CMU gives developer offer he can't refuse (Pittsburgh, Washington: real estate, hotel)

[BrianTH]

This is the end of the first phase of a fascinating story involving a key property along Forbes Avenue between CMU and Pitt (the now closed gas station right next to Junction Hollow):

Developer scraps Oakland hotel plan, sells property to CMU - Pittsburgh Business Times:

To summarize, a developer bought the property planning to put in a much-needed hotel, with the support of local businesses seeking to improve foot traffic in the area and remove an eye-sore. But CMU was meanwhile buying a lot of other local properties (on both sides of Forbes and extending down into Junction Hollow), and it apparently had its own master plans for the parcel. So it fought the developer tooth-and-nail on getting approval for the hotel plan, and at the same time offered to buy the parcel at a very handsome profit for the developer. And so now the developer has capitulated, taking the deal from CMU.

It is kinda scary to see CMU throwing its weight around like this (although nothing it did is illegal and the developer did get paid off). On the other hand, a well-thought and well-funded development of that area could be a nice asset for the whole area since it really serves as one of the prime gateways into the heart of Oakland.

[fleetiebelle]

CMU is landlocked, and the buildings there right now are eyesores, so I get what they're doing. But the general consensus around work today is, "so, we don't get a cost of living increase for the next 3 years, and yet the University is paying millions for real estate. Awesome."

[Fiddlehead]

I am amazed at the corporate culture emerging in today's universities. An aggressive growth model that includes land acquisitions, an expansion of non-tenured faculty, and rapacious executives. So, they (CMU) may have a worthwhile plan, but they might have an idea of putting some golden goose there, or it could be some self-serving effort, who knows. I would say it is debatable about whether a hotel or a new research institute would add more to the local economy,etc. Pitts seems to have been a good investment over time.

As for rapacious executives, out in Washington state I was reading about a new incoming University President at Central Washington University who negotiated a $290k salary, while tenure track professors start at about $50k and full professors earn about $75k. He called it simple "market forces." I was pretty shocked by that. But then I am pretty naive.

[Fiddlehead]

Originally Posted by BrianTH

It is kinda scary to see CMU throwing its weight around like this (although nothing it did is illegal and the developer did get paid off).

I wonder if CMU has Tommy "no knees" Buzzano as their chief negotiating officer? Nothing illegal happened, but perhaps some keywords like "baseball bats, cement life jackets, Ohio River" affected the negotiations....

[greg42]

Hey, look, another city parcel that now won't be taxed.

Seems like the hotel would have made sense. I don't know too many other places that one could be built near there. CMU, on the other hand, is thinking that there aren't any other places it could possibly expand that are contiguous with its current campus. I guess the developer wins either way.

[ctoocheck]

Hey, there's a few ugly properties still on the other side of Forbes. Maybe we can stick a hotel there instead if CMU doesn't buy that too

[BrianTH]

Originally Posted by Fiddlehead

I am amazed at the corporate culture emerging in today's universities.

So when I was a grad student at Pitt, I served on a committee that met with a business consultant brought in by the university. She was all about profit centers, maximizing revenues, and so forth--straightforward corporate stuff.

Incidentally, I found out that at least at the time, research was not in fact a net profit area for the university, because the labs consumed as much as they brought in. The most profitable departments were actually the major humanities departments, because besides the already meager salaries their additional costs were very low, and by using low-paid grad student teachers they were making a ton of money for the university from undergraduate tuitions. In fact they even beat out the Law School on profit margins, largely because the law professors got paid more and they didn't have grad student teachers.

[BrianTH]

Originally Posted by ctoocheck

Hey, there's a few ugly properties still on the other side of Forbes. Maybe we can stick a hotel there instead if CMU doesn't buy that too

Depending on what you are talking about, CMU may well already own it. From this summer:

June 30: Carnegie Mellon To Purchase Forbes Avenue Properties; Officials Cite Opportunities for Economic Development - Carnegie Mellon University

PITTSBURGH—Carnegie Mellon University has reached an agreement to purchase approximately three acres of land from Carnegie Institute and an additional 17,150 square feet from The PNC Financial Services Group, Inc. to further develop Forbes Avenue into an educational, research, business and cultural corridor.

The agreement with Carnegie Institute includes properties on both sides of Forbes Avenue, including a large lot that dips into Junction Hollow on the south side of Forbes, the 40,000-square-foot Graphic Arts Technical Foundation building at 4615 Forbes and an adjoining parking lot on the north side of the street. Carnegie Mellon also will purchase the National City property at 4612 Forbes, currently owned and operated by PNC. The transactions are valued at approximately $25 million.

[Impala26]

Perhaps the Forbes stretch up to Craig might be the most "profitable", but in my humble opinion it's not necessarily the only location to consider expanding the campus. I've always been in favor of redeveloping the Morewood surface parking lot to a garage, lending some space for new development. The stretch of Forbes from Beeler to Margaret Morrison and just beyond is mostly older homes and duplexes rented by students. Though I'm not sure in what way a corporate entity can purchase/redevelop private residential properties, even into new residences/dormitories let alone other form of academic facilities. It probably raises all sorts of zoning/use issues. Still it makes more sense geographically if anything else.