By Nelson Mah, Laurentian Bank
INTRODUCTION – ECONOMIC DECLINE
On May 31 at The Burroughes building in downtown Toronto, the Mayor of Hamilton, Fred Eisenberger, joined ULI senior fellow and former Mayor of Pittsburgh, Tom Murphy, to discuss urban renewal in a post-industrial context. The event, titled In Conversation With Steel Town Mayors, saw both mayors share stories on rebranding their cities and diversifying economies in the era of North America’s reinvigorated steel towns. The panel was moderated by Jeanhy Shim, Associate Director of the Brookfield Centre in Real Estate and Infrastructure at York University’s Schulich School of Business. The event was presented in partnership with the City of Hamilton and Hamilton Economic Development.
The panel began with an account of the decline of both cities. Hamilton experienced a gradual decline as a result of growing unemployment due to closures at steel mills, heavy industrial and textile manufacturing companies. In Pittsburgh, approximately 500,000 people — or 60 percent of the population — left the city between 1970 and 1995 due to steel mill closures. By 1983, Pittsburgh’s unemployment rate was a staggering 17.1 percent.
STEPS TO REBRANDING A CITY & DIVERSIFYING ECONOMIES
Step 1 – Self Assessment & A New Vision
Both panelists said that the first step was a self-assessment of their respective regions, including gathering information on land, infrastructure, and population needs. Hamilton increased staffing at its economic development office to research and gather data to help formulate a vision of the future. In the mid-1990s, Pittsburgh commissioned a report, which outlined the city’s strengths, including innovation, strong universities, healthcare, and engineering bases. The report resulted in the creation of a roadmap in which leaders identified the education, technology and healthcare sectors as key industries that could act as economic growth catalysts. Both mayors recognized that steel and heavy industrial manufacturing was not improving and each city needed a rebrand. Attracting a new major employer to rejuvenate the city was too competitive and unlikely to be successful.
Step 2 – Collaboration
The panel cited the need to engage different groups to work together to achieve the vision and ensure all have the same objective. Both cities’ partnerships with educational institutions created an educated pool of workers that would attract new employers and bring increased research funding to chosen industries. This led to Hamilton’s McMaster University Innovation Park, which over contains 0.3 million square feet of office and laboratory space on a 54-acre research facility that houses entrepreneurs, firms, researchers, industry partners and business mentors. This provides a collaborative space for each sector to co-locate, connect and commercialize.
Step 3 – Land & Deal Control & Funding
Both panelists recounted that municipal land acquisition was, and still is, important to control land use and ensure the visions for both cities move forward. This initiative prevents developers from land banking the sites and limiting development.
Hamilton’s funding came from the Hamilton Future Fund, which was created in 2002 when Hamilton Hydro was sold for $137 million. The money was put into two reserves, with $100 million set aside to fund various projects and initiatives and $37 million to fund various City and community organizations and their respective projects and initiatives. In addition, both the provincial and federal governments provided funding.
In Pittsburgh, the City re-allocated $46 million USD from its operating budget, added $60 million USD to an urban development fund and cut the public workforce to reduce costs. The City also used public funds to finance new development with lower subsidized interest rate loans. The State of Pennsylvania provided 2 percent of new funding for venture capital, education and health services. The university foundations provided an additional $8-10 million USD of funding.
Both cities have experienced a positive outcome from the rebranding and diversification. According to Statistics Canada, the population in the Hamilton census metropolitan area (which includes Burlington and Grimsby) grew by 3.7 percent between 2011 and 2016 and the CMA population is now 747,545. Since 2000, Pittsburgh’s population has grown by 40 percent. The University of Pittsburgh Medical Center (UPMC) is among the top employers in the region, with more than 40,000 employees. Other notable companies in Pittsburgh include FedEx Ground, H.J. Heinz Co., PNC Financial Services Group, Westinghouse, Apple, Intel, and Disney.
Mayor Eisenberger said that Hamilton’s future will be focused on building a city for Millennials, with a live-work balance, arts district and good transportation. Similarly, former Mayor Murphy indicated a new trend is for large U.S. employers to relocate their large suburban campus offices back to the city, which will add to the Pittsburgh’s livability.