Boutique Hotel coming to heart of East Liberty (Pittsburgh: transplants, sale)

[CFP]

Originally Posted by BrianTH

But maybe this time will finally be different, and you naysayers will get one right.

Not being a naysayer, merely critiquing the sequence of development of the outside to inside strategy and pointing out with your help that new retail/commercial space constructed in isolation does not succeed.

The success of the residential component of ELPN is meaningless because so many established residents were displaced by the demolition of the two high rises that it was a given that a small fraction of them would want to return to the area. Commercial rents are typically more profitable for a developer than residential so by that measure that project remains a failure so far because of its isolation. The architecture of the project is first class.

In between cheerleading (optimism) and naysaying (pessimism) lies a third mode of discourse: critical thinking (skepticism). Try it sometime.

[BrianTH]

Originally Posted by CFP

Not being a naysayer

Note I was mocking your use of the term "cheerleader" for those who do not agree with your analysis. If you want to agree that such name-calling is not contributing much of value to this discussion, I will be happy to do so.

The success of the residential component of ELPN is meaningless because so many established residents were displaced by the demolition of the two high rises that it was a given that a small fraction of them would want to return to the area.

East Liberty Place North is a mix of lower-income and market-rate apartments. The fact that the market-rate places also immediately rented is in fact an important piece of information.

Of course since we are talking about a hotel project, all this is fairly tangential. But to the extent you thought you had caught me in some great inconsistency, I think I have already demonstrated that the full (not selectively edited) statement I made about East Liberty Place is in fact consistent with what I have said about Hotel Indigo's prospects.

Commercial rents are typically more profitable for a developer

I believe East Liberty Place North is about 75,000 sqft in total, of which only 11,000 sqft is ground-floor retail. There is no way the commercial portion was close to parity with the residential portion.

that project remains a failure so far because of its isolation.

Again, you really don't have a basis for claiming the overall project is a "failure".

What I would agree with is that SO FAR, its RELATIVE isolation may have contributed to its slow leasing of its retail space.

Of course the problem is that doesn't get you what you wanted--a great contradiction regarding Hotel Indigo--because with respect to Hotel Indigo's site it is already in a significantly better location, and we were explicitly discussing how current projects in the works are going to change that area anyway.

[BrianTH]

By the way, I might note that Market Square Place also immediately rented out its residential portion, but filling in its ground-floor retail took a lot longer and is just being completed now.

One possible interpretation of that is that Market Square Place has a horrible location, and it was a big failure from the beginning.

Another possible interpretation is that retail has been under a lot of stress recently, and therefore it is not particularly surprising when recent spec retail projects take a long while to lease.

[Joe Magarac]

I don't think it is reasonable for either CCP or BrianTH to use the success or failure of the first-floor commercial space in the East Liberty Place North development as support for the notion that the Indigo Hotel project will or won't succeed.

It's important to note that ELPN was not and was never intended to be a typical development. It was built to replace some of the subsidized housing that was lost when the three projects that towered over East Liberty were demolished. The first-floor retail component was just an add-on; it was included so that the building would be in keeping with the rest of the buildings in that part of town, all of which have first-floor retail. But ELPN was built as housing first and foremost, and it needed to be built quickly, without waiting for retail tenants to sign leases, so that the former residents of the projects would have a place to go. (If memory serves, the residents of the projects filed a lawsuit to block the demolition, which they dropped on the condition that new subsidized housing like ELPN would be built and that they would have priority in getting leases there).

This is in direct contrast with just about every other commercial development in that part of town or in any part of any town. Commercial developers usually don't break ground until they have commercial tenants lined up or close to it. That is why, when you see older news stories about East Side or Bakery Square, or current stories about Bakery Square 2.0, you will always see the developer talking in vague terms about tenants signing on to fill the space. Absent special conditions like those at ELPN, a private developer would be a fool to build commercial space without having leases in place first - and most private developers, while human and therefore fallible, are not fools.

In short, the first-floor retail at ELPN is an aberration in that the space was added on to a predominantly residential building in the hope that tenants would come. Usually retail space is only built when the builder knows in advance that tenants will come. So pointing to the fact that the first-floor retail at ELPN, a residential development, is vacant doesn't tell us much about whether the all-floors retail and hotel proposed at Hotel Indigo, a commercial development, will succeed.

[BrianTH]

I'm more than happy to agree East Liberty Place North is not necessarily a good source of evidence on the likely prospects of retail anywhere else in East Liberty (although I still think the successful renting of the market-rate units is important information about residential market dynamics).

I'd note the only reason I brought up East Liberty Place South originally is that assuming it is built as proposed, it will provide another nearby location for entrepreneurs to cater to a future market including a lot more residential units and hotel rooms.

[CFP]

I think one thing we're all in agreement about is that psychology and perception play a big part in real estate development and urban planning. That's why landlords like short term pop-up shops. It's better to have something going on in a space even on a month to month basis than to have a long term vacancy. I think we can all also agree that one of the biggest challenges that EL's revitalization faces is a negative perception of the safety and vibrancy of the neighborhood.

ELPN is a failure in that it has only contributed to the empty/vacant/lifeless perception of the neighborhood, even if the building is brand new and the upper floors are fully occupied.

My concern is that if out of towners have a similar perception of the Indigo and give it bad reviews, it will wind up contributing to the negative perception of the area instead of reversing it. Remember that the main entrance to the hotel is on Broad Street, and as I pointed out before 90% of the retail storefronts on that street are vacant. Not exactly a place for an evening stroll.

http://tinyurl.com/85mda43

Click on Broad Street in the direction of the Target and it will take you inside the Smoke Shop

Pittsburgh?s Broad Street district in East Liberty moves closer to a rebirth - Pittsburgh Business Times

[BrianTH]

Originally Posted by CFP

I think we can all also agree that one of the biggest challenges that EL's revitalization faces is a negative perception of the safety and vibrancy of the neighborhood.

In fact, I do disagree with that. In potential, of course, that could be a serious problem. But increasingly, it isn't an actual problem, despite the presence of a few posters here who keep insisting it should be a problem. In other words, I think that people who continue to think this is "one of the biggest challenges that EL's revitalization faces" are operating on outdated information.

I should note this is all in reference to the central commercial district. I recognize the outlying residential areas require more complex analysis.

ELPN is a failure in that it has only contributed to the empty/vacant/lifeless perception of the neighborhood, even if the building is brand new and the upper floors are fully occupied.

You keep trying to find new ways to call East Liberty Place North a failure. Even on this new measure, however, I think that is completely wrong. There is no way this nice-looking new building is making the neighborhood appear more "empty/vacant/lifeless" than the empty lot it replaced.

My concern is that if out of towners have a similar perception of the Indigo and give it bad reviews, it will wind up contributing to the negative perception of the area instead of reversing it. Remember that the main entrance to the hotel is on Broad Street, and as I pointed out before 90% of the retail storefronts on that street are vacant. Not exactly a place for an evening stroll.

I am not at all concerned about that. Generally, I think a lot of people in other cities would be highly amused at what people in Pittsburgh consider to be a frightening neighborhood.

And again, you are arguing as if walking three blocks to get to the East Side area is somehow going to be an inconceivable odyssey. I would have absolutely no qualms recommending visitors take such an evening stroll--and that is right now, let alone what it is likely to be like as all the other projects are being completed.

Indeed, all that stuff in the Biz Times article suggests it makes no sense to insist that the current condition of Broad Street will dictate the future prospects of Hotel Indigo.

[CFP]

Brian, just out of curiosity are you an African American Democrat?

[BrianTH]

Originally Posted by CFP

Brian, just out of curiosity are you an African American Democrat?

No.

[CFP]

Originally Posted by CFP
"I think we can all also agree that one of the biggest challenges that EL's revitalization faces is a negative perception of the safety and vibrancy of the neighborhood."

Originally Posted by BrianTH

In fact, I do disagree with that. In potential, of course, that could be a serious problem. But increasingly, it isn't an actual problem, despite the presence of a few posters here who keep insisting it should be a problem. In other words, I think that people who continue to think this is "one of the biggest challenges that EL's revitalization faces" are operating on outdated information.

Originally Posted by BrianTH

Generally, I think a lot of people in other cities would be highly amused at what people in Pittsburgh consider to be a frightening neighborhood.

In your first quote you state that negative perception of East Liberty "isn't an actual problem".

In your second quote you state "what people in Pittsburgh consider to be a frightening neighborhood".

Congratulations! You have undermined AND contradicted your own argument.