Monday, September 11, 2006
Cannibalism in the 28 Corridor
Don’t you hate being right all the time? This one was like a softball down the middle of the plate. We predicted that the Pittsburgh Mills retail development would have an impact on nearby existing retailers, many of whom were never granted favorable tax treatment like Pittsburgh Mills. It got a tax increment finance deal and other public dollars totaling $58 million to get the project built. We noticed that there was not sufficient population or income growth to sustain the large addition of retail.
Well, chalk up two more businesses that have succumbed to the Mills. Two restaurants in the Waterworks development closed their doors, the owner noting that business dropped by nearly 30 percent since the opening of the new upscale development. Closures such as these present a real nightmare to taxing bodies as they represent a net tax loss since the established businesses were not subsidized and paying real estate taxes in full.
Pittsburgh Mills has also had an impact on another nearby subsidized development, Deer Creek Crossing, which lost tenants to the Mills and is still waiting to get off of the ground.
But that’s not to say that Pittsburgh Mills is booming. It still deals with the same constraints facing the region in the way of sluggish population growth and the substitution effect of disposable income. A planned go-cart track never materialized, and its upscale bowling alley attraction has closed.
Businesses come and go on a daily basis. New developments supplant older ones, and the faddish state of retail and restaurants is constantly in flux. There is no denying that fact. But the give and take of the development game is a lot harder to swallow when tax dollars are being used as play money.
Well, chalk up two more businesses that have succumbed to the Mills. Two restaurants in the Waterworks development closed their doors, the owner noting that business dropped by nearly 30 percent since the opening of the new upscale development. Closures such as these present a real nightmare to taxing bodies as they represent a net tax loss since the established businesses were not subsidized and paying real estate taxes in full.
Pittsburgh Mills has also had an impact on another nearby subsidized development, Deer Creek Crossing, which lost tenants to the Mills and is still waiting to get off of the ground.
But that’s not to say that Pittsburgh Mills is booming. It still deals with the same constraints facing the region in the way of sluggish population growth and the substitution effect of disposable income. A planned go-cart track never materialized, and its upscale bowling alley attraction has closed.
Businesses come and go on a daily basis. New developments supplant older ones, and the faddish state of retail and restaurants is constantly in flux. There is no denying that fact. But the give and take of the development game is a lot harder to swallow when tax dollars are being used as play money.
