PITTSBURGH-Our Midwest cities are in the midst of transformation. The nine-to-five traffic has stretched to include crowds seeking relaxation and evening entertainment. What once was vacant is seeing the daily buzz of profitable business during the day and night.
We attribute this change, in part, to the flood of civic-minded sports investors bringing change (and business) to our cities. Civic-minded investors look beyond dollars and cents. Yes, they invest for financial profitability, but they are also investing in the community itself.
The Pittsburgh Penguins are doing just that.
The professional hockey team recently moved into a new arena at the CONSOL Energy Center, owned by the Sports and Exhibition Authority. As part of its new lease agreement, the Penguins were granted the right to develop the site of its old arena, in conjunction with the SEA and the city. Approximately 28 acres will be transformed to include a vibrant and environmentally sustainable mixed-use destination comprised of retail, entertainment, office and residential space.
The Penguins have been granted the rare opportunity to recreate the downtown Pittsburgh experience. The new development is expected to create more than 4,000 construction jobs and 3,000 permanent jobs while generating in excess of $25 million in annual tax revenues once complete. JLL has partnered with the Penguins in the revitalization project.
Detroit and Cleveland are experiencing a substantial increase in development, attributed to founder and chairman of Quicken Loans and Rock Ventures, Dan Gilbert. Over the last three years, Gilbert has invested more than $1 billion in Detroit and upwards of $600 million in Cleveland.
Gilbert, owner of the Cleveland Cavaliers, has modernized the arena in which they play (now known as The Q), and built The Horseshoe Casino, among other investments in entertainment, hotels, parking garages and business assets. In Detroit, Gilbert now owns about 2.9 million square feet of real estate in the central business district.
Gilbert is an idea guy; he invests holistically, considering the future of the community while concurrently protecting his investments. Since Gilbert's vision has become a reality, we are seeing the spill over effect in both Detroit and Cleveland. People and businesses are moving downtown and emerging onto the streets for entertainment, eating and business activities. What once was dilapidated and vacant is now vibrant. Gilbert, along with other urban-minded entrepreneurs and investors, has activated the magnet effect, enticing young people into the urban core and boosting local business return.
Looking Ahead
Investors like these make an impact, not only financially but also socially. By investing in the future of their communities, they protect the profitability of existing assets, and they take on a crucial leadership role. Civic-minded investors have the opportunity to inspire the creation of a more vibrant regional economy.
John Mackey, CEO of Whole Foods, might call this “conscious capitalism.” Mackey is driving a movement toward better business, and improved ethical operations. Jones Lang LaSalle has a likeminded vision for the future of real estate. In fact, we recently were honored to be among Ethisphere's “World's Most Ethical Companies.”
Investing in local real estate is a commitment to the community. The more public-private partnerships we have that invest in the community and sports venues, the better chance we have at creating vibrant and financially sustainable Midwest culture. Go Penguins!
JC Pelusi is an international director for JLL and works out of the Pittsburgh office. The views expressed in this column are the author's own.
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