Dean Barber

The Journey of a Hungry Caterpillar

In Uncategorized on November 18, 2012 at 7:01 am

As a business consultant, a site selection consultant, I do my best to not allow my emotions or personal biases rule, knowing full well that there is always an emotional aspect to decision making.

And while I may consider myself a Southerner, and now a Nuevo Texan, for reasons of credibility, I cannot afford to be a homer for any particular place or region. Indeed, if I am serving a corporate client to the best of my abilities, I should be prepared and open to the idea of assisting a company locate and start operations from Maine to California, from Canada to Mexico.

My motto is that I will take a company to where it needs to be and that means playing no personal favorites.

Unlike real estate brokers, most of whom do not think in terms of a comprehensive site selection process, I offer my services for a flat fee. I want no nagging perception that I might be channeling a client to a particular place, building or site, where I might make more money via commission. Homey don’t play that game.

And while I cannot and will not play favorites in my consulting capacity, that is not to say that I do not come upon places, communities, that I naturally like.  Such is the case with Pittsburgh. I suspect that it’s my background, the fact that I grew up in a manufacturing family and that my father was from Pittsburgh that I feel a certain affinity for the city, even though I never lived there.

Images of Rocky

Pittsburgh reminds me of Rocky Bleier, who as an infantry grunt in Vietnam was shot in the left thigh and took grenade shrapnel in his right lower leg, only to subsequently become a highly effective running back with the championship Steelers and wear four NFL Super Bowl rings.

By the same analogy, Pittsburgh had its entire leg blown off with the collapse of Big Steel in the 1980s, but like Rocky, the city refused to be beaten. In short, Pittsburgh and the surrounding area had to endure a lot of pain to come back.

But taking away for a moment any personal biases, Pittsburgh truly has transformed itself from an almost total reliance on heavy industry to a more interesting place where universities, finance, health-care, energy, and even the movie industry is making a mark.

But manufacturing never died here. Far from it. There remains 3,000 advanced manufacturing firms in Pittsburgh and the surrounding area. U.S. Steel is spending between $500 million to $600 million to modify and modernize its Clairton Coke Works, whereas Allegheny Technologies is spending $1.5 billion in expanding its Brackenridge steel plant.

And it’s that manufacturing tradition that still provides a backdrop in attitude and work ethic. Things get done here.

Background: I was in Pittsburgh earlier this week as the guest of the Pittsburgh Regional Alliance. The PRA brought in a group of eight of us, a mix of site selection consultants and real estate investors, as they wanted us to see how things have changed. I do not and will not make a practice of writing a blog about every place that I visit, but sometimes a story is just worth telling.

Hip and Googly

So I am standing in the corporate headquarters of American Eagle Outfitters on what is becoming the entertainment district of the Pittsburgh’s South Side, located along the Monongahela River an across from the downtown. CEO Robert Hanson is an obvious hipster, even if he is an adroit businessman with ambitious plans to grow his teen retailing company with a 1,000 stores and presence in 77 countries.

Hanson does not look or talk like a senior executive of Alcoa or US Steel, two stalwarts of the Pittsburgh manufacturing tradition. Rather, here is a jean-wearing executive who you sense is perfectly comfortable in the arts scene in San Francisco or New York or even Paris, talking to us about the growing cultural offerings of Pittsburgh.

Next stop is Google at Bakery Square, where they have chicken coops on the roof of a former Nabisco bakery, minus the chickens, because the company has not yet gotten city approval. I would be more impressed with goats, but chickens are probably more manageable. The idea, of course, is to serve fresh eggs to the Googlers in the building.

They are a young crowd, working on some of Google’s most important engineering initiatives, from Shopping to Search to Android.  And when they are not working, the theory is that they are thinking about work when they are getting back massages, playing pool, playing tunes in the music room, or chilling in the library or multiple kitchens. Well-behaved dogs wander about.

Google’s motto: “Do cool things that matter,” and that is quite in evidence here in a location that is only eight driving minutes from Carnegie Mellon University. The university has resided in Google’s inner circle of influence ever since the company initially opened an engineering lab on campus in 2005. It moved to Bakery Square in 2010.

The Worm Turns

The way I see it, if Pittsburgh, once one of the oldest cities in America in terms of demographics and now a place where young people appear to be flocking in greater numbers, can be Googly, well, then you know that it must be a sign from Heaven Above. I can most assuredly proclaim that Pittsburgh is now cool.  Now who would have thought that?

“There is a metamorphosis taking place in Pittsburgh,” said Stuart Hoffman, chief economist for PNC Financial Services Group, Inc. “We were that hungry caterpillar for the last 15 or 20 years and now we are a pretty powerful butterfly.”

Civic leadership, a cooperative spirit between government and business, a welcoming attitude toward diversity and the natural resources have turned a dark and dreary place, almost eastern European city, into a vibrant “New Pittsburgh,” where young people walk, bike and skateboard to work in distinct neighborhoods featuring libraries, museums and restaurants. Never mind there are 36 colleges and universities in the region, serving as a youth magnet.

Game Changer in the Works

Probably the biggest and most exciting thing on the horizon, and which truly bodes well for the Pittsburgh and the surrounding region’s future is on the energy front. It is here where the Marcellus Shale and the Utica Shale plays are serving as their own industry magnet. Now energy companies, many of which are headquartered in Texas, are opening offices in Pittsburgh to serve as the base operations for what promises to be a game changer to the local economy.

The biggest piece in the ever expanding puzzle has yet to be announced, but everyone knows that it is out there and everyone is waiting in anticipation. It is the prospect that Shell Oil Co. will build a $2.5 billion ethane cracker plant above the Marcellus Shale in Beaver County. Shell announced in March, after months of competition with Ohio and West Virginia, that Pennsylvania was its preferred site for the petrochemical facility.

The company has signed a land-option agreement for former Horsehead zinc smelter site. While the announcement was heralded as a coup, the project has not been finalized. I can tell you with some authority that Shell execs were back in Pittsburgh earlier this week for talks, however, a decision on whether this is a go or no go proposition has not been announced.

If Shell does go forward with the project, it will be a seminal moment in drilling development for the Marcellus Shale and the economy of southwestern Pennsylvania, as spinoff facilities will surely result. The total economic output for the proposed Shell cracker plant is expected to be $4.8 billion per year and could result in 8,000 new jobs, according to a recent analysis by the Pennsylvania Economy League of Greater Pittsburgh.

In short, this would be the single biggest industrial project to come down the pike in the Pittsburgh area’s long and storied industrial history. And that is saying something.

I Never Met a Town …

So I’ll admit it, I am pulling for Pittsburgh. While I must wear the impartial referee’s hat during the site selection process for reasons of credibility, I can nonetheless root for communities to grow and prosper.

Will Rogers said he never met a man he didn’t like. Well, I have never met a town that I didn’t want to see grow, prosper and achieve the dreams for the next generations to come.

I think Pittsburgh, once battered and bruised but always looking forward, is on the verge of achieving those dreams.

So for those of you in Baltimore, Cleveland, Cincinnati, and Houston, Nashville, and Charlotte, and any other city across this great land, please forgive me when I say: “GO STEELERS!”

Dean Barber is the principal of Barber Business Advisors, LLC., a site selection and economic development consulting firm based in Plano, Texas. He can be reached at 972-767-9518 or at dbarber@barberadvisors.com Please visit our website at www.barberadvisors.com

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