THE LONG ROAD AHEAD
Ravages of COVID-19 challenge Downtown Pittsburgh’s rebound
At the Faber, Coe & Gregg gift shop in Fifth Avenue Place, the cover of the Men’s Journal magazine on display earlier this month trumpeted an article about spring gear — from 2020.
That same day, the windows of the 937 Gallery on Liberty Avenue heralded Ross Mantle’s Misplaced Fortunes — an exhibit that ended more than a year ago.
And on Sixth Street, the Byham
Theater was still advertising “The Sound of Music” and a series of Children’s Theater events dating to the 2019 and 2020 seasons.
It all seemed like something right out of “The Twilight Zone” or a post-apocalyptic horror flick, with the dates aligning with the Big One — in this case, the arrival of the COVID-19 pandemic. What has been left in its wake is something like the living dead — near empty office buildings, shuttered retail spaces with year-old posters
in the windows and groups of survivors trying to fend off extinction.
But don’t count Downtown out just yet. Factors like the wave of vaccinations coming and the plans to get schools reopened could bring half of the Downtown workforce back by late summer, according to one estimate. And the head of the Pittsburgh Downtown Partnership noted talks have begun to use funds from the most recent federal recovery package to recruit new businesses.
In the meantime, there’s no missing the signs that the deadly virus has left its mark on the city center. Take Liberty Avenue, where an entire block between Fifth and Sixth has been wiped out except for the Sinful Sweets chocolate shop. Gone are a BRGR restaurant, Pittsburgh Popcorn, a CVS and Ullrich Shoe Repair, which moved to the suburbs last year.
“Right now, it’s about survival. That’s all it is,” said Jack Cohen, owner of S.W. Randall Toyes & Giftes on Smithfield Street.
A ghost town
For merchants like Mr. Cohen, it’s been a yearlong slog through shutdowns, pandemic-related restrictions and desolate sidewalks and streets.
Joseph Orlando, owner of the Joseph Orlando men’s clothing store at Wood Street and Fourth Avenue, remembers the days when Downtown used to empty out after 5 p.m.
“Now, it’s a ghost town at 9 a.m.,” he said.
The problem, as Mr. Orlando and others see it, is no one, despite what Petula Clark sang, is going Downtown these days — not the office workers, not the theatergoers, not the shoppers, not the sports fans.
Only 9% to 13% of the 110,000 to 113,000 office workers who flowed into the Golden Triangle each day to work before the pandemic are doing so now, according to the Pittsburgh Downtown Partnership.
And with their bread and butter gone, merchants have suffered.
Mr. Orlando estimates his business is off 50%. Mr. Cohen said his sales are down about 25%. Chas Schaldenbrand, owner of the Heinz Healey’s men’s store on Fifth Avenue, has seen his business fall by anywhere from 30% to 40%. Next door, at the Oxford and Derby shoe store, sales have tumbled 25% to 50% in any given month.
To point out just how bad things have been, Mr. Schaldenbrand noted he gave away 409 free neckties to regular customers last year before the pandemic hit as part of an annual February promotion.
This year, he handed out 70.
“The biggest thing for us is the workers. There are no workers Downtown,” he said.
Mr. Cohen recalls days back in the late 1970s when 6,200 people passed by his store in an hour, according to sidewalk counts.
“Now, you’re lucky if it’s 20,” he lamented.
Staying afloat
The pandemic has forced the retailers to cut back on staff and on hours. Some have taken advantage of federal stimulus help to hang on.
The Pittsburgh Downtown Partnership has done its share with a variety of promotions to help businesses stay afloat. Promotions have included $100 vouchers for people to spend — $80 at restaurants and $20 at retailers — and a program designed to stimulate more than $2.5 million in sales at Downtown eateries between December and May.
Downtown residents and Pittsburgh Cultural Trust members also got a $20 gift certificate to use at Downtown restaurants. This month, the PDP is offering 25% off for everyone at more than two dozen restaurants on Tuesdays
and Wednesdays.
The organization also has been at the forefront of efforts to expand outdoor dining.
“It’s really been a lifeline for them,” President and CEO Jeremy Waldrup said. “It’s provided safe spaces for folks to enjoy restaurant dining in a COVID-friendly way.”
Mr. Waldrup estimates the PDP is investing $2 million in helping Golden Triangle restaurants and retailers survive.
But the tough times aren’t over. Streets typically jammed with traffic on weekdays now have a lazy Sunday feel. Dozens of darkened storefronts pockmark the central business district, like burned out bulbs in a string of Christmas tree lights.
The Jones Lang LaSalle real estate firm calculated the current retail vacancy rate at 18.7%, a 1.7% increase since the start of 2020.
Waiting for the workers
Among those leaving is Bobby Best, who recently closed his hair salon in the Diamond Building and moved to the suburbs.
“People have no idea how empty Downtown is,” he said, noting, in the not-sodistant past, about 70% of his customers came from office buildings.
For many of those still hanging on, the key to a return from the dead, as in the movies, rests with a gang of heroes riding to the rescue — in this case, those office workers.
“That’s what we’re missing down here, all the office workers,” said Mike Novak, manager of Mike & Tony’s Gyros on Liberty Avenue, who estimated his business is down at least 50%.
Just when the workers will return — or how many — is anyone’s guess.
Depending on the speed of COVID-19 vaccinations, about 50% of the Downtown workforce could return by late summer, with that figure jumping to 80% by year’s end, predicted Dan Adamski, Jones Lang LaSalle senior managing director.
John Valentine, executive director of the Pittsburgh Downtown Community Development Corp., said he knows of companies that want to bring all of their workers back and others that want to bring them in at least several days a week.
The growing pace of vaccinations “is greatly facilitating the re-entry process,” Mr. Adamski said. He doesn’t expect the recently approved federal stimulus package to influence when Downtown workers come back “as much as their comfort level in safely returning to the office.”
Never coming back?
Not everyone sees office workers as the salvation.
Richard Florida, a former Carnegie Mellon University professor and one of the country’s top urban experts, believes the dramatic rise in people working from home will change downtowns for good.
“They’re not going to come back in anywhere near the way they were before,” he said.
He predicted remote working will jump from 5% to 10% of full-time employees to 20%, with another 25% to 30% doing it part time.
“This will be especially true of workers who are established in their careers and have families. That’s going to have a big impact on downtown office areas in central business districts,” he said.
“It will have an even bigger impact on cities like Pittsburgh, which have so much of their work concentrated in the Downtown area.”
Mr. Florida said central business districts are reminiscent of the old industrial age where workers have been stacked and packed in office buildings as they once were in factories.
“But, now, with remote work, there’s less of a need to pack and stack workers in those office buildings.”
Even Mr. Florida isn’t predicting a complete emptying out of the nation’s office areas.
“There will still be a lot of work done in the central business districts of major cities. They’re not going to disappear,” he said. “Pittsburgh is still going to have a central business district. It’s just going to be smaller than it was.”
While Downtown offices will remain, many companies will reserve them for younger workers who need to be acclimated into an organization, Mr. Florida said, with older workers coming in part of the time.
While Mr. Florida
believes much neighborhoods, going Pittsburgh for spectacular it — great has universities Downtown and — an it might accessible face bigger challenges than many urban areas because it is a smaller city.
“I wonder if some of its existing companies might end up moving to bigger cities. I hope not. And I do think that it will face increased competition to attract young talent,” he said.
Nonetheless, Mr. Adamski isn’t sure the work-from-home option will be as much of the future as some believe. He said some companies already are discovering hybrid work has its own challenges and obstacles.
“Companies are grappling with what schedules employees should follow, where people should sit and how best to prevent employees at home from feeling left out of impromptu office discussions or missing out on critical mentoring opportunities,” he said.
So many question marks
Mr. Best is another who doesn’t see office workers returning full time. “They realize that they can do the work from home,” he said, “and their bosses are OK with it.”
Guy Herrmann IV, owner of Carl W. Herrmann Furs, which has been in business Downtown for more than 60 years, also has concerns.
“I think the biggest question mark is what companies are going to do with their employees. Are they going to let them work remotely?” he said.
Herky Pollock, a CBRE executive vice president who specializes in retail, asserted Pittsburgh “is poised to not only fully recover but to grow beyond pre-COVID levels.”
Downtown, he said, has much going for it, from stability to traffic-drivers like offices, sports venues, the convention center, cultural attractions and a central location. One way to diminish the impact of office workers, Mr. Valentine noted, is to put more focus on residential development. Mr. Waldrup said there are nearly 4,000 such units in the pipeline in or near the Golden Triangle. “We can look at it as the death of Downtown, or we can roll up our sleeves and say. we’re not going to let it be the death of Downtown and build a greater Downtown,” Mr. Valentine stressed.
Optimism lives
Amid the carnage, there are signs of hope.
Julian Vallozzi, owner of Vallozzi’s Pittsburgh and Talia restaurants, said he has seen more life Downtown in recent weeks. More people seem to be walking the streets. It’s not as easy finding a parking spot on the first floor of a garage, and business is picking up a bit.
“I’m very optimistic. I don’t know if I’m foolish, but I don’t see Zoom calls ever replacing conducting business face to face, at least long term,” he said.
The Brooks Brothers clothing store also has seen an uptick in business since reopening Dec. 22 after closing for 10 months. There had been concerns it might stay closed for good after the shutdown.
“This is one of the last good men’s stores and women’s stores. It’s a staple, too. We’ve had people coming in for 30 or 40 years. I anticipate it being right back to normal, if not better,” said assistant manager J.J. Bedell.
Mr. Pollock noted discount retailer Target has committed to Downtown, as has Five Iron Golf. He said there are three new restaurants coming to Market Square, including a new concept by the owners of the Yard restaurant.
Dollar General also is
opening an urban format store on Wood Street. The owners of the Con Alma restaurant and jazz club in Shadyside are bringing a similar concept to the cultural district.
A cafe, diner, gastropub and new dental office also are in the works, Mr. Valentine said. While some may view vacancies as a sign of distress, “I look at those empty storefronts as opportunities.”
Despite the pandemic, Mr. Waldrup said vacant Downtown restaurant spaces appear to be in demand. “As soon as we list it, we hear rumblings, and it looks like there’s a letter of intent on it,” he said.
All of the new commitments will more than make up for the 1.7% rise in the retail vacancy rate, Mr. Pollock said.
“I have more people looking Downtown now than I have in the last 18 months combined,” he said.
Like Mr. Adamski, Mr. Waldrup sees vaccinations — and getting schools reopened — as keys in getting office workers back.
He believes the most recent federal recovery package can help support the Downtown through capital projects, loans and opportunities to recruit new businesses. He said talks along those lines already have started with business leaders and elected officials.
“I do think it’s a great opportunity to create and spark private investment,” Mr. Waldrup said.
Mr. Vallozzi’s optimism has grown in recent weeks. As folks get vaccinated, he expects Downtown — with its restaurants, shows and entertainment — to thrive once again.
“I’m starting to see a light at the end of the tunnel,” he said. “I think we’re almost through it.”