Allegheny Institute Blog

Despite a streak of resiliency that withstood a major legal challenge, the loss of one lead developer after another, and criticism from the public, it took the decision of an anchor tenant to pull out of the proposed Deer Creek Crossing retail development to kill the project.

We noted as far back as 1999 when the Deer Creek proposal was first hatched that subsiding retail by awarding tax increment finance packages to areas that were not in any real sense blighted was not a sound development policy. But retail developments in Allegheny County continued on with TIF packages providing funding, and have now spread to Washington County with the development of Victory Center.

Deer Creek Crossing was seized upon because of a wetland issue. Soon after, the development of the nearby Pittsburgh Mills (also built with the help of a TIF) threw a wrench into Deer Creek’s plans. A 2004 study for Allegheny County noted that “[existing malls] provide competition and will affect Deer Creek Crossing’s ability to draw shoppers”. With $191 million in sales projected to be diverted from existing retailers, the study finally put into numbers what we know is already occurring given the region’s slow population growth. Showering selected retail projects with favorable tax treatment makes the situation that much worse.

Some development, much smaller and without a TIF, will be built at the site. Will the death of Deer Creek Crossing provide a lesson for the appropriate use of this development tool? Don’t count on it. Governments are hard to embarrass.