Pittsburgh Moves to Further Reduce the Role of Market Economics

Summary:  On October 11th, Pittsburgh’s Mayor announced his intention to revise dramatically the City’s process for approving publically subsidized development projects. In short, the new procedure would institute an extensive list of new guidelines projects must meet before the City will allow them to go forward. This Policy Brief explains the changes and the many problems the proposed changes will create and the obstacles they will face in implementation.

 

Essentially, the Mayor wants to severely reduce the importance of the economic benefits arising from a prospective project in favor of criteria focused on numerous social and environmental desiderata. The new scheme would follow a rubric known as the P4 program —people, planet, place, performance.   Under each of those categories there are a number of measures that would become the principal guidelines for approving new publically subsidized projects.

 

According to newspaper reports on October 12th, the Mayor was quoted as saying “We are not simply looking for projects to make money and jobs.” And further that he wants to be sure that projects are “environmentally sustainable and inclusive and accessible to a wide population.”

 

The new system will use twelve metrics to evaluate proposed development. Based on media accounts, these metrics will include expected effects on “air quality, use of renewable energy sources, benefits to low income individuals, and access to transportation.”

 

An October report prepared for the City’s P4 program listed the twelve measures to be used to evaluate proposed projects that use public financial support.  The twelve measures along with their desired intent are presented in the following list.

 

1) Community: Understand needs and align development;

 

2) Economy: Leverage investment to strengthen weak markets;

 

3) Opportunity: Drive prosperity through equitable development that produces wealth and ownership for disadvantaged populations;

 

4) Public: Activate and extend public realm to provide indoor and outdoor spaces for all to use;

 

5) Housing: Provide diverse affordable housing that creates affordable, and healthy housing options to prevent displacement and create diverse, stable, and healthy communities;

 

6) Land: reactivate abandoned properties and return to productive use;

 

7) Air: provide high quality air to create healthy ecological system;

 

8) Rainwater: manage to minimize impacts and reuse;

 

9) Connect:  Development that enhances and expands transportation options to improve public access to jobs and community resources;

 

10) Design: promote excellence in design that instills local identity, and lasting quality;

 

11) Innovation: Advance and foster new ideas to drive market leadership and stimulate creative solutions to urban challenges;

 

12) Energy: Reduce the built environment’s energy consumption and climate impacts by improving performance and providing renewable resources.

 

According to the P4 report, each measure is allocated ten points. But the point distribution within each measure is flexible in order to be adaptable or reassigned based on the priorities of the evaluating entities. In short, it will depend on the preferences of the evaluators. This would seem to promise no end of controversy and argument.

 

Then too, the report goes on to say that all twelve measures will have equal weight unless the evaluation team chooses to customize the weights for specific funding agencies. Then the report further complicates the whole process by stating that “none of the measures are intended to be individually required—they are all optional.” How can that be consistent with the Mayor’s plan to dramatically alter the project approval criteria?

 

To say the least, this set of project evaluation and approval criteria will face many obstacles and create costly complications for project planners and the approval process.  Given the difficulty of the comparatively easier estimations of the dollar costs and benefits of a proposed project inherent in the need to make many assumptions and take into account political influences, project evaluation will become exponentially more difficult when twelve guidelines must be taken into account. Some of these will not lend themselves to numerical measurement and will have to be done judgmentally—which leads to the next problem, whose judgement?

 

The report discusses the weighting and how it is to be applied.  But as noted that discussion leaves a lot of room for variation in application and will almost certainly make the process of actual evaluation a virtually ad hoc exercise. To wit:  inevitably, decisions will have to be made about how to weight the evaluation measures and how to score the individual measures.  And that has the potential to create very serious disagreements among the different constituencies represented by the twelve metrics.

 

In short, the evaluation and approval of a project using twelve metrics that cover issues related to the environment, diversity, access to transportation, health, recreation and all the other desiderata underlying  the twelve metrics will require far more time and resources than the City’s current project approval system. It will also impose much higher costs on the developer for design and construction, of say, a high rise apartment or condo building.

 

Then there is the problem the City will have if the new set of guidelines are not required by state development grant or loan programs that are primarily designed to promote job growth and economic development. There are already laws on the books regarding safety, environment, discrimination, etc. that must be factored into state supported projects.  The City’s imposition of a slew of new tougher and wide ranging criteria that will add substantially to costs and time delays could easily make the economic returns and new jobs benefits stemming from the expenditure of state dollars fall to unacceptable levels.  And if the project evaluators decide to conform to state criteria and in effect choose to drop the twelve measure plan, what will the P4 approval wish list exercise have accomplished?

 

State taxpayers who provide the funds for the grant and loan programs need to be assured that the projects supported are working to improve the state tax base and creating enough jobs to justify the use of state tax dollars. The state’s record of using tax dollars to subsidize job creation is already not very good. Over the years very few projects receiving state grants or low cost loans have produced the numbers of jobs the applications promised or the state agreed were necessary to justify the funding. Adding new, expensive layers to planning and approval that diminish job and income benefits might well force the state to deny the assistance requested.

 

Whether Federal funds will be at similar risk is less certain. It probably depends on the political leanings of decisions makers in DC.

 

If Pittsburgh can only provide public funds the City can generate, it will be quite limited in the amounts it can offer. TIF based financing using only the City share is not a major source of funds. TIF plans would need Pittsburgh schools and County participation to raise significant funding. Obtaining their support could be problematic unless the project promises to be a significant job and tax base creator. LERTA is an option but the City is limited in how many millions of dollars of those it can safely have on the books.  And the option of borrowing substantial amounts to fund projects not primarily designed to boost tax base will be difficult in light of the underfunded pension plans and other ongoing financial problems facing the City.

 

Briefly stated, Pittsburgh needs to reconsider this dramatic change or, at the very least, introduce it very slowly to see how it will work in the real world. It is highly likely that the effort to deemphasize the economic benefits of development in favor of promoting a long list of social, ecological and other goals will end up wasting a lot of taxpayer money. Given the long and sad history of failures of social engineering in Pittsburgh, one would think that the visionaries who now think they can mold the world in a certain way through imposing a laundry list of desirable outcomes on development, many of which conflict with each other, and that adds enormously to costs and time to get projects approved and completed would be a little less sure of themselves.

 

The last 25 years have seen population in the City fall, no net increase in employment and a school system that has gone from bad to worse. The City has financial problems; it spends too much, it taxes too much and it chases development schemes that do not produce the desired outcomes.  More reliance on market competition, a friendlier business climate and fewer efforts to control the businesses already in the City would be a much better approach for the future of Pittsburgh.

Lower Hill Development No Longer Using a TIF: So What Now?

Redeveloping the Lower Hill District, where once stood the Civic Arena, or in its later years the renamed Mellon Arena, has taken an interesting new twist.  Instead of relying on the creation of a tax increment financing (TIF) district, the City has decided instead to create a tax abatement district.  The latter is made possible via the local economic revitalization tax assistance act of 1977 (Act 76), commonly known as a LERTA.  Why the change?

 

As we wrote in a Policy Brief last fall (Volume 14, Number 48), with a TIF, a bond (or bonds) would have been issued against the future property tax payments from the completed development.  Any subsequent increase in tax payments resulting from the project, compared to payments from the development area prior to the project, would have been used to pay off those bonds.  The downside is that if the development fails to generate enough of an increment in property taxes to satisfy the debt issue, taxpayers would then be on the hook for those bonds, or bond insurance would pay, possibly resulting in a downgrade of the issuing body’s credit rating that could affect the cost of future projects.

 

This happened to the City when the Lazarus department store TIF project failed.  To refresh a distant memory, the Lazarus development project used $56 million in public funds yet had a market value of only $21 million upon completion (see Policy Brief, Volume 1, Number 2).  Not only did this not generate enough property tax to satisfy the bond repayment, the store performed poorly, Lazarus’s parent company declared bankruptcy and closed the store just a few years after opening.

 

Nonetheless, TIF areas have been a popular way for governments to finance “infrastructure components” of economic development projects. So why did the City change its mind about using TIF?

 

The Mayor’s vision for the Lower Hill Development presented a problem. Bear in mind that the scheme was not only to develop the 28 acres comprising the former Civic Arena and parking lots, but also to use TIF revenue in a program to pump money into the rest of the Hill District (Middle and Upper) for programs such as job training and capital improvements. Inconveniently for the City, incremental property taxes realized after the development is completed must be used to pay off the bonds issued for the project’s costs, or if there is a surplus beyond the amount required for debt service it must be returned to the taxing bodies. The language of the Tax Increment Financing Act of 1990 (revised 1992), Section 7 part (c) states; “(t)o the extent that any moneys remain in the fund after all forgoing costs have been paid or satisfied, the remaining moneys shall be distributed on an equal basis to all municipalities and school districts which participated in the tax increment district.”  Clearly, a TIF would not accomplish the Mayor’s goal—so it was abandoned and replaced by a LERTA.

 

LERTA provides for property tax abatements for individual parcels within the development area.  The guidelines are laid out in Act 76.  A tax exemption can be granted by the local taxing authority; however, the length of the abatement shall not exceed ten years, applies just to that parcel and is transferable.  It is done to encourage development in an economically depressed community.

 

The local taxing authority has some leeway in setting its own guidelines. The City of Pittsburgh has put together a table outlining the real estate abatement programs available, including those under the LERTA program for both commercial and residential developers effective as of September 2014[1].  For a commercial LERTA, the abatement period is five years and the annual abatement limit is $50,000. This represents a tax credit as opposed to an assessment reduction.  For a residential LERTA, the abatement period is ten years for a $150,000 per year tax credit.

 

The Pittsburgh Public School District has also indicated it will participate in the residential abatement in the Lower Hill project for ten years at $250,000 per year.  However, according to the table, the School District’s abatement decreases over time.  Unchanged for the first two years it then declines by ten percent every two years afterward so that in the final two years the abatement is 60 percent of the original amount.

 

The current table does not list the County as a possible participant.  However, in a previous version of the table (effective 12/2012) the County was listed as participating in the residential LERTA, agreeing to abate $100,000 on the same schedule as the School District.  Of course for the kind of project the Mayor has in mind, he will need both the School District and County to participate.

 

According to news reports, the 28 acre project has a planned value of $440 million when completed. As mentioned above, local taxing authorities have leeway in setting the LERTA parameters.  The Urban Redevelopment Authority (URA), the agency that will be overseeing the development, was asked to approve an amended LERTA for the Lower Hill Development at a special board meeting on January 26th—it passed unanimously.  Under the new parameters the maximum abatement ceiling is now $750,000 per year. However, it is unclear if this is for residential, commercial, or both.  The overall LERTA is to last 25 years, even though each individual parcel can use the abatement for only ten years so the project will effectively have to roll out in sections.  As of this date, none of the three taxing bodies have officially approved the amended LERTA plan.

 

However, there is a major wrinkle in this LERTA plan. Interestingly, while property owners will not be required to make real estate tax payments to the taxing authorities, they will have to make annual payments equal to the abatement into two funds:  a reinvestment fund for other projects around the Hill District, and a development fund to help out with infrastructure improvements or to subsidize development.  The URA is estimating that each fund will accumulate about $20 million.  The only exception is for US Steel which has placed $3 million into the reinvestment fund, as opposed to half of the annual abatement, while the other half of their abatement will be used to subsidize their own project.  Will that same deal apply to other developers/owners?  Will it even be offered?  Will the owners demand it?

 

Assuming the US Steel arrangement is unique, what is the benefit of the LERTA for other developers/property owners?  The purpose of the LERTA abatement is to encourage development in economically depressed areas by giving property tax breaks as an incentive.  If the property owners are required to pay into special designated funds instead of receiving the tax abatement, where is the incentive from the LERTA for developers?  In effect, the taxing bodies will be using a complicated scheme to divert what ordinarily would be tax revenues into funds that could easily become a slush fund ripe for abuse.

 

But even if that concern is not to be heeded, why not just have the taxing bodies agree to put some tax revenues in the designated funds and avoid the whole LERTA complication? Finally, if the project succeeds in creating many good jobs and large increases in tax revenue for the three taxing bodies, why not let it help the taxing bodies with much needed revenue for municipal operations and education?

 

If the project is as successful as the promoters say it will be, it will breed more private development that will not require public money. What a novel approach that would be for Pittsburgh.

[1] http://apps.pittsburghpa.gov/finance/Current_Abatement_ProgramTable_effective_8-1-14.pdf

Has the Mt. Lebanon TIF Saga Finally Ended?

For more than a decade developers have been attempting to develop a prime piece of real estate on the corner of Bower Hill Road and Washington Road in Mt. Lebanon.  The parcel, once owned by Mt. Lebanon’s Parking Authority, appears to have run out of proposals—more accurately, funding—and will sit vacant a while longer.

 

The Institute has followed the iterations of projects for quite some time (Policy Briefs, Volume 7, Number 10 and Volume 10, Number 17).  In 2002, the proposal was to build high-end condos at the site, when private funding was not forthcoming, that developer withdrew.  A new developer, Zamagias Properties, stepped in with a new plan in 2006—60 high end condos with 9,000 square feet of retail space.  The twist this time was the appearance of a tax-increment financing (TIF) package.  The municipality and school district accepted the TIF, but the County—who helped broker the TIF—did not.  Once again the private financing did not materialize and changes were made to the plan which increased the number of condos and retail footage to 72 and 14,000 respectively.  A new TIF of $6.1 million was approved, and again the County declined participation.

 

In the latest effort the TIF was used to back a $3.69 million loan from the Department of Community and Economic Development’s Commonwealth Financing Authority (CFA).  It was claimed at the time that the public money would unlock private financing.  Of course this was in 2007 just before the financial collapse and the start of the great recession.  Once again the private money, based on selling 25 percent of the units, did not appear and the project was scrapped by early 2010.

 

Zamagias’ most recent development proposal for the site, townhouses, was denied by the township’s zoning board when the developer sought exemptions from part of the zoning code.  According to a news report, the developer went into default in early 2013 on the CFA’s loans used to acquire the property.  The State and its taxpayers are left picking up $1.78 million in loan guarantees while in a supreme irony the developer gets to keep the land.

 

This was clearly a terrible and misguided misuse of the TIF development tool.  First, TIF’s are to be used for blighted areas.  By any measure this corner of Mt. Lebanon did not meet any reasonable definition of blight as laid out in the state law.  Second, TIF’s have a “but for” requirement.  That is to say the project would not be financially viable without the TIF funds.  Such a requirement was never put forth by the municipality.  Third, TIF’s were never intended to be used for residential and retail developments.  TIF’s were intended for high value added, high multiplier activities such as manufacturing that could create new jobs for the community and generate enough benefits to justify taxpayer investment.

 

Furthermore, if a TIF is granted, the project becomes subject to the state’s prevailing wage law.  This implies that the price of labor becomes the union rate which can increase the labor costs of the project by up to 30 percent.  The value of the TIF can easily be consumed by the higher wage costs.

 

This episode should stand as an example to other municipalities who wish to venture into the economic development business.  Presumably, none of the projects presented were economically viable by private sector standards, therefore the public sector should have been very wary about getting on board.  Surely, there are developers who can devise viable plans for the site with no need for public funding.

 

Since the developer defaulted on state backed loans, yet still owns the property, any tax generated by any new development on that site now goes to the state to pay off the debt at least until the original TIF designation on the property expires in 2027.  The municipality and school district will not reap any benefits unless the property is developed and throws off significant tax revenues. Had the municipality simply sold the parcel off to the highest bidder and used the zoning process to guide development, they would already be enjoying an expanded tax base instead of staring at a still vacant lot on their main thoroughfare.

Does Brewer Know What “Ales” the State?

A news article today spoke of the astronomical growth experienced by one Pennsylvania brewery and its plans in the not too distant future to build another brewery to keep up with demand.

Could the location be the Keystone state or somewhere else? Probably hard to say, but the brewery’s owner noted in the article that "Pennsylvania is a great location. But it’s not very business-friendly. You look for fair tax breaks, fair taxation. And the bottom line is more jobs. That’s what it’s all about."

So what is the company advocating for? Does it want Pennsylvania to reform its tax system so that businesses can grow and businesses from other places would be attracted to locate here without special tax treatment i.e. low business taxes for all and a sensible regulatory climate?

Or does it want the state to amp up its plethora of incentives, credits, tax free zones, and other targeted programs so that it will be incentivized to stay put? With every state playing the tax incentive game there are plenty of opportunities for the brewery to point out that it could locate somewhere else. Policymakers panic, carve out a package, offer it to the company, and hope for the best. The benefits are touted while the direct and indirect costs of picking winners and losers in the economic development game are downplayed. Then the business who thought the tax and business climate was unfriendly no longer thinks that way.

PAT Claims to Be an Investment Train Engine

Are businesses flocking to Pittsburgh because they are looking for a viable public transit system? That is the claim being made by the Port Authority (PAT) in an advertisement in the July 25th edition of the Pittsburgh City Paper. The ad goes on to say that every dollar of investment made by PAT in public transit returns as much as six dollars in economic returns. Their only specific example: they maintain that the East Busway spurred $800 million in development in the areas around the bus stations.

Let’s take a hard look at PAT’s assertions regarding the economic effects of its investments in transit.

First, if employers and developers are evaluating where to locate based on a viable public transit system, they must surely be skeptical about Pittsburgh transit’s viability. PAT is bankrupt in any meaningful financial sense of the word and can only sustain its egregiously expensive operations with ever increasing taxpayers’ subsidies. It currently faces a 35 percent reduction in service in September coming hard on the heels of substantial cuts in the past few years unless the State comes up with significant additional funding-which it appears reluctant to do.

Moreover, PAT operates in Allegheny County, Pennsylvania where the public transit unions are empowered by state law to strike and shut down service completely. That means every three years or so when contract time comes around the threat of a walkout is always on the table. This power to strike is a principal reason PAT’s finances are in such dreadful shape. Strikes could also occur if there is sufficient grievance over management’s implementation of an in-place contract to justify a walkout.

Further, a recently enacted state law strips PAT of its long standing monopoly status. Over time that will mean increased competition from private carriers as well as incursions into PAT’s once protected territory by regional transit agencies from neighboring counties. PAT’s financial situation and the union’s power derived from the right to shut down the system and throw transit riders and their employers under the proverbial bus cannot bode well for PAT’s future as a viable entity.

Second, does PAT’s contention that every dollar it has invested led to six dollars in economic returns have any validity? In terms of any new investment near the busways or the light rail corridor, the claim of "induced" new investment must be able to determine whether some or all of that spending would have occurred in others areas of the City or County if PAT had not made the transit investment. Bear in mind that the City’s population has been declining for 60 years and the County’s has dropped by hundreds of thousand since 1960. So, if busways or light rail has merely altered residential distribution patterns and shifted investment in housing and retail closer to those systems, that must not be confused with net new investment in the City or County over and above what would have happened anyway.

If PAT is including investment dollars in new stadiums or the convention center in their calculations that is a gross error. Indeed, any taxpayer funded projects should be stricken from the spin off effect calculations. PAT owes it to its ad readers to spell out its methodology for calculations of its economic impact.

Then too, the return on PAT’s spending assessment should also take into account the fact that PAT’s transit projects are heavily subsidized by County, State and Federal tax dollars. The recently completed North Shore Connector at a cost to taxpayers of over $500 million will have to generate $3 billion in returns to conform to PAT’s claim of six dollars in economic returns for each dollar of transit investment. Is there even a remote chance that will happen?

Half or more of the cost of operating and maintaining the buses and trains falls on taxpayers. Are those dollars included in the total project cost to get a more accurate evaluation of the "induced" gains from the project? And if so, over what time frame are the calculations being run? A safe bet is that PAT does not take the annual stream of tax of dollars needed to support the project into account.

Finally, does PAT (or the government agencies doling out its funding) ever look at the opportunity cost of a project? Every dollar spent on a transit project is money that could have been used for another purpose or left in taxpayer pockets. Was the PAT project the best use-better than eliminating traffic bottlenecks for example?

In sum, PAT’s ad in the City Paper should be taken with a grain of salt and as little more than self-promoting ink spilling.

Hits and Misses in Pew Report

Elected and appointed officials in the field of economic development are often long on the benefits of proposed spending to stimulate growth but very short on the follow up to find out if the programs actually work.

That’s not new news. Pennsylvania’s Legislative Budget and Finance Committee (LBFC) did a report in 2000 that served as a fairly comprehensive performance audit on DCED’s programs and found the monitoring of efforts ranged from "rigorous to none" and that the Department rarely "verif[ied] the accuracy of jobs data". More recently, the Auditor General looked at the Opportunity Grant program and found lax effort to check on job creation numbers.

So the new Pew Center on the States report on evaluating how well states do in monitoring their incentive programs is treading on familiar ground. It is a very ambitious undertaking, ranking all 50 states and DC. All states spend the money to attract and retain jobs, the report notes, but there is great variation in how well the states do in monitoring the effectiveness, the "bang for the buck" of the incentives. There should be more emphasis on measuring whether what is promised is what is delivered, and there should be consequences for not achieving targets.

By reviewing documents and interviewing officials, Pennsylvania comes out in the middle of the pack, along with 11 others, labeled as having "mixed results". Under the dual evaluation of "scope" and "quality" PA got high marks for having a schedule for reviewing programs and determining whether incentives are achieving stated goals. The problem is that the rating came from the review of two documents from LBFC, one on tax credits and one on Keystone Opportunity zones.

Besides the 14 tax credits reviewed in the LBFC report that Pew referenced a quick look at DCED’s program and funding finder shows that 53 links for "loans" and 61 links for "grants" come up, meaning that PA might be rigorous on a fraction of its incentive programs reviewed by Pew. The same could hold true for the other 49 states based on what the evaluators examined, meaning they could look rigorous or lax in relative standing. This does nothing to include the plethora of incentive programs states might have authorized for their local governments to carry out but are not monitored by the state itself.

Ratcheting Down RACP

We’ve written before about the Redevelopment Assistance Capital Program before, whether it is the projects it has funded, the requests made to it by local governments, and, in a July 2010 blog how in its relatively short history (it was created in 1986) the state had upped the credit limit through the years to where it stood at a borrowing cap of $4.0 billion in 2010. Much acceleration on the cap occurred in the mid to late part of the last decade. Overall it took 26 years to get to that borrowing level.

Now the state House has passed legislation that would make a lot of significant changes to the program but its main thrust is that it would gradually decrease the cap that would begin with an immediate reduction of $550 million and then $50 million each year from 2012 through 2019. The amount would increase to $150 million in 2020 until the cap gets to $1.5 billion, or roughly the level it was at in 2002.

A quick calculation shows that the level would be reached in 2029 assuming a strict adherence to the schedule. Roughly 17 years, the same time frame it took the RACP to grow from its initial 1986 appropriation to its 2002 level.

Murphy’s Law

Last night KDKA TV aired an interview with Pittsburgh’s former Mayor which could best be described as a puff piece on economic development.

Too bad the reporter did not bother to ask the former Mayor about the true economic impact of spending all those tax dollars. Or about Lazarus, Lord and Taylor’s, etc. and the millions wasted by the Pittsburgh Development funds (proceeds from legalized slots are going to pay those loans off).

The ten years it took to field a winning baseball team is proof of how stupid the argument was to begin with. If the North Shore is so great, why is the City still hemorrhagingpopulation? Why are the schools so rotten and the City’s finances in shambles?

No net job growth for a decade and a hollowing out of the population of the key income earning groups. And a half billion dollars wasted on the Connector with all the lost economic activity resulting from the disruptions in constructing it.

The former Mayor lied about the threat of the Pirates leaving in 1997-98 to get the stadium built and then ignored the wishes of the overwhelming majority of the voters. His legacy can be found in the fact the City is under the financial supervisionof two state appointed watchdogs. Sadly, they have not done a very good job, but they are still here and are likely to remain so for a long time. Pittsburgh does not have the money to pave its streets. How’s that for a legacy?

The former Mayor is the epitome of what is wrong with egomaniacs who have political power. Enough is never enough for these people.

Allegheny County Employment—20 Years of Falling Behind

Economic development in Allegheny County over the last few decades has been driven heavily by government subsidies and directives putting taxpayers-County, state and municipal-in the role of venture capitalists.  This approach has produced minimal benefits for the citizens of Allegheny County in terms of employment gains.  

 

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“Up in the Air Development”: Wasted Time and Money

Economic development in Mt. Lebanon is officially "up in the air" with the announcement that the community had received a $150,000 County grant to study the possibility of developing the air rights above Port Authority trolley tracks. While the absurdity seems to lie with developing "air rights", it is actually stems from the wasted development opportunity along Washington Road in what was once called Washington Park.

The project, originally released in 2003, was to build high-end condos with retail on prime Parking Authority owned land. And of course, since this was public land, public money in the form of tax increment financing (TIF) was put forth to help fund the project. Mt. Lebanon Commissioners and the school board approved the TIF convinced they could best direct economic development. The state Department of Community and Economic Development even guaranteed part of the TIF claiming the public money would unlock private development.

But after two different developers tried to get the project going, plans appear to have been squashed. The sales trailer that once occupied the lot is now gone. Nothing sits on this prime piece of real estate. Instead of auctioning off the land to the highest bidder and letting the private market dictate development, public officials wasted an opportunity.

Now new excitement is being spun over a proposal to develop the area over transit tracks. Once again we hear the promise that public money will unlock private investment. As Mt. Lebanon’s Commercial Districts Manager says "we see it as a ‘set the table’ approach–we use some public money to take the first steps and then go out and drum up interest." Obviously public officials refuse to learn lessons regarding economic development–the private sector knows best how to utilize resources. All they need to do is peer down the street to see how well the last publicly directed development succeeded.