Along the Allegheny River in the city of New Kensington, where the former Alcoa New Kensington Works once employed thousands of workers, the future of manufacturing is replacing the shuttered past. Re:Build Manufacturing, an advanced contract manufacturing company that works in industries ranging from electric vehicles, energy and aerospace to sports equipment, started operations after the first phase of the redevelopment project was completed in June.
Southwestern Pennsylvania won the competition to land Re:Build last year, beating out-of-state bidders such as Cleveland. The Regional Industrial Development Corp., a nonprofit economic development organization, had the expertise to turn the century-old aluminum works into a modern manufacturing plant. But it was patching together the $31 million needed to redevelop three buildings for Re:Build that sealed the deal. That took a partnership with Westmoreland County, grants from the state and a private foundation and low-interest loans.
Turning old into new is expensive.
“The amount of money that had to go in to rehabilitate that site, in those buildings, and the infrastructure that supported — it was more than the deal could support on its own,” said Don Smith, president of RIDC. “And yet, this is the biggest investment in New Kensington since Alcoa left in 1971. So, it's hugely important for that community and for the region.”
New state funding could mean more companies like Re:Build taking root in the region. Last month, Gov. Josh Shapiro signed a budget that included $500 million in grants to pay for site development for businesses, including $400 million for a program called Pennsylvania Strategic Investments to Enhance Sites (PA SITES). In a region dotted with former industrial sites in need of costly clean-up, this new funding could be an economic boon for Pittsburgh.
“It really is an unprecedented level of economic development investment from the state,” said Matt Smith, chief growth officer at the Allegheny Conference on Community Development. “It's both, the magnitude of the funding of the $500 million, as well as the ability to deploy it in a fast and flexible manner. This investment is going to go a long way.”
An industrial bottleneck
When companies are looking to build or expand, they take a look at a list of available sites. One of the Pittsburgh region’s “biggest roadblocks” to economic development over the past 15 years, according to Matt Smith and the Allegheny Conference, is the lack of attractive, “pad-ready” sites that rise to the top of site-selection lists. These are fully rehabbed plots of land that have water, sewer, road, utilities, even broadband infrastructure already available and connected.
For developers, it's an expensive challenge. “We see inbound inquiries all the time for sites that are 20 or 50 or 100 acres,” Don Smith said. “And we just don't have inventory for that in the region because — to prepare those sites speculatively — it's very expensive.”
The PA SITES program is designed to offset some of that risk. The grants can go toward any kind of site development and there isn’t a limit to how much money an applicant can request. Ohio has a similar site development program through JobsOhio, the state’s economic development arm funded through the state’s liquor profits.
“The very large opportunities that exist now — electric vehicle manufacturing, battery manufacturing, large scale, steel manufacturing, chip manufacturing in some cases — those investments are occurring in regions that have sites … that are ready, that can be marketed, and offered to those companies, right off, right off the shelf,” Matt Smith said.
Not just moving dirt
The state tested a $10.6 million SITES pilot last year and was met with a total of $230 million in requests. RIDC got $2.3 million from the pilot to help fix up the site of the Carrie Furnace in Rankin for industrial uses like sound stages for film productions and light manufacturing.
The SITES funding could boomerang back to the state. A recent report from Pittsburgh Works Together, a business and labor coalition, estimated that Pennsylvania will get a $5 return for every dollar they invest in the SITES program through taxes from the companies when they land on the sites.
While the funds can be put toward any kind of site development, leaders see a focus on trying to develop sites to attract large-scale manufacturing and technology companies that bring jobs with family-supporting wages.
“We don't want to move dirt and create sites without a theory of the kinds of companies and the kinds of jobs that we could attract to those sites,” said Rick Siger, Pennsylvania secretary of Community and Economic Development.
The state plans to open up the SITES program this fall. In the meantime, Matt Smith said they’re building “a coalition of stakeholders across the region” to figure out a strategic way to go after this funding.
For RIDC, this funding could allow them to go after promising properties they might have passed up, according to Don Smith. “This will allow us to identify some of those great opportunities and then execute on them right away rather than kicking the tires for years until you either have market conditions or are able to put together a financing package.”
