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The retail boom may slow a bit but should continue

Sunday, April 09, 2000

By Teresa F. Lindeman, Post-Gazette Staff Writer

Before the new Target discount store in Cranberry opened last month, management was feeling kind of desperate. The managers needed about 200 people to run the place, and the applications weren't pouring in.

Someone proposed driving a help-wanted billboard around the area. District Team Leader Mary Walters laughed -- then approved the crazy idea. Those jobs had to get filled somehow.

  Anita Dufalla - Post-Gazette

The retail industry has been in a competitive hiring mode for a while now, as a steady wave of new storefronts has erupted across the hills of southwestern Pennsylvania.

Target, for one, had nothing here a year ago. Now, the Minneapolis-based upscale discounter has pasted its trademark bull's-eye on seven, 120,000-square-foot sites in the prime shopping hubs from Hempfield and Monroeville to the east, South Strabane and Robinson to the south and west, and Cranberry and McCandless to the north. It's even taken a chance on Homestead in the urban core, and, this fall, the chain will go to West Mifflin, near Century III Mall.

The wave of shopping development has been notable both for its sheer volume -- despite several large closings, the sector added 1,600 total jobs last year -- and for its broad reach -- communities from suburban North Fayette to urban East Liberty have landed new stores.

An estimated 1.44 million square feet in store space was completed in 1999, according to real estate firm Grubb & Ellis Co. Washington County alone doubled its retail space with projects such as Strabane Square and Trinity Point.

Last year may have been the peak. Grubb & Ellis is projecting 1.2 million square feet will be completed this year, dropping to 900,000 next year.

"I think it's going to start to slow down a little bit," agreed Jeffrey Ackerman, executive vice president with real estate firm CB Richard Ellis/Pittsburgh.

Ackerman figures the region can continue to add retail space for another couple of years before it reaches the point of being overbuilt.

With many of the superstore chains finally here, the next 18 to 24 months could bring more specialty and entertainment-oriented retailers, predicted Kevin Langholz, of Pittsburgh real estate brokerage Langholz-Wilson & Associates Inc.

The big players already here will probably concentrate on filling in markets.

Target expects to keep adding stores, said Walters. Sales so far have exceeded the company's projections. "The Pittsburgh market has been phenomenal for Target."

Other arrivals in the past year or so have included Media Play entertainment stores, Frank's Nursery & Crafts, Panera Bread, Noodle Kidoodle and Half Price Books. In the next several months, the region is expected to get its first Costco warehouse club, in Cranberry; its first Dave & Buster's theme restaurant and DSW Shoe Warehouse, at the Waterfront; and its first Lord & Taylor department store, Downtown.

The growth hasn't all come from new names. Much has been driven by familiar companies taking advantage of a strong economy and low interest rates to remodel, relocate or add stores.

Grocers Giant Eagle and Shop 'n Save continued to build new sites, while remodeling older properties to include the latest tweaks to supermarket design.

Shoppers, not steel workers, now populate the waterfront along Homestead. The new development will eventually have offices and apartments, but the first arrivals have been retailers such as Giant Eagle and Target. (Post-Gazette file photo) 

They're facing a challenge from Wal-Mart, already a powerhouse here, which is rolling out its megastore concept, selling both groceries and discount goods.

Allegheny County's first supercenter opened in North Versailles in January. Others in the region include Belle Vernon, New Castle and Mount Pleasant. North Fayette's existing site is scheduled for expansion and Monaca, Beaver County, is scheduled to have a supercenter by 2001. Greensburg and Cranberry can expect to get their first supercenters soon, probably expansions of existing locations.

In some cases, it seems shoppers looking for the best prices and selection are just exchanging one chain for another.

As the nation's two largest home improvement chains, The Home Depot and Lowe's, settled heavily into the region, Hechinger and Builders Square held going-out-of-business sales and shuttered eight stores employing an estimated 700 workers.

The Service Merchandise discount chain didn't go out of business everywhere, but it raised the white flag here. Five locations that provided work for several hundred people closed last summer. Only the store in Hempfield, near Greensburg, survived.

Still, the layoffs weren't enough to offset the industry's overall employment gains. The state calculates that the Pittsburgh metropolitan statistical area supported an average of 201,000 retail positions last year, up almost 1 percent from the 199,400 in 1998.

"It's one of the jobs generators," said Roberta G. Wilson, regional industry and business analyst with the Pennsylvania Department of Labor and Industry.

It's not one of the higher-paying sectors. In a tight market, that means it's tough to fill positions behind the cash register or in the stockroom. The average retail salesperson in the Pittsburgh region made $17,230 with the average cashier collecting $13,760, based on a 1998 state wage survey, the most recent available.

When Connecticut-based Ames Department Store Inc. bought Massachusetts-based Hills Department Stores last year, Ames' chief Joseph R. Ettore vowed he'd do his best to keep most of Hills in-store staff. "We're inviting everyone to stay," he said in a January interview.

Hiring issues vary by location. "Cranberry was our toughest," said Walters, at Target.

Retailers are attracted to the North Hills community's growing population of professionals with nice paychecks. Rental rates there have risen more than 30 percent in the past three years, according to Grubb & Ellis.

That kind of record encourages developers to build more, no matter what employment headaches their tenants can expect. Target just moved into the new Cranberry Commons, a strip center adding about 500,000 square feet of retail space to the community. A Rhode Island company is studying the idea of building a new, super-regional mall for the area.

It's not just Cranberry, said Langholz. "There's a lot of demand for Pittsburgh. They're leasing as fast as they can build" the new developments.

Because of the area's uneven terrain, national retailers often have to wait awhile before they can find the right space.

The wait has been years along the Route 28 corridor, where a mall has been planned in Frazer. Area residents could end up with a group of big box retailers first if competing developers win environmental approvals for a project in Harmar.

Over in Robinson, this could finally be the year that construction begins on a long-awaited, two-story enclosed mall. It comes just in time. The Pointe at North Fayette, on the other side of the highway, is almost full.

Much of the frenzied activity has been fueled by private business, but urban planners have joined the party, too. They see shopping as an economic development engine that can bring revenue and jobs to neighborhoods.

The city of Pittsburgh used incentives to lure The Home Depot into East Liberty. The 200-employee store opened in February, and officials hope more retailers will follow.

Planners also envision retail playing a role in making Downtown more attractive, although the future of the city's proposal to create a new entertainment-retail center along Fifth and Forbes avenues is uncertain.

One of the most interesting examples of the consumer economy's role in regional development can be found over at the former USX Homestead works site along the Monongahela River.

The mills closed years ago, and lengthy debates raged over the future of the massive property. It took cooperation from public officials and private developers to make the Waterfront project possible. Eventually, there will be offices and residential properties there.

But the pioneers have been merchants. Late last year, McDonald's began serving up Happy Meals, followed quickly by grand openings at Lowe's hardware, Giant Eagle and Target. A 22-screen Loews movie theater turns on the projectors in May, with more restaurants and stores to follow.

Retailers may not pay as well as the steel mills, but they are hiring.

Just six months after opening its first location here, Walters said Target had 1,300 people on the payroll in southwestern Pennsylvania. "It really is amazing."

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