Native Pittsburgher Jim Joseph knew he couldn’t go to a bank to meet his needs, “to check the box, so to speak,” on small land improvements that would tip the scale for companies excited to lease portions of his 80-acre, West Virginia property for distribution plants or manufacturing work.
It’s a catch-22, he said. His company, Trimodal Terminal, can’t renovate its rail access or install water and gas lines without cash, and he doesn’t qualify for a loan if the land isn’t up to code.
“For a ‘start-up industrial development’ banks see that as speculative financing, and if you don’t have leases in place that assure the cash flow to service their debt, they’re not going to finance, so getting up to the dollar amount that we would need – we just couldn’t get there with any traditional bank.”
Trimodal Terminal was selected to receive the first loan from the Power of 32’s newly launched site development fund.
The collaborative initiative caters to projects in 32 counties surrounding Pittsburgh in Pennsylvania, Ohio, Maryland and West Virginia. Organizers raised $49 million toward its regional site development fund, said Dennis Yablonsky, chairman of the fund’s board of managers and CEO of the Allegheny Conference on Community Development.
Yablonsky and others estimated the Power of 32 could raise as much as $60 million, according to an earlier filing with the U.S. Securities and Exchange Commission.
The region has performed well, Yablonsky said, but landowners lose enough business to warrant stepping in.
"When we dive into the details as to why, the No. 1 factor is lack of available, prepped land,” he said. “The cost and the time it takes to get those things prepped makes us uncompetitive with other places.”
Building up the economic viability of areas around Pittsburgh is critical to the city’s long-term growth, Yablonsky said. Landowners have won about 65 percent of competitive projects tracked through the Pittsburgh Regional Alliance over the last 12 years, he said.
“Which is a real good win rate,” he said, “but we still lose 35 percent."
Joseph said he was thrilled to accept the group’s first $2.6 million loan.
"When companies come in and say, ‘You know, do you have utilities? Tell us about your rail access. Are there any environmental issues?’ We will be able to now give them the answers that they need to have so that they can say, ‘Yeah, your site is a good fit and stays in contention.’"