networkers," said Michael Matesic, CEO of Idea Foundry, the Oakland-based tech startup generator.

"There's an openness that comes with their backgrounds that enables them to interact with broad groups," he said.

Mr. Martin considers it part of his job as DeepLocal's CEO "to get people excited [about his firm]. It's not much different from my role being a singer in a band."

They also are young and look it. Long and lanky, Mr. Martin sports a "faux hawk" haircut that, he says, is the closest he's ever been to looking like a CEO.

Then there's Marcel Bruchez, a Silicon Valley transplant who's tongue piercing could belie the fact that he co-founded and ran a biotech firm that he sold in 2005.

Dr. Bruchez, 37, a chemist who's mulling starting his second biotech startup in Pittsburgh, has "the advantage" of having his accomplishments offset any potentially raised eyebrows over his "nontraditional" appearance. He figures his nontraditional look probably reminds the business people he meets of their children, and it plants him firmly in their memory.

And while California may have a reputation for being more open to the looks and ambitions of young turks such as Dr. Bruchez, Pittsburgh's strengths -- affordable, easy-living -- make it an attractive spot for a growing group of Generation X and Y'ers to plant their firms.

"The rent is low, the talent is here, people are looking for a place to stay -- there just aren't [enough] jobs," Dr. Bruchez said, a problem he hopes to help solve when he launches his firm.

Pittsburgh's selling point, these entrepreneurs say, is the ability for newcomers to the city's business scene to find open doors to money, advice, workers and customers -- not to mention the exposure that being connected to the universities provides.

But Mr. Martin cautioned that Pittsburgh's close-knit coziness can also bite. "You don't want to burn bridges ever in Pittsburgh. It lasts a lot longer than it might in other cities."


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(Corilyn Shropshire can be reached at cshropshire@post-gazette.com or 412-263-1413. )

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http://www.expansionmanagement.com/smo/newsviewer/default.asp?cmd=articledetail&articleid=18375&st=3

PDF LIST:
http://www.expansionmanagement.com/smo/DocReserve/DocReserve_Content/1-List%20of%2050%20Hottest%20Cities(2).pdf

2007 AMERICA’S 50 HOTTEST CITIES: Perception Is a Critical Factor in Attracting Expanding Companies

Click on "Related Link" to read PRESS RELEASE
Our annual poll of 80 prominent corporate site location experts give us their list of the best places to expand or relocate a business.


[ 2/18/2007 ] By: Ken Krizner, Managing Editor


Companies that are contemplating an expansion or relocation of their manufacturing facility, headquarters or back office operations have a certain set of criteria they use to make the most informed decision possible.

It is one of the most important decisions a company can make. It will impact your company — positively or negatively — for years to come. Quite frankly, if you make the wrong decision, you might find it hard to recover.

Companies often employ the services of a site location consultant to do the heavy lifting of expansion projects. Using the company’s criteria, the consultant goes out and develop a list of potential candidate-cities for the project.

As the list of potential sites narrows to the final two or three, you’ll likely find that each one ranks very highly in your criteria — the tangible. So, how do you choose the very best site based on your company’s expansion needs?

At this point it comes down to perception — the intangible. How does a particular city feel to the executive who ultimately has to make the decision of where to expand or relocate?


We asked 80 prominent site location consultants, based upon their experiences during the past two to three years (and those of their clients), to list their choices for the nation’s best cities for expanding and relocating companies.

Perception is a very important aspect of the site location project, and it is precisely why Expansion Management has, since 1999, presented the America’s 50 Hottest Cities listing.

Unlike our other research studies and rankings, this is a poll is based strictly on perceptions, rather than cold, hard data. We asked 80 prominent site location consultants, based upon their experiences during the past two to three years (and those of their clients), to list their choices for the nation’s best cities for expanding and relocating companies. We asked the consultants to rank the metro areas according to such factors as business environment, work force quality, operating costs, incentive programs, work force training programs, and the ease of working with the local political and economic development community.

The goal is to get their impressions as to which cities are the hottest in terms of attracting expanding and relocating companies. As in the past, the identity and responses of the consultants are kept strictly confidential.

The consultants are asked to consider all 362 Metropolitan Statistical Areas as defined by the Office of Management and Budget. Therefore, the cities that comprise America’s 50 Hottest Cities are in the top 14 percent all metros in the United States. Simply making this list means that these metros, in the eyes of the premier site location consultants, are in the upper tier of cities for expansion and relocation opportunities.

Unlike in previous years, this year’s 50 Hottest Cities list is presented alphabetically because, in the opinion of both the editors and the site location consultants, focusing strictly on a numerical ranking diminishes the importance of simply making the list.


The Pittsburgh metro takes its relationship with consultants seriously.

“Site selectors are a very important source of qualified project leads for the Pittsburgh region,” said Dewitt Peart, executive vice president of economic development for the Allegheny Conference on Community Development. “In every case, we strive to provide the information and services necessary to win the deal.

Parametric Technology Corporation (PTC) will locate their on-shore product development solutions center in Uniontown, Pa., in the Pittsburgh metro. PTC will create 125 engineering jobs.

Boston-based PTC develops, markets and supports software solutions that assist business and government organizations improve the competitiveness of their products and product development processes.

“This is the most significant company project for downtown Uniontown and Fayette County in many years,” said Mike Krajovic, president and CEO of Fay-Penn Economic Development Council. “PTC is a great addition to the growing cluster of advanced technology companies that have made their homes in the county.”

Across Pennsylvania, the Philadelphia metro is building on its cluster of pharmaceutical companies. That cluster, in part, helps attract foreign pharmaceutical companies to the metro.

Lundbeck USA, a subsidiary of Denmark-based Lundbeck, will base its U.S. commercial headquarters in the Philadelphia metro. Lundbeck estimates hiring more than 300 employees nationwide during the next several years, with 50 to 75 employees in the Philadelphia metro.

“We evaluated several potential locations,” said Patrick Cashman, president of U.S. Sales and Marketing Operations for Lundbeck. “Greater Philadelphia was the most attractive because of the proximity to key talent, a community of pharmaceutical leaders and a state government that cares about the life sciences.”

Thomas G. Morr, president and CEO of Select Greater Philadelphia, which markets the region nationally and globally, said consultants remember the communities that provide quality information on a tight deadline.

“Corporate site consultants evaluate communities to secure the best fit for their client's business needs,” he said. “Economic development groups like Select Greater Philadelphia that provide reliable data, market insight and business community connections help consultants and their clients succeed. It’s an economic win-win.”






CLICK HERE TO SEE THE LIST
http://www.expansionmanagement.com/smo/DocReserve/DocReserve_Content/1-List%20of%2050%20Hottest%20Cities(2).pdf

[Wheelingman04]

^ Good news for both of Pennsylvania's great major cities.

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http://www.post-gazette.com/pg/07052/763620-192.stm

The German connection: Gov. Rendell meets delegation to cement local ties
Wednesday, February 21, 2007

Pittsburgh Post-Gazette

Growing trade and investment relations between Western Pennsylvania and Germany brought Gov. Ed Rendell to Pittsburgh last week to sign a cooperation agreement between the state and the German state of North Rhine-Westphalia.

Hosted by Bayer, the area's largest German-based firm, North Rhine-Westphalia Minister President Jurgen Ruttgers visited Pittsburgh on Thursday with a large delegation of business and government officials. What moves the state-to-state relationship into the "out of the ordinary" category is the extent of business and other relations between them and the particular concerns that they share.

Scrambling to stay ahead of China as the world's third-largest national economy, Germany is the largest foreign investor in the Pittsburgh area. There are 70 German firms represented, with 140 establishments and thousands of employees. Of the 70 firms here, 43 percent of them are based in North Rhine-Westphalia. Mr. Ruttgers says they employ 10,000 to 15,000 people. Twelve of Germany's 20 largest companies are active in Western Pennsylvania. Germany is Pennsylvania's seventh-largest customer, with exports exceeding $1 billion per year. Ten of the top 50 Pittsburgh companies have a presence in Germany.

The state of North Rhine-Westphalia is the world's 15th-largest economy; Pennsylvania is 17th. In light of increased world interest in clean energy, both states are focusing on the development of carbon-free coal technology. Mr. Ruttgers' visit signaled new German investment in that area.

On the lighter side, a new Hofbrauhaus, part of the Munich-based brewery-restaurant company, plans to open a new 17,000-feet showcase in the Southside Works this year. Pittsburghers were perhaps startled to learn that one-fourth of the city's population claim German ancestry -- the largest group -- given the apparent predominance of other ethnic groups in the city's provenance and governance.

The meeting of Govs. Ruttgers and Rendell here to sign a trade and investment agreement made it clear that there is plenty of meat, as well as froth and culture, in the relationship.

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http://pittsburgh.bizjournals.com/pittsburgh/stories/2007/02/19/daily17.html?t=printable

Local Mitsubishi unit to expand, add jobs
Pittsburgh Business Times - 9:16 AM EST Wednesday, February 21, 2007
Mitsubishi Electric Power Products Inc. said it will expand operations at its Marshall Township headquarters and add 75 jobs.

As reported in the Pittsburgh Business Times on Feb. 2, the company will add nearly 100,000 square feet of office, warehouse and production space adjacent to its current facilities at the RIDC Thorn Hill Industrial Park in Marshall Township.

"Mitsubishi's expansion in Warrendale is great news for Allegheny County and Southwestern Pennsylvania," Allegheny County Chief Executive Dan Onorato said in a statement. "It ensures that we will retain the company's 350 current positions, and it also brings the promise of 75 new high-paying jobs in the next three years."

Allegheny County provided a $100,000 Community Development Block Grant to help with the purchase of new equipment and a $100,000 grant from the Department of Human Services for specialized training for new employees.

Earlier this month, a spokeswoman for AstenJohnson, a Charleston, S.C.-based maker of a fabric used in the paper-making process, confirmed that its 93,000-square-foot building was under agreement to Mitsubishi Electric.

The facility, built for AstenJohnson in 1988, sits on about 22 acres at 520 Keystone Drive, according to the Allegheny County Office of Property Assessment. The county has assessed the property's market value at $4.58 million.

Since moving to Thorn Hill in 1989, Mitsubishi Electric, a division of Tokyo-based Mitsubishi Electric Corp., has invested $12 million in capital improvements in its local campus.

Mitsubishi Electric Power Products, which manufactures ozone water purification systems, mechanical circuit breakers and propulsion systems for commuter railways, was formed in 1985 as a joint venture with Westinghouse Electric Co. In 1989, Mitsubishi took control of the company when it purchased Westinghouse's 50 percent stake.

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http://pittsburgh.bizjournals.com/pittsburgh/stories/2007/02/19/daily16.html?t=printable

US Airways picks Pittsburgh for operations center
Pittsburgh Business Times - 11:31 AM EST Wednesday, February 21, 2007
US Airways Group Inc. chose Pittsburgh for its $25 million flight operations center, the airline confirmed Wednesday.

Tempe, Ariz.-based US Airways (NYSE:LCC) said Pittsburgh won the bidding over Phoenix and Charlotte, N.C., for the operations center, a deal that brings with it 150 new jobs and keeps 450 in the region. Salaries at the center would average about $40,000 per year, US Airways said.

"We gave careful consideration to proposals from Phoenix, Charlotte and Pittsburgh, and all three cities gave compelling reasons to consider those proposals," said US Airways president Scott Kirby.

"However, we chose Pittsburgh for a variety of reasons, including the impact of relocating experienced employees from the Pittsburgh area and the amount of value created for US Airways in the Pittsburgh proposal," he said.

US Airways said the new operations center will be about 60,000 square feet, located on a 10-acre site. Groundbreaking for the project is slated for later this year. The first day of full operation is scheduled in early 2009.

Pittsburgh's offer for the operations center included $3 million in state and county grants, $12.5 million in loans and $750,000 in state tax credits tied to the number of jobs created by the project.

Phoenix's offer was about $36 million in grants and loans. Charlotte did not disclose its bid.

US Airways opened its Pittsburgh center 10 years ago to monitor the schedules and fueling of its East Coast and international flights.

The deal is a reversal of course in Pittsburgh for US Airways, which has cut flights and moved jobs from its one-time hub city. The airline's employment in the Pittsburgh region has dropped from 11,100 in 2001 to about 2,700 currently.

In 2004, US Airways drastically cut its flights in Pittsburgh, but is still the dominant airline, with about 150 flights daily.




...

we peaked with over 500 US flights in 2001

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Boo! Hiss! I hate you, Hilary! We're only getting 70 nuclear engineers instead of the 260 originally planned!

http://www.post-gazette.com/pg/07053/763976-28.stm

Bechtel scales back shift of jobs to region
Thursday, February 22, 2007

By Dan Fitzpatrick, Pittsburgh Post-Gazette

Bowing to pressure from the one-two punch of New York's Hillary Rodham Clinton and Charles Schumer, nuclear engineering firm Bechtel Plant Machinery decided yesterday to scale back the planned transfer of 260 positions from eastern New York to Monroeville -- bringing only 70 jobs here instead.

Rather than closing its plant in Schenectady, N.Y., as planned, Bechtel now promises to keep the facility open and employ 130 there. Another 60 will retire, while 30 more will have the option of interviewing for positions in Niskayuna, N.Y.

The U.S. senators boasted yesterday of the turnabout.

"We snatched a victory from the jaws of defeat," said Mr. Schumer.

The 70 engineering jobs being sent to the Pittsburgh area will be housed inside a former railroad building in Monroeville being renovated for another 550 Bechtel employees who work at an office park in Wilkins. Bechtel last year signed a 15-year lease with The Elmhurst Group for the 120,000-square-foot space.

Bechtel Machinery, a unit of the $18 billion San Francisco-based engineering and construction giant Bechtel Corp., maintains nuclear propulsion components for ships operated by the Navy. The unit was once part of Westinghouse Electric's Pittsburgh-area conglomerate.

Last year, Bechtel officials began looking at the possibility of consolidating its Wilkins and Schenectady operations in one city. In October it announced plans to move about 260 jobs from Schenectady to the Pittsburgh area, leaving only 70 jobs in eastern New York.

But New York's senators and U.S. Rep. Michael McNulty intervened, asking Bechtel to reconsider the decision, saying the move was made without consulting Congress, the state of New York or the city of Schenectady. New York Gov. Eliot Spitzer also got involved. Bechtel agreed to postpone the move for 60 days -- a period that expired this month.

In confirming the compromise, a Bechtel spokesman said the agreement provided "stability" for its Schenectady work force while meeting the "efficiency goals we needed to achieve for the Navy."


--------------------------------------------------------------------------------

(Dan Fitzpatrick can be reached at dfitzpatrick@post-gazette.com or 412-263-1752.)

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http://www.post-gazette.com/pg/07053/764099-28.stm

Location, incentives helped land new US Airways center
Airline's decision creates 150 jobs, retains 450 others, helps to mend fence with officials here
Thursday, February 22, 2007

http://www.post-gazette.com/images4/20070222lf_usairwaysPJ01_450.jpg

Lake Fong, Post-Gazette
From left, Allegheny County Airport Authority Board Chairman Glenn Mahone, US Airways president Scott Kirby and County Chief Executive Dan Onorato react to a a remark by Gov. Ed Rendell during the news conference yesterday at Pittsburgh International Airport.



By Dan Fitzpatrick, Pittsburgh Post-Gazette



As politicians hailed US Airways' decision yesterday to build a new flight operations center in Moon, gone were the memories of US Airways' 10,000 local job cuts, the elimination of nearly 400 daily flights and broken promises that nearly destroyed a relationship between the airline and local airport officials.

"I know it's been contentious," Allegheny County Chief Executive Dan Onorato said to US Airways President Scott Kirby as the pair stood in front of a ticket counter at Pittsburgh International Airport, where Mr. Kirby announced the coveted $25 million, 600-person project would go to Pittsburgh over Phoenix and Charlotte, N.C. But "we have come a long way."

US Airways' painful decision to drastically cut its work force and flights here following a post-9/11 collapse of the U.S. airline industry was a result of Pittsburgh's poorer economic standing relative to other cities and its unprofitability as a hub. But yesterday's decision -- made by a new management team that took control following a 2005 merger with America West Airlines -- was symbolic of the positive role Pittsburgh can still play for the airline, now based in Tempe, Ariz.

Not only does the Pittsburgh area gain 150 technical jobs paying $50,000 apiece as a result of retaining the flight center, but it retains another 450 it might have lost had the contest been won by Phoenix or Charlotte.

US Airways picked Pittsburgh in part because of its respect for the 450 people who already work inside an operations center in Findlay, one of two centers that track and control all flights for US Airways at computers and on a big display board that tracks flights and weather across the country.

Pittsburgh's proximity to the East Coast was a plus, as well. The U.S. flight schedule begins each morning at 5 a.m. Eastern time, making a center located several time zones to the west more difficult, logistically, to operate. Acting as the "brain" of US Airways, the operations center will be responsible for 1,400 daily mainline flights -- pilots cannot take off or land without its approval.

It also helped that the state and Allegheny County offered a $16.25 million incentive package that includes $3 million in state and county grants, $12.5 million in loans and $750,000 in state tax credits tied to the number of jobs created by the project.

Still, "this wasn't an easy decision," Mr. Kirby said -- particularly with Phoenix reportedly offering $36 million in incentives and Charlotte still serving as the airline's largest hub with 534 daily flights.

Pittsburgh did not increase its offer as it might have in the past to keep a major job center here, perhaps a reflection of being burned in the past but also a recognition of the behind-the-scenes work done by Allegheny County Airport Authority Director Kent George.

Mr. George, observers said, was the person who pulled it all together, but as is his style, he remained in the audience at yesterday's airport news conference, while Gov. Ed Rendell and other politicians and executives stood in front of the microphones and cameras.

"Pittsburgh deserved this," Mr. George said.

The upbeat attitude of Mr. George yesterday was perhaps the clearest indication of improved relations between Pittsburgh and its largest air carrier. It was Mr. George who worked with US Airways through its two bankruptcies, as it stripped Pittsburgh of its hub status and slashed flights and close to 10,000 jobs -- it employs 2,700 now, down from 12,700 prior to 9/11.

The low point in his relationship with the airline came in March 2003, as US Airways emerged from its first bankruptcy and rejected its leases with the airport authority, the airport's owner and operator, 21 minutes before escaping bankruptcy protection. Local aviation officials, caught off guard by the move, later referred to the action as a "stealth attack" and claimed the 11th-hour decision violated a promise made only weeks earlier. "We were lied to," said airport authority solicitor Jeff Letwin, in 2004.

When US Airways merged with America West, though, the relationship improved dramatically. Just before the deal was closed in 2005, Mr. George met with the new management team, led by 45-year-old Doug Parker, and "that is when the tide turned," Mr. George said. He liked the fact that Mr. Parker was honest, even blunt at times. "When he couldn't do something, he let you know he couldn't do something."

Another step forward was a five-year lease US Airways signed last year to do heavy and overnight aircraft maintenance work at Pittsburgh International, bringing some stability to the jobs of 1,200 area airline maintenance workers.

The leadership, Mr. George said, is "respectful, above board, truthful and clear. Very direct -- that's good."

US Airways intends to break ground on its Moon operations center later this year. It selected a 10-acre site off Ewing Road on property owned by Allegheny County.

The center will be ready in 2008, but the first full day of operation will not be until early 2009. US Airways has agreed to a 20-year lease with two 10-year options. It also will have another 20,000-square-foot building nearby as a backup center.

Pittsburgh was such a strong candidate for the center that a proposed takeover of Atlanta-based Delta Air Lines -- a bid rejected by Delta creditors last month -- would not have made any difference in the decision announced yesterday.

"We would have still put it here," Mr. Kirby said.


--------------------------------------------------------------------------------

( Dan Fitzpatrick can be reached at dfitzpatrick@post-gazette.com or 412-263-1752. )

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http://www.pittsburghlive.com/x/pittsburghtrib/news/cityregion/s_494386.html

Region lands US Airways flight center

http://www.pittsburghlive.com/photos/2007-02-21/0222rusair-a.jpg
As Governor Ed Rendell and County Executive Dan Onorato smile in the background, US Airways President Scott Kirby announces Wednesday that Pittsburgh has been selected for the site of the airline's new flight operations control center.
Keith Hodan/Tribune-Review

By Thomas Olson
TRIBUNE-REVIEW
Thursday, February 22, 2007


Pittsburgh beat out Charlotte and Phoenix for US Airways' $25 million flight-operations control center because of its experienced work force and area officials' well-orchestrated lobbying, including incentives, the airline's president said Wednesday.
The facility will be on 10 acres southeast of Pittsburgh International Airport along the airport corridor off Business Route 60. Construction will begin this fall on the single-story building about the size of a football field and it should be up and running by spring 2009.

The center will house the 450 US Airways employees who work at the airline's nearby flight center in Findlay, plus 150 employees to be added soon after that, US Airways President Scott Kirby said at an airport news conference.

Such high-security facilities are the nerve center of an airline, using sophisticated computers to monitor weather conditions, aircraft locations and flight plans in real time. The center will plan and track the airline's 1,400 daily flights systemwide, and schedule and support their flight crews.





Pennsylvania and Allegheny County offered $16.25 million in grants, tax credits and loans to win the center. Phoenix, where US Airways has a smaller flight control center, offered $25.3 million worth of incentives. Charlotte's offer was never disclosed.

"It wasn't just financial" incentives, Kirby said. The airline was swayed by "a remarkable coalition" of public officials from the region. "They let us know from the start they didn't want to lose this facility."

The selection marked a turning point in US Airways' downsizing of its Pittsburgh operations. Since late 2001, it has cut 9,000 local jobs and two-thirds of its daily flights.

Gov. Ed Rendell, among the many public officials at the announcement, said US Airways made "an enormous commitment to the region because it recognizes the outstanding caliber of its local employees."

The airline has been using its flight center at RIDC Park West, as well as the America West Airlines' facility in Phoenix, since the carriers merged in September 2005.

"The great work force" at the Findlay site played into the airline's choice, Kirby said. It was "more efficient" to consolidate in Pittsburgh, he said, and the choice would mean "the least disruption" for employees.

Local workers were relieved.

"It's a big monkey off our back. It means no move to the desert," said airline operations manager Ron Erdmann, 48, of North Strabane, who's been with US Airways 19 years, eight of them in Pittsburgh. "We'd been in limbo since the merger."

Steve Holliday, of Moon, manager of system scheduling who has worked 19 years at the Findlay center, said he and his fellow employees were very excited at the news. He had not decided whether he would relocate if US Airways had picked Phoenix or Charlotte.

"I kept my options open. Pittsburgh's been my home, and I'm very ecstatic that it will remain here," Holliday said.

US Airways' board of directors met over the weekend to make the decision. It had said it would select a site by the end of February.

"The Pittsburgh region has the fundamentals in place to make us competitive with areas like Charlotte and Phoenix," said Michael Langley, CEO of the Allegheny Conference on Community Development. "When you stack up issues like quality of life, housing costs, the availability of educational resources, it's a great place to work and raise a family."

The decision marks the second time in two months that Pittsburgh has bested Charlotte for significant economic developments.

The region had been competing with Charlotte since spring to land a complex for 1,000 to 2,000 nuclear engineers being hired by Westinghouse Electric Co. In early December, the company picked the Pittsburgh area and will soon choose between sites in Monroeville and Cranberry.

"I've been smiling all day," said Allegheny County Chief Executive Dan Onorato.

"It's 600 good-paying jobs," he said, noting the average pay is about $50,000. "This could have been a 450-job loss."

"We can compete, whether it's with the Southwest or anywhere in the United States," said Onorato, adding the region offered a "competitive" package. "We did not get into a bidding war, and we made the case why it should be here."

Onorato said the news signaled US Airways is "recommitting itself" to Pittsburgh and its airport after the past five years, when Western Pennsylvania and the twice-bankrupt airline had a "contentious" relationship.

US Airways has slashed its Pittsburgh flights and work force drastically since 2001. Daily flights dropped to 164 from a peak of more than 500 in 2001. The airline cut more than 9,000 jobs in that time to only 2,900 today. That contrasts with roughly 5,000 in Charlotte, which remains a hub for US Airways.

More than 800 employees in Green Tree lost their jobs in spring 2005 when the airline moved the reservations center in Pennsylvania to Winston-Salem, N.C. That happened despite Allegheny County presenting US Airways with an incentives package in December 2004 that county officials contended was superior.



Thomas Olson can be reached at tolson@tribweb.com or (412) 320-7854.

[vertex]

:previous: Hey Pittsburgh!

You're welcome. :tup: