7 days ago
Pittsburgh developers aim for ‘American supremacy' with push for defense contracts
Pittsburgh could once again be a center for weapons manufacturing if all goes according to local developers' plans.
Walnut Capital and RIDC are looking to steer the region, which was once the country's center of steel production during World War II, toward AI and defense tech, representatives from the firms told With developments like East Liberty's AI Avenue and Robotics Row in Lawrenceville, developers aim to attract tech companies and boost real estate activity by building up office space for tech companies.
With remote methods of warfare rising in prominence, Pittsburgh has all it needs to manufacture these weapons and return to its spot as a center for wartime manufacturing, according to Joanna Doven, a strategic consultant and executive director of the AI Strike Team.
'We have unique capabilities within our defensetech companies to answer the call around building the defense technology needed to ensure American supremacy.'
Joanna Doven, a strategic consultant and executive director of the AI Strike Team
'We have unique capabilities within our defensetech companies to answer the call around building the defense technology needed to ensure American supremacy,' Doven said.
Critics counter that building up the region often comes with the destruction of affordable housing and breaks up local communities.
Altogether, developers said, these efforts will gear the tech industry to revitalize a city that saw massive postwar losses after the collapse of steel manufacturing in the late 20th century. Revitalization means greater vibrancy, defined by various shops and businesses, mixed-use housing and art, the developers said.
That's not always a good thing. Middle and low-income renters are sometimes pushed out in favor of the more lucrative office spaces and higher-cost houses that generate more money.
Neighborhoods like Lawrenceville and Bakery Square, known equally for prosperity and pricing out, already exist as examples of what the city could potentially look like when its revitalization plans are complete.
Lawrenceville United, Pro-Housing Pittsburgh and several startups that lease office space in the Lawrenceville Tech Center and Bakery Square did not respond to request for comment.
AI Avenue's ascent sparks both optimism and concern
Bakery Square, the home of over 20 AI-related companies, recently announced its new SCIF facility, which Doven said will bring in big money government defense contracts.
SCIFs are essential to communicate with the feds securely when developing weaponry. Doven said she wants Pittsburgh to be the new American center of weapons manufacturing.
The region can take advantage of ' about a trillion dollars in [Department of Defense] funding, ' Doven said. 'This is a historic amount, because warfare is now being automated; it's happening. It's happening in real time.'
A majority of the funding to Pittsburgh companies from 'America's seed fund' — the federal programs Small Business Innovation Research and Small Business Technology Transfer — already comes from the Department of Defense.
Bakery Square's developers hope to attract even more Department of Defense contracts through its AI-focused companies, she added.
Larimer, which sits directly next to the square, has also benefited from the development, according to vice chair of the Larimer Consensus Group, Deanna Davis.
Larimer Consensus Group championed the Cornerstone development in Larimer and East Liberty, a nearly 340-unit mixed-income housing development. Now, they're working with Walnut Capital to build 100 affordable housing units in Bakery Square.
Despite holdups, affordable housing projects in the neighborhood couldn't have happened without Walnut Capital, Davis said.
'The thing that impressed me the most with our relationship is you had a for-profit and a nonprofit working for the same common good,' Davis said.
Others in the neighborhood warn that these plans are detrimental to existing Black communities and that they often erase significant symbols of local history, a neighborhood tension that corporate residents like Duolingo have already been fighting for years.
Across town in Lawrenceville, another developer is aiming to reap similar defensetech gains and ultimately increase housing costs.
An affordability debate near the Lawrenceville Technology Center
Once a hub for steelmaking, most manufacturing plants sat empty in Lawrenceville by the new millennium. Around that same time, RIDC purchased a row house for $28,000 — today the average home goes for closer to $500,000.
Now, the development firm owns 16 complexes across western Pennsylvania, one of those being the Lawrenceville Technology Center, located along 47th Street in Central Lawrenceville. A hub for robotics and manufacturing, the Tech Center tenants include heavy machinery company Caterpillar and startup support org InnovationWorks.
The tenants are large drivers of federal defense contracts, according to RIDC senior vice president of business development and strategy, Tim White. The money that comes with those contracts, along with the high-paying nature of jobs around the Tech Center, bleeds into the surrounding neighborhood, he said.
'The appreciation in housing values and the vibrancy of all those restaurants is directly tied to having people with better jobs,' White said. Those jobs create more disposable income and allow people to invest in the community, he added.
But that appreciation in housing value is a major sticking point for critics of revitalization.
Groups like Lawrenceville United have pushed back on this, saying efforts to improve neighborhoods are making them too expensive for middle and lower-income residents who have long-standing ties to the area.
White from RIDC blames city zoning restrictions, not the firm's developments.
'People owned property for decades [where there] wasn't a lot of value, and then someone comes and acquires it and allows them to sort of upgrade their lifestyle and have more disposable income,' White said. 'I think those are all positive things. But the restrictions on the construction of new housing have pushed prices up in some instances.'
White is referring to a counterpoint to Inclusionary Zoning (IZ) often made by Pro-Housing Pittsburgh; IZ is a tax on new developments because it decreases potential revenue in new projects. To make up for that lost revenue, developers increase prices on new developments.
Inclusionary zoning, championed by Mayor Ed Gainey, mandates a set number of new development units as 'affordable' for low and middle-income residents in neighborhoods like Lawrenceville and Oakland.
The issue of zoning was contentious in this year's primary for mayor, and Gainey lost his bid for re-election.
Goals to build up the neighborhoods aren't slowing down
As Bakery Square continues to grow, Doven pointed to crime rates as a measure of neighborhood development.
Crime rates across Pittsburgh have trended downward for decades, not just when the region's tech boom began making headlines. Neighborhoods near Bakery Square like Larimer have seen a drop in gun violence since its peak in the early 1990s, not just since Walnut Capital purchased the site in 2007.
In 2016, around the time when many tech neighborhoods were taking off, PublicSource found that homicides were concentrated in neighborhoods like Crawford Roberts and Homewood. Three years later, the Pittsburgh Neighborhood Project found that areas of extreme poverty also lie directly next to tech neighborhoods like Lawrenceville.
With such stark differences between communities that sit directly next to each other, the expansion of tech neighborhoods could uproot long-term residents. That's also reflected in Duolingo's longstanding presence, as many of the corporate developments nearby — like the development it holds office space in now — were once affordable housing units.
In Bakery Square, Walnut Capital plans completion on its latest $850 million corporate and affordable housing development by 2027.
Despite holdups over how much of the new development could be designated as affordable, community organizations like the Larimer Consensus Group are still optimistic. Davis said conflict between the two groups is part of the process.
'Did we always play fair? No, it's just like a family,' Davis said. 'You have your good days and your bad days. But once everything was presented properly to the community, it was a win-win situation.'
