Gregory Gerber and Thomas Sammons share the same corporate philosophy: Do the right things and do things right.
Sammons' career in systems management had spanned more than two decades when he decided to start 2nd Millenium Technologies Consulting in 1997. The following year, he teamed with Gerber, who had an extensive background in sales and marketing, and assembled a small team of Web designers and programmers.
The company set out to provide database-driven Web sites that were easy to navigate and likely to bring clients a healthy return on their investments. Initial clients who used 2MTC to design their sites included the Western Pennsylvania School for the Blind and CIS Office Installations, both in Pittsburgh. Today, 2MTC's portfolio includes more than 60 completed sites designed for a wide variety of businesses.
The company also had a more aggressive, perhaps riskier long-term mission: to develop licensed database information tools. It realized this goal with the creation of two Web sites, www.Pittsburgh-Employment.com and www.Pittsburgh-Dining.com, which has since become its own entity.
The online jobs site ultimately helped 2MTC secure contracts with the Pittsburgh Technology Council and the Pittsburgh Children's Museum.
The Web sites have created their share of challenges. Gerber says Pittsburgh-Employment, for instance, was initially geared toward recruitment firms. But the company realized it faced intense competition from national online job sites and last summer, company executives decided to add the option of posting resumes on the site as a free service.
The strategy so far is paying off. More than 180 companies are listing openings on the site, which Gerber says often has more than 5,000 visitors a week.
"Our plans are to start charging a nominal fee and to have sponsors," Gerber says of the company's revenue-generating strategy. "Great American Federal is one of the sponsors, but we're looking for others."
Another potential claim to fame for 2MTC is Pittsburgh-Dining, launched in January after a two-year development phase. The original information tool has grown to 400 pages with five databases. Pittsburgh-Dining now is a separate business, at which Sammons serves as president and Stuart Lenehan is the director. Today, 157 restaurants are showcased on the site, which attracted nearly 500,000 hits over the past four months alone.
"It's our intention to keep improving the site, and we have many modifications planned," says Lenehan, who doesn't hold back his confidence in the site's content. "Currently, we think it's the most content-rich and full-featured site of its kind in the country, and the plans we have for revamping it will move it into the next generation. There will be no one else doing what we intend to do, and we'll be taking it into new markets within six months."
Lenehan declined to comment further on what the planned improvements will be and what new markets will be targeted. He did say, though, that the changes will make it easier for consumers to complete online transactions and enable restaurants and sponsors to do more to promote their business.
Gerber says the dining tool is extremely detailed, with the inclusion of menus, a calendar of events, information about dress codes and the noise factor at listed establishments, location of nearby movie theaters, and postings of band performances at regional venues. Searches can find which restaurants serve a certain dish and which theater is closest to an eatery.
The site also includes job openings at participating restaurants. One manager, Lenehan says, received more than 100 inquiries for a position at his restaurant that he had posted on the site. A commercial real estate site is in the works, and is expected to have an initial database of 2,500 properties for sale or lease.
"We're talking about going to other markets under the name commercialrealestateusa.com," Gerber says. "Our angle is for the consumer to find retail space or for a broker to find out what other listings there are. Our real money-maker will be with the membership, which is $89 a month for up to 10 listings, so businesses won't even need their own Web sites. We want to reach anyone who has anything to do with real estate."
In addition to creating the three information tools, Gerber says 2MTC is equally proud of its Web design work for big-name clients such as the Pittsburgh Cultural Trust, Pittsburgh GlassBlock, Adecco, Superior Selling, Regional Golf Publishing and Softspikes, a national company headquartered in Maryland.
"2MTC is continually researching new technology and seeking talented, creative individuals to develop, enhance and promote its superior products," Gerber says. "2MTC is prepared to meet the challenges of the next level in the Internet business-to-business regional portal and e-commerce marketplace and is encouraging investment into its technology, growth and strong management team."
2MTC plans to work with businesses interested in designing database-driven Web sites. Gerber says, "We're hungry," but points out that the company typically will not complete any project unless the client makes an initial investment of at least $10,000. The average investment has ranged from $15,000 to $50,000, Gerber says.
He adds that clients usually save money in the long run with 2MTC because it gives them the ability to make changes to their site, such as adding events to a calendar, without learning technical Internet language.
2MTC has completed about 60 sites since 1997 and another 12 are in the works. Gerber serves as president of 2MTC and calls himself the front guy or ambassador, while Sammons, his partner, is president of Pittsburgh-Dining.com. Lenehan is director of the dining tool, while Cindy Gaich, customer relations and sales coordinator, can tell you all about Pittsburgh-Employment.com.
The United States has witnessed an explosion in the creation of Web development companies over the past five years with the expansion of e-commerce. Gerber maintains, however, that 2MTC is still at the top of the list in terms of client involvement and the creation of detailed, easy-to-use database-driven sites.
Consumer-friendly enhancements are planned for Pittsburgh-Dining.com, Pittsburgh-Employment.com and 2MTC's commercial real estate development site, which is still in the works.
Sales and marketing strategy
"Our Web site is where we get a lot of our business,"' says Gerber.
The company also relies on advertising in regional publications and word-of-mouth referrals from satisfied customers. There are three sales/marketing employees at 2MTC. And the company's Web site comes complete with a list of clients, many of whom have included testimonials about their experiences with 2MTC.
Gerber says the company prides itself on developing clean, content-rich, easy-to-navigate sites, which contain no bells and whistles unless such a design is requested. Clients are given log-in access and a password so they can watch and be involved in site development.
Neither Gerber nor Sammons is shy about their desire to raise additional capital from local private investors for a business they insist is worthy of being noticed by investors. Sammons is searching for up to $3 million in financing for Pittsburgh-Dining, while Gerber's goal is between $250,000 and $500,000. Gerber says the businesses were financed from the get-go primarily by his own investment and have been kept alive by the money clients have paid to have Web sites catered to their needs.
"We've had a fairly good cash flow," Gerber says. "We started with three people and now we have 14. We also have about 20 computers. I funded most of it, and we have a line of credit with Great American Federal and Pennsylvania Capital Bank that wants us to do a site for them.
"We're seeking funding because we want to upgrade. Our server is co-located with Fiber Network Solutions, which is now a strategic partner of ours for the high-speed connection. It cost us a lot to put that together, and it's costing us a lot to upgrade our software and hardware needs to produce high-end Web sites."
Gerber says he spends half of his business day chasing money owed to the company by clients. Securing investors, he says, would enable 2MTC to enhance its equipment, expand its marketing strategy, increase its staff and shorten project completion time.
Gerber estimates that a $250,000 infusion of cash would pay dividends in terms of doubling the $1 million which the company expects to make in sales this year, and he has talked with officials at Innovation Works and a variety of investment bankers.
Sammons says investments likewise would help Pittsburgh-Dining add new features and explore additional markets.
Sales to date
According to Gerber, 2MTC did about $500,000 in sales in 1999 and is on track to increase that to $1 million this year. Sammons says Pittsburgh-Dining.com is expected to gross $500,000 this year, with hopes of achieving $3 million by the end of 2001.
Gerber says the biggest problem 2MTC faces is educating people about the difference between a Web site that is database-driven and one which is static.
"People are uninformed," he says. "I've had people ask why our Web site might cost $15,000 when the guy down the street can develop one for $5,000. They don't understand that ours is database-driven, rich in content and provides more.
"Business owners look at the bottom line and take the lowest bid without having any idea of what they are paying for. We had three clients where we bid on jobs and lost the bids, only to have the companies come back later and ask us to do the job.'' How to reach: 2MTC at (412)422-4460. Tracy Carbasho is a free-lance writer based in the Pittsburgh area.
How to reach: 2MTC at (412)422-4460.
Tracy Carbasho is a free-lance writer based in the Pittsburgh area.
Thomas Petzinger Jr. used those words as the grand finale for his latest book, "The New Pioneers." Petzinger, a well-known Wall Street Journal columnist who recently left the publishing world to co-found a business incubator called LaunchCyte in Pittsburgh, was researching the benefits of incubation long before dot-com companies ever became popular.
Incubators have been around for decades, he says, helping young businesses get off the ground, typically by providing for them shared office space and services. And it's no coincidence that the influx of dot-com companies across the country the past few years has gone hand in hand with an increase in the number of incubators, particularly a number of new high-tech-oriented firms in Pittsburgh. But don't call them incubators.
"Some people are averse to the term incubator because the dot-com space has deflated," Petzinger says. "The valuation of dot-coms on Wall Street has been punctured, and since incubation was more closely identified with dot-coms, people are opposed to the term."
Call them what you want, but it doesn't change the latest incarnation of this age-old concept.
"Although they may not always go by that name, incubators are here to stay," Petzinger says. "Big organizations are losing their best talent to the new economy, and incubators will be out there to catch the talent that's fleeing. Individual entrepreneurs will come together to work on projects, and there will be a need for physical space, services and capital. Incubators will always be there to support them."
Petzinger, who serves as LaunchCyte's chief executive officer, doesn't mind if you refer to this start-up as an incubator, an accelerator, a network or even an early-stage fund. The most important thing to remember, he says, is what his company hopes to accomplish by providing seed money and business services to a highly targeted group of early-stage companies.
Breathing life into biotech
LaunchCyte, started in May by Petzinger and long-time high-tech consultant Babs Carryer, is not your typical incubator aimed at helping information technology companies. instead, the focus is on supporting companies that have both an IT component and a biological connection.
Its unique niche gave rise to the LaunchCyte slogan, "Where Life and Computing Converge."
"Health and medicine are becoming increasingly digital, and, at the same time, computer sciences are being informed by biologists," Petzinger says of his market niche. "So we're trying to support companies that have a biological component and an IT component. We think the future of biology, medicine and biotechnology will be digital, and we have a lot of medical industries and digital technology right here in Pittsburgh. We're trying to open the space to support both of them."
LaunchCyte's name and logo were carefully created to convey what the company is trying to accomplish and who it wants to help. The inclusion of "Cyte" in the name makes it clear the incubator has an interest cytology, the study of cells. The logo, designed by chief design officer Tim Carryer, husband of Babs Carryer, shows a strand of DNA connected to a computer cable.
Chucking their careers
Petzinger and Carryer were strangers a little more than a year ago, but a mutual friend felt confident they shared similar ideas which could be turned into a successful business. While Petzinger admits their ideas were not identical, they were close enough. They have spent the past year working on the business plan, developing their ideas and deciding what market space to target.
Concentrating on LaunchCyte meant, Petzinger says, "chucking our careers." He had spent 22 years as a reporter, editor and columnist for The Wall Street Journal and authored three best-selling business books. Carryer, LaunchCyte's president, had founded Carryer Consulting, which developed growth strategies for start-up companies such as Hells Kitchen Systems, SneakerLabs, jobsite.com and MediaSite. Her success as a business strategist was recently featured in Red Herring magazine.
Carryer says that having a sense of humor helped the company over some rough spots in the beginning.
"We're in the process now of learning how to place our priorities and knowing when to listen and what people to listen to in terms of advice," Carryer says. "Timing is crucial. Sometimes we've rushed the timing because we were trying to meet a deadline, and we actually missed the boat."
Petzinger says company players have made mistakes, but are always ready to learn and move on to something better.
"We've been too preoccupied with space issues and we've been too slow about some of our decision-making," he says. "We've seen opportunities slip away. We've agonized about decisions that we should have made quicker. As with everything in life, the good ones do get away sometimes."
Joining the co-founders in trying to make LaunchCyte a success is a group of professionals, including medical practitioners, field experts, experienced entrepreneurs and scientific authorities. Others are being sought to fill the positions of chief science officer, research associates and a deal person experienced in structuring venture capital deals.
An advisory board consisting of business leaders and distinguished scientists is in place to help LaunchCyte evaluate technologies and business opportunities.
Cash and equity
LaunchCyte's initial funding came from the co-founders' pockets and the generous contributions of family members. Petzinger says the company is in the process of raising $2 million strictly from high-net-worth individuals.
They plan to seek an additional $3.5 million in the fall from individual investors not necessarily from the area, and a third round of financing, totaling about $5.5 million, at a later date.
The substantial funding, Carryer says, is necessary early on because the company will not be accepting cash or its services. Instead, its business model calls for payment in what has become the chief currency in this New Economy: shares of company stock. Therein lies the core of New Economy incubators such as LaunchCyte. It's a model which will prove extremely risky on the front end, but the company hopes to hit pay dirt as at least some of its start-up clients score major successes.
"Cash is only cash," Petzinger says. "Were not in this to be consultants. We're in this to be investors. The upside of a high-risk investment is much more appealing to us than the certainty of a small amount of cash. The equity model seems to be the norm for incubators lately.
"The dot-com space popularized for-profit incubators that tend to work exclusively on the equity model. Now, the dot-com incubator model has deflated, but it's no reflection on incubators. It's a reflection on dot-coms. We don't think the demand for medical science is going to diminish any time soon."
Marketing efforts have been negligible up to this point, and the founders say they will not invest heavily in advertising in the future. Word-of-mouth marketing seems to be working well for LaunchCyte, which is generating interest while pursuing capital.
"Future marketing will be word of mouth in the technology community," Petzinger says. "We will try to accelerate word of mouth with Web site promotions, event sponsorships, conducting conferences and summits and possibly some advertising. If you give something to the community, that's the best form of marketing."
Of course, active fund-raising hasn't hurt its cause.
"We think we have the product, the contacts and the story to tell," he says. "Our fund-raising has been a source of marketing and brand building. We're generating some buzz in our attempts to generate funds, and that buzz is causing scientists to bring us their technology and employees to seek us out.
"You can build a dot-com incubator or company anywhere, but you can't build a highly sophisticated biotechnology company anywhere. In order to do that, you need medical science and computer science together, and Pittsburgh is globally ranked in both of these categories."
Carryer says that emphasizing what Pittsburgh has to offer is important when telling the LaunchCyte story to potential investors. The region, she says, is in a unique position to offer untapped resources to companies that are trying to form in the convergence space where medical science and computer science come together.
These companies encounter challenges that don't confront the typical IT start-up and must be addressed with a network of resources.
Maintaining a focus
LaunchCyte officials have talked to representatives from about 20 companies, including a handful from communities as far away as Seattle. Petzinger says, however, that his company's specialized niche will make it impossible to help every company that requests assistance. He says one of the biggest challenges will be sifting through the many opportunities and selecting which companies to help.
"We know that genomics and proteomics software tools are places we want to be in," he says. "For every company we incubate, there will be 100 that we haven't, and choosing one out of 100 will be a challenge."
The criteria, Petzinger says, include whether the technology is protected by patents, how neatly it dovetails with the trajectories of the marketplace, how neatly it dovetails with LaunchCyte's portfolio companies and whether it is beneficial to medicine and human health.
"We want to know if it has an impact because we want to make an impact," he says. "We will work with all early-stage companies, but that's a fairly wide category. We talk about companies including one guy and an idea as one category, five guys and a patent as another category, and then there are companies that we will form ourselves.
"For example, we may see a small company or individual researchers who has the pieces of a larger puzzle, and if we spot the opportunity to put those pieces together, we can create a company of our own design."
Petzinger and Carryer are talking to companies that are developing software tools to apply information about the human genome, companies that are developing tools to study how proteins work, robotics companies that are creating medical applications and medical technologies being used in high-tech imaging projects.
"We are more focused than most incubators in terms of the market segment, but even within that market segment, there are a half dozen subsegments, and we may choose to focus on only several of those," Carryer says. "We are strategizing about this on a daily basis."
The advisory board and other staff members will play a key role in helping to decide which projects are pursued. Petzinger and Carryer hope to bring about 68 companies into the incubator over the next seven years, working with each for an average of 18 months.
LaunchCyte will provide the selected companies or entrepreneurs with strategic counsel, networking opportunities, seed money and introductions to vendors and funding sources, which may include venture capitalists, individual investors or pharmaceutical companies.
"We will have to spend a lot of time and resources evaluating even the best opportunities using our experts and advisory board," Petzinger says. "Once they are in the incubator, we will provide seed capital in the hundreds of thousands of dollars. In typical cases, the seed money will amount to about $500,000 plus an additional $100,000 in services. We will also introduce them to premium service providers who will be offering discounted rates."
According to LaunchCyte's business model, the amount of seed money could range from $300,000 to $1 million. In exchange for the assistance, LaunchCyte will receive equity interests averaging 40 percent in its portfolio companies. The 40 percent figure is based on LaunchCyte's flexible "deal model" of owning smaller pieces of larger companies, larger pieces of smaller companies and as much as 100 percent of the companies that it will create from scratch.
Petzinger says he is willing to work with firms from outside the region, as well, because having access to their technologies and networks could enhance the companies being supported on a local level.
Not your ordinary incubator
Petzinger is quick to point out that while LaunchCyte clearly is a business incubator, it takes its mission much further than other incubators in the region. For Petzinger and Carryer, it's all about networks.
"One distinguishing trait is our emphasis on the network aspect," Petzinger says. "Good friends can come together and create more of a sum of their parts. The greater the scope of the network, the greater the value of each part of the network. We're not just building an incubator, we're building a network that includes staff, portfolio companies, directors, advisers and strategic partners both in Pittsburgh and all around the United States.
"We think that network will generate so much knowledge, value and creativity that the whole will exceed the sum of the parts."
Another distinguishing characteristic, he says, is the company's reciprocal ownership arrangements with portfolio companies and others.
"We will award a very small piece of equity in LaunchCyte to companies from whom we're also receiving equity, so every member of the incubator will have a stake in everyone else's success," Petzinger explains. "We're not talking about a huge stake of equity, though, because it will never be more than a few percentage points of LaunchCyte's total equity.
"We have a lot of great technology in Pittsburgh, but we need to open the space for the technology to come together and add value to each other's work. I remember thinking what a privilege it would be to be a person who was in that space." How to reach: LaunchCyte, (412) 201-7238
Tracy Carbasho is a Wellsburg, W.Va.-based freelance writer.
An incubator network
LaunchCyte CEO Tom Petzinger says he is familiar with the other incubators in the Pittsburgh area, and he supports the work they are doing.
His company has referred business to other incubators which were more suited for a particular project, and officials from other incubators have sent clients his way.
Zlingshot, operated by Casey Smith, is among them. Smith is just as new to the incubator market as Petzinger and Carryer are. He began his company in May to help early-stage technology firms and already has several potential clients in the pipeline.
"We're part incubator, part investment company and part operating company," Smith says. "We will provide seed capital, assistance with strategic planning and the marketing plan, IT and Web development, recruiting, finding office space and seeking venture capital. We have more of a hands-on approach where we expect to be working with entrepreneurs 50 to 60 hours per week."
Smith says Zlingshot can provide companies with seed funds of up to $200,000. In return for the start-up money and services, Zlingshot will charge a fee which consists of a cash payment, deferred until the company gets its first round of funding, and part equity, which usually amounts to between 5 and 10 percent ownership in the start-up.
"We've been funded internally to date, but we're talking to outside investors, and we have raised some investment money already," Smith says. "Our goal is to work with 10 to 12 start-ups per year, and we will have a chunk in all of the companies we help."
Since May, Smith says he has received business plans from more than 200 companies, with about 60 percent of the inquiries being from local entrepreneurs. Other requests for assistance have come from as far away as Europe.
"We're looking at companies that are way too early-stage for venture capital," he says. "We're bridging the gap from the idea stage to the time when the company can go for venture capital. Venture capital firms are more willing to fund companies that have been screened by incubators."
Smith estimates there are 12 to 14 companies in the Pittsburgh area that serve as incubators or venture capital firms that fund early-stage companies. He predicts that some of the incubators will make poor choices of which ideas to fund and will go out of business.
Iventurelab, formed in 1998 by Tommy Wang, his brother, Henry, and friend Anthony Ma, so far isn't among such firms. To date, the incubator apparently is doing well, with nine start-ups in its portfolio. It helps Internet and software companies move from square one and get to the point where they can raise their first rounds of venture capital.
The Wangs' company offers software development, graphic design, human resources, legal and accounting services, office space, fund-raising assistance and recruiting help. Tommy Wang says its core competencies are strategy, technology and design.
Iventurelab takes part of its fee in cash and the other part in stock, which ranges from 15 to 35 percent ownership in portfolio companies. The fee ranges from a few hundred thousand dollars to millions, depending on the project.
"There are so many incubators that provide office space," Tommy Wang says. "We're more like a think tank with a 50-man development staff that includes some of the top people from the Carnegie Mellon University engineering school. We hope to do 12 to 15 projects per year."
Wang has his own prediction on the future of incubators. He says some of the more powerful ones in areas such as Boston are doing so well that others are trying to imitate them. He expects a Chicago-based incubator to go public in the near future -- an action that likely would determine what happens with many others.
Jeryl Rauluk, vice president of Discovery Entrepreneur Resources Inc., says her company is similar in some ways to an incubator. The firm, with offices in Oakdale and Murrysville, was incorporated in 1999 to provide consulting, staff augmentation and strategic planning.
She says her firm has helped about 20 technology companies, including one in South Carolina. Rauluk says companies can spend time perfecting their product while her firm concentrates on the business plan and obtaining necessary funding. For companies that have already perfected a product, DER can put together an appropriate marketing strategy.
"With start-ups, we take a combination of cash and equity," Rauluk says. "We like to work with established companies because they pay cash which, in turn, gives us more equity to work with start-ups. The companies we've worked with so far have been software firms and dot-coms. We concentrate on product management, project management and marketing, so I don't think we're considered an incubator, but we're a good complement.
"For example, incubators can offer four walls and technical support, but sometimes they don't have the expertise in strategic marketing and sales support. We try to maintain relationships with venture capital companies, and when we see something that matches a company's portfolio, we'll pass the information along to them."
How to reach: Zlingshot, (412) 512-0090 or www.zlingshot.com; Iventurelab.com, (412) 621-4050 or www.iventurelab.com; Discovery Entrepreneur Resources Inc, (412) 334-1760 or www.discoveryentrepreneur.com
There's no end in sight for the development taking place in Pittsburgh's Airport Corridor.
Despite the seemingly endless list of ongoing commercial construction projects, local officials say there's plenty of room for even more growth. In fact, Pittsburgh Airport Area Chamber of Commerce Executive Director Sally Haas says the area is far from saturated with retail businesses and office buildings.
"We still have about 10,000 acres that belong to the county, so there's plenty of room for more development," she says. "The airport area is like the new frontier because there's so much potential. All of the existing and proposed developments are so accessible to the airport. The more businesses we bring in will mean more people who want to utilize the airport, which is ranked No. 1 in the country and third in the world."
Moon, Robinson, North Fayette and Findlay townships are brimming with development activity to complement the existing stream of restaurants, hotels, retail stores, industries and office complexes that line the landscape from the Parkway West near Green Tree all the way toward Beaver County along Route 60.
Robinson Town Centre and The Pointe at North Fayette were logical areas for continued development after the $1 billion Pittsburgh International Airport opened in October 1992. These areas have grown at an overwhelming pace and will continue to do so in the coming years.
The Mall at Robinson
Case in point is the $250 million mall planned for Robinson. If everything goes as planned by Cleveland-based Forest City Enterprises Inc., stores could be open at the mall in time for the 2001 Christmas season.
Officials at Forest City, which is also an owner of the Station Square retail center, began formulating plans for the mall more than 10 years ago at a time when Robinson Town Centre and The Pointe were not as congested as they are today.
The Mall at Robinson will be a two-story, enclosed facility with Kaufmann's, which opened in 1998, serving as the anchor on the west side. Architectural drawings completed by a Michigan firm show Sears, JC Penney and two unidentified stores anchoring the east side. Developers have talked to officials at the Seattle-based Nordstrom retail center, but plans have not been finalized.
Construction of the mall has been delayed as a result of negotiating financial matters, working out lease arrangements with retailers and receiving necessary approval from the municipalities. The architectural drawings show plans that include a long list of retailers, including Limited Too, Wicks and Sticks, Kirklands, Pacific Sunwear, King's Jewelers, Shaw's, Rampage, Banana Republic, Gap, Gap Kids and Gap Baby.
Chamber officials and developers say a mall makes sense in light of the economic explosion taking place around the airport and Route 60. They point to the newest stores in the Town Centre, such as Kaufmann's, Kohl's, Giant Eagle and Payless Shoes, as just a taste of what's to come.
An airport hotel
Expansion is running rampant throughout the entire Airport Corridor, not just in areas which have been popular shopping spots for years. The Hyatt Regency Pittsburgh International Airport, representing a $45 million investment in the region, became the most recent project completed when it opened its doors in late June. The 336-room Hyatt, built by Pittsburgh-based Dick Corp., is the first full-service hotel to open in the Corridor since the Marriott on Aten Road in Findlay Township 10 years ago.
The hotel includes a 150-seat restaurant called the Olive Press, a 9,000-square-foot ballroom and Internet connections for the guest rooms. It exemplifies the type of high-tech mindset which is driving much of the development, as well as the kind of economic prosperity that is padding the coffers of local communities.
Under the terms of a negotiated agreement with the Dauphin County General Authority, which owns the hotel, Allegheny County could rake in about $170,000 per quarter if the facility operates at 70 percent capacity and charges about $200 per room.
While the hotel is one of the most recently completed projects, it's far from the most expensive development. The Brant Pittsburgh Auto Racing Complex is expected to bring world-class motor sports and entertainment to its proposed site adjacent to the airport in Findlay Township.
Cost is estimated at between $300 million and $400 million for the 250-acre venue.
"This will be a one-of-a-kind facility because there's no other indoor complex like this anywhere that I'm aware of,"' says Gary Klingman, Findlay Township manager. "It will definitely create a positive economic impact and put the area on the map by drawing new revenue from tourists."
The Brant complex plans to host as many as 200 events a year, including racing, concerts, expositions, truck pulls, home and garden shows, family entertainment and wrestling. The facility is slated for completion in the spring of 2002.
Klingman says the facility will feature a one-mile indoor super speedway to facilitate year-round racing. Since many sports car drivers jet to race locations, the Brant complex will make it convenient for drivers to taxi directly from the airport runway to the facility.
Office building boom
Long before the raceway project was on the drawing board, major developers had claimed their stake to property close to the airport. The Cherrington Office Park represents one of the first developments in the Corridor, according to Haas, who points out that office buildings were abundant long before the airport opened.
The RIDC (Regional Industrial Development Corp.) business park in North Fayette Township has been attracting companies for years and continues to expand today.
Massaro Properties is one of many developers taking advantage of the business boom by expanding the work it has already done with projects in the Corridor. David Massaro, manager of real estate services, says his company owns 600,000 square feet of office space in the Corridor, including Robinson Plaza, Campbell's Run Business Center and the Park West Office Plaza.
He is awaiting final approval from the Federal Aviation Administration before his company proceeds with construction of the Ewing Technology Center on Business Route 60. The center will be one of the first projects to locate on 12,000 acres owned by the county near the Ewing Road Interchange. An environmental assessment of the property is expected to be completed in October, allowing the Massaro project and at least four others to get under way.
"Our project will consist of four buildings, each with 112,000 square feet," Massaro says. "We hope to complete all 450,000 square feet within 10 years. The first building should be done within 18 months after the work starts. At some point, we hope to have a restaurant and fitness center in the new complex, which will feature a lot of green space and walking trails."
Massaro says the closeness to the airport makes this area a strong draw for all types of businesses. He notes, however, that the abundance of development also makes the market very competitive.
"There's so much competition here that didn't exist years ago," he says.
To offset the high level of competition and promote the new buildings as primary spots for business, Massaro's company has hired Grubb and Ellis to market the complex, which was designed by Pittsburgh-based architectural firm Tasso Katselas Associates. The facility will be marketed as one which offers high-tech infrastructure to accommodate any type of company.
"We've already gotten some interest from companies," Massaro says. "We've had projects in this area since 1976. It's an area that people believe in strongly as evidenced by the fact that there are so many retail centers here. This corridor is attracting local and national tenants who need to get in and out of the area quickly.
"Some existing tenants that we have came to this area specifically because of the close proximity to the airport, and some are national tenants. I don't see development slowing down any time soon. It's going to continue up the Southern Expressway in the future."
The chamber's Haas says the airport was a definite attraction for NOVA Chemicals, a Canadian-based petrochemicals company that has opened a plant in Moon Township. The company is in the process of building a new facility near the existing plant in the West Point area.
"One of the biggest amenities for businesses here is that they are coming to an area that's undergoing such remarkable development that they can pick and choose what type of facility they want to go into," she says. "The office parks have outstanding visibility and accessibility."
Haas says FedEx Ground liked its Corridor location so much it is expanding its local operations. The Moon Township Planning Commission in June approved a $21 million expansion plan that will allow FedEx Ground to build a 156,000-square-foot addition at its Montour Run Expressway site, a move that is expected to create hundreds of jobs.
The Soffer Organization, which has been chosen by Pittsburgh leaders to serve as the master developer on the South Side Works project on Carson Street, also has invested heavily in the Penn Center East and Penn Center West projects. Additional office buildings are now available to tenants and more facilities are planned there in the future.
The Parkway West area has been a haven for development by TrammellCrow Co. as well. The Millennium Center One @ Scott Station promises tenants all of the features they will need to operate their businesses in the new millennium.
DiCicco Contracting is constructing a 100,000-square-foot office structure on 17 acres along Park West Drive in the RIDC Park.
Old airport, new ideas
Dirt is moving at the site of the former Greater Pittsburgh Airport in Moon Township. The area is viewed as an ideal location for companies, as well as for the U.S. Army. A $24 million reserve center is under construction at the intersection of Business Route 60 and Beers School Road. A vehicle maintenance shop and storage building are in the planning stages for the 26-acre site.
The reserve center is proof that the old airport still appeals to business leaders who need a lot of property in a good location. The airport opened in 1952 as an enormous economic force in the region. It generated thousands of jobs which, in turn, bolstered commerce, the housing market, small business and quality of life for nearby communities and the airport corridor was born.
By the 1980s, it was obvious the airport had surpassed its capacity and become obsolete. It closed in October 1992, and demolition of the 47-year-old terminal began in 1997. However, business-savvy developers realized the potential of the property, which is now stealing business away from other industrial park settings.
TechRX, which creates software and Internet-based technology for the pharmacy industry, announced plans earlier this year to relocate from the RIDC to the Airside Business Park. TechRX will lease about 24,000 square feet in one of the three buildings planned for the $35 million, 24-acre business park. The Elmhurst Group and the ERECT Fund partnered to create the park.
Landscaping at the old terminal makes it difficult to imagine that the property was once home to the nation's ninth busiest airport and one of the country's nicest terminal buildings. However, a few reminders remain, including street signs at the business park with names names such as Horizon Drive, Airside Drive and Lingbergh Drive.
Marketing the Corridor
Haas says the chamber is doing its part to market all areas of growth in the Corridor, whether it's near the new airport or the old landmark.
"We get calls from all over the country from businesses that want to locate here," she says. "We welcome them into our area and let them know there's more room for future expansion and we're not far from the City of Pittsburgh. The corridor truly is the final frontier of Allegheny County.
"Stretching west from the Pittsburgh city limits, our 24 townships and boroughs offer an enchanting array of lifestyles and a wealth of promising business opportunities for those who live and work here." How to reach: Pittsburgh Airport Area Chamber of Commerce, (412) 264-6270
Tracy Carbasho is a free-lance writer from Wellsburg, W.Va.