Notes on the state of things

Notes on the state of things

New York City reportedly faces a 20 percent loss of hotel rooms in the aftermath of the coronavirus pandemic.

The Big Apple “is expected to leave thousands of rooms there closed permanently as the city starts to reopen after months of lockdowns,” reports The Wall Street Journal.

And while we’ve not seen any estimates for the number of rooms Pittsburgh might lose, if any, you can bet if it does, the folks at VisitPittsburgh, the local government-backed tourist agency, will use it to buttress its non-starter argument that taxpayers should expend tens or hundreds of millions of dollars to build that oft-shilled-for connecting hotel at the David L. Lawrence Convention Center.

Never mind that, for years, the private marketplace has responded with the addition of more than sufficient hotel rooms to meet the demands of the convention center.

If there are available room losses in Pittsburgh post-pandemic, the private marketplace will respond – if demand returns for those rooms.

Speaking of the convention center, the Post-Gazette reports that the pandemic has, to date in 2020, cost the facility 216 business or sporting events. And the lost ancillary spending is calculated at nearly $107 million.

How long the malaise will last is anybody’s guess. But here are two timely suggestions for the those running the show at the David L.:

First, stop the practice of deeply discounting or even eliminating the rent paid by those booking the convention center. The public has no business underwriting anybody’s convention rent.

Second, refrain – at all costs – from lauding the “economic impact” and/or “intangible” public relations “benefits” of events like 2009’s G-20 Summit. Its “economic impact” was a train wreck. Its “intangible benefit”? How about seeing Downtown Pittsburgh as the ghost town the accompanying security lockdown made it.

There’s more potentially bad news for Pittsburgh’s abysmal Downtown premium office space occupancy rate.

As the Pittsburgh Business Times reports, UPMC, which was credited with “rejuvenating the central busines district office market” when it occupied a large chunk of the U.S. Steel tower a decade ago, is vacating a good chunk of that chunk and seeking to sublet it.

But that could be a tough sell given two things:

First, pre-coronavirus pandemic, there wasn’t exactly any stampede to lease top-notch downtown Pittsburgh office space.

Second, post-pandemic (whatever that really is), the glut of office space could be even higher if more companies continue to allow a high percentage of workers to do their jobs from home.

Long before the UPMC announcement, the office space glut appeared to be ignored by government officials who have consistently worked to subsidize even more premium office space with various taxpayer “incentives.”

What’s wrong with these people?

Republicans and Democrats on two state Senate committees have been venting their suddenly bipartisan spleens, eviscerating the Pennsylvania Turnpike Commission for a commonsense operational decision.

The coronavirus pandemic forced the Turnpike to temporarily suspend human collection of tolls. And it appeared to have been so operationally efficient that the commission moved up its previously announced decision to go to an all-cashless system and eliminate the jobs of hundreds of toll-takers by the end of 2021.

“Astounding,” “extremely concerning” and “unconscionable” were some of the words used by legislators in response to the early move.

But the pandemic, a Turnpike official says, cost the system about $100 million because of far less utilization; switching over now – permanently – was the prudent thing to do.

And it’s not as if these workers are being left high and dry. As the Post-Gazette reported it:

“The agency will continue to offer workers $5,000 a year in tuition reimbursement through next year, allow them to fill other state jobs they qualify for, increase the maximum severance from $14,000 to about $25,000 and provide lifetime health insurance for anyone who would have qualified if they had stayed through the end of 2021.”

And it’s also not as if the Turnpike hasn’t taken other steps to economize, such as a hiring freeze, slashing its capital budget by 25 percent and paring management ranks by offering early retirement.

Of course, nobody’s talking about the elephant in the room – a prior Legislature’s decision to raid the Turnpike Commission of hundreds of millions of dollars, forcing it into borrowed debt, in order to launder money to mass transit.

That has resulted in annual toll hikes that by nickel, dime, quarter and dollar slowly have made the Turnpike not worth the trouble for more and more motorists, including truckers.

The words “astounding,” “extremely concerning” and “unconscionable” come back to mind.

Colin McNickle is communications and marketing director at the Allegheny Institute for Public Policy (cmcnickle@alleghenyinstitute.org).