A shared Vision for East Allegheny July 1, 2007

Economic Development Plan

Vision Statement

The Planning Area will provide basic goods and services to adequately supply the needs of its residents. The Area will accommodate a reasonable range of employment such that the younger families may take advantage of stable housing stock in revitalized and new neighborhoods throughout the Township and Boroughs. Certain specialties, namely those oriented toward regional service accessed through both the Mon-Fayette Expressway and Route 30 corridors, will flourish in harmony with the residential and natural components of the planning area, as well as its traditional town centers.

Introduction

Section 301 of the Municipalities Planning Code mandates that comprehensive plans shall include a land use plan for the intensity and character of development, including business development. Section 301 also mandates that economic development consequences of a comprehensive plan be considered along with various other interrelationships among other plans components. Therefore, this distinct chapter will examine the business climate of the planning area along with employment and income characteristics of current residents and employment provided within the geographic limits of the planning area.

The Mon Valley Economic Development Strategy

Economic development and redevelopment within the Mon Valley remain an ongoing priority of the Allegheny County Department of Economic Development. Therefore, Allegheny County Economic Development contracted with Tripp-Umbach and Associates Inc. to develop the “Mon Valley Economic Development Strategy.” The study includes North Versailles, East McKeesport, and Wall. The Department supplied North Versailles Township and its consultants with a formalized draft of background analysis and recommendations that will ultimately become part of a final plan. Therefore, much of this section will draw upon the background data, analysis, and conclusions contained in this report.

The study contained a survey of 38 Mon Valley employers including Advanced Rainwater Systems and Magdic Precision Tooling in East McKeesport; and Jaten Associates in North Versailles. Results of the survey are cited throughout this chapter and other portions of this plan.
Generally, the plan employs standard economic analyses to determine those business sectors the Mon Valley should attempt to attract or retain based on the Valley’s competitive advantage in such areas.

The State of Business and Employment in the Planning Area

Report II of the Mon Valley Economic Development Strategy, Economic Analysis, identifies North Versailles as a notable secondary employment sector within the Mon-Valley (with the primary areas identified as Pittsburgh’s Mon Valley neighborhoods, West Mifflin, and McKeesport zip codes).

Table 1: Job Output

Municipality	Jobs	Output (in millions)	Dollar Output per Job
North Versailles	5,099	376.188	$73,776.82
East McKeesport	666	69.97	$105,060.06

The preceding table outlines the economic output and total number of jobs in North Versailles and East McKeesport as of the year 2000. The number of jobs in North Versailles accounts for 4.7% of total employment and 2.9% of total output of the Mon Valley. East McKeesport accounts for .6 and .5% of such employment and output. Unfortunately, comparable numbers are not available for Wall Borough. Because the available numbers are based on zip codes, Wilmerding and Wall are combined. Therefore, data for Wall would be dramatically skewed.

Strength Sectors

The Mon Valley study identifies sectors that possess both existing and emerging growth as well as sectors that should be retained. Those industries with local specialization were analyzed for level of employment growth and subsequently for the level of local growth in the competitive share of the particular industry. The chart below was obtained directly from Report II of the Mon Valley Economic Development Strategy as provided by the Allegheny County Department of Economic Development in February of 2004.

The study employed sectors classified using IMPLAN software through the Minnesota IMPLAN Group Inc. The IMPLAN sectors were also cross-referenced with SIC codes.

The following table illustrates those IMPLAN sectors present in East McKeesport and North Versailles.

Table 2: Strength Sectors

IMPLAN #	Category	Municipality	Growth Category
501	Residential Care	EMCK, NVT	Target for Further Growth-Existing Strength
488	Amusement and Recreation Services	NVT	Target for Further Growth-Existing Strength
508	Management and Consulting Services	NVT	Target for Further Growth-Emerging Growth
286	Architectural Metal Work	NVT	Low Challenge Retention Sector-Retention Target
321	Special Dies and Tools and Accessories	NVT	High Challenge Retention Sector-Retention Target
354	Industrial Machines	EMCK	High Challenge Retention Sector-Retention Target
475	Computer and Data Processing	EMCK	High Challenge Retention Sector-Retention Target
220	Miscellaneous Plastics Products	NVT	High Challenge Retention Sector-Retention Target
166	Paper Coated and Laminated	NVT	High Challenge Retention Sector-Retention Target

Source: Tripp-Umbach Associates

This chapter examines selected NAICS 1997 Codes within East McKeesport and North Versailles that are based both upon IMPLAN sectors identified as “strength” or “retention” sectors as well as other sectors with apparent concentrations in North Versailles and East McKeesport. The following table indicates the location quotient of each based on data obtained from the 1997 Economic Census. (Unfortunately, the level of detail utilized in this analysis will not be available from the 2002 Economic Census until 2005.) Once again, data are classified and compiled by zip code and are not accurately available for Wall Borough.

Location quotients are defined as follows and help to indicate the concentration of an industry in a particular area. Concentrations within a certain area versus others indicate that the particular industry exports services or goods beyond what is needed locally. Therefore, it is considered a primary sector that serves as a basis for industry and the creation of additional secondary jobs. In this instance, industry in North Versailles or East McKeesport is analyzed versus Allegheny County as a whole. Any quotient over 1 indicates a percentage of concentration. For example, a quotient of 1.5, indicates that 50% higher concentration of the industry than in the county as a whole.
Lqi = (ei/e) / (Ei/E)

ei = Local employment in industry i

e = Total local employment

Ei = County employment in industry i

E = Total County employment

Table 3: North Versailles Location Quotients

NAICS Code	Sector	Number of Local Establishments	Total Local Employment in Industry	Total County Employment in Industry	Location Quotient
44-45	Retail Trade	54	749	78,841	2.59
442	Furniture and Home Furnishings Stores	7	49	2,905	4.59
444	Building Material and Garden Equipment Supplies Dealers	4	51	5,446	2.55
722	Food Service and Drinking Places	26	634	47,074	3.67
42	Wholesale Trade	16	174	33,034	1.43
62	Health Care and Social Assistance	14	152	39,435	1.05
71	Arts, Entertainment, and Recreation	6	62	5,321	3.17

Table 4: East McKeesport Location Quotients

NAICS Code	Sector	Number of Local Establishments	Total Local Employment in Industry	Total County Employment in Industry	Location Quotient
44-45	Retail Trade	8	40	78,841	1.03
722	Food Service and Drinking Places	6	51	47,074	2.20
62	Health Care and Social Assistance	8	27	39,435	1.39

The highest quotient in 1997 related to furniture and home furnishing stores. Restaurants, food service and drinking places, ranked at a concentration of 267% of expected concentration countywide in North Versailles and 220% in East McKeesport. Building Material and Garden Supplies dealers also show a respectable concentration in this 1997 data. It is important to point out that this predates the construction of Home Depot in 2001. Generally, North Versailles exhibits a strong concentration of retail employment and development. As pointed out in the Mon Valley study, a strong concentration of recreational and entertainment establishments also exist in North Versailles as they do in the Mon Valley as a whole. Health Care and Social assistance includes a wide array of services ranging from physicians offices to residential care. Some data on residential care is available in the Housing section of this plan. Unfortunately, data at this level was not available through the Economic Census due to the small number of establishments contained in the area.

Table 5: North Versailles: Commercial Occupancy

North Versailles Commercial Occupancy Permits Issued
Year	Permits Issued
2000	40
2001	12
2002	37
2003	13

Table 5 may likely demonstrate a pattern of business transience. Assuming the majority of permits were issued to businesses intended to occupy existing commercial space, the data for North Versailles may indicate of two-year cycle of businesses. Given, the high concentration of retail noted in Table 3 and the sheer number of establishments, we might assume that many small retail businesses occupy existing space for two-year periods. Thus, while retail is a general economic niche of the planning area, the stability of smaller retail establishments is an area of concern.

Resident Employment Characteristics

Table 6: Percent of Total Resident Employment by Sector, 2000 Census

Industry	Construction	Manufacturing	Wholesale	Retail	Transportation/warehousing/utilities	Information	Finance, insurance, real estate and rental and leasing	Professional, scientific, management, administrative, and waste management services	Professional, scientific, and technical services	Administrative and support and waste management services	Educational, health and social services:	Arts, entertainment, recreation, accommodation and food services	Other services (except public administration)
East McKeesport	5%	8%	4%	16%	9%	4%	7%	6%	4%	2%	24%	10%	6%
North Versailles	6%	13%	4%	16%	6%	4%	6%	9%	5%	4%	19%	8%	5%
Wall	10%	12%	7%	15%	6%	2%	6%	5%	1%	4%	16%	11%	7%
County	5%	9%	3%	12%	6%	3%	9%	11%	8%	3%	24%	8%	5%

The preceding table compares employment by sector of planning area residents with that of Allegheny County as a whole. Generally, percentages in the areas of manufacturing and retail were higher than the overall County percentage, while professional and scientific services encompassed a lower percentage. North Versailles demonstrated the highest percentage of those employed in professional, scientific, and technical services. The percentage of employment in education, health and social services in East McKeesport was equal to that of the County while the same in North Versailles and Wall was five and eight percent lower, respectively. Generally, categories showing administrative support and information are slightly more concentrated than that of Allegheny County.

Table 7: Total Employed in Municipality of Residence, 2000 Census

	Total Employed	Worked in Borough/Township of Residence	Worked outside of Borough/Township of Residence	% Worked in Borough/Township of Residence
Allegheny County	582,362	164,764	417,598	28%
East McKeesport	1,096	75	1,021	7%
North Versailles	4,964	775	4,189	16%
Wall	331	13	318	4%

Table 7 illustrates the percentage of each municipality’s respective workforce employed at a location within that municipality. As may be expected, the boroughs demonstrate a significantly lower percentage of its workforce employed within the respective municipality while the number. Several explanations are offered concerning the low percentage those working in the community of residency:

• 
  While the number of jobs within the planning area, including the boroughs, far exceeds the number of municipal residents employed in that same municipality, many such jobs lie within the lowing paying retail sector.
  

• 
  The Township was historically a “bedroom” community, where residents working in manufacturing sectors commuted to other areas of the Mon Valley.
  

• 
  Those employed in the boroughs do exceed jobs available while the jobs available in North Versailles Township only slightly exceed the number of residents in the workforce.
  

Economic Activity

The two most outstanding forms of expected development within the planning area lie north of Route 30. The first project is located in the northeast portion of the Township. It includes property acquired by the Allegheny County Redevelopment Authority, bordering Route 30 and in close proximity to a planned interchange with the Mon-Fayette Expressway. The core of the development, 35 acres and several small parcels, are noted in the first phase of the Allegheny County’s 2030 Long Range Economic Development Plan as described therein as follows:

“A private development company proposes to develop a mixed-use project on 35 acres of vacant property in North Versailles on State Route 30 (Lincoln Highway). The site will require the construction of a high-capacity intersection per PennDOT Specifications along with a public access road into the new development site.”

The proposed development, a project of One Hundred Limited, is slated to encompass an existing 135-acre golf course and is planned to include the following:

• 
  55 Single Family Homes
  
• 
  40 Townhouses
  
• 
  150 Mid-rise apartments
  
• 
  Residential Care for Seniors
  
• 
  A 200,000 square foot ambulatory hospital
  
• 
  Retail
  
• 
  Offices of Physicians
  

The second expected development lies on an approximately 230 acre tract abutting and directly north of Naser Road, currently vacant. Expected development on this property is primarily commercial, including “big box” retail and smaller retail outparcels.

The majority of preceding uses qualify as “base” industries within the planning area, meaning that they fill existing “strength” sectors, include location quotients higher than one (1), and are therefore assumed to serve a more regional population. It may be assumed, therefore, that additional secondary or localized jobs may be precipitated by such development.

Findings of Fact

1. 
   Industrial and Manufacturing Sector employers, while a challenge to retain, fill an important competitive niche within the planning area and the Mon Valley Region.
   

2. 
   “Office” or administrative sectors such as “management and consulting,” are emerging growth sectors, currently concentrated in the planning area that should be encouraged.
   

3. 
   Residential Care, in conjunction with associated Health and Social Services, represent existing niches, the growth of which should be encouraged.
   

4. 
   Small retail establishments, while part of an existing strength sector, are somewhat unstable within North Versailles Township, given the frequent change of business establishments/tenants at existing locations.
   

5. 
   Retail, in conjunction with food service, is an existing specialty within the planning area.
   

6. 
   Recreation and amusement are area of existing strength and concentration, for which continued growth is feasible.
   

7. 
   The vast majority of employed residents commute to places of work in areas outside of the planning area, due in part to the amount and type of work available in the planning area, namely retail jobs.
   

8. 
   The large-scale development expected in North Versailles, namely in the areas of health care, office, residential care, and large-scale retail, all of which are base industries may likely precipitate growth of business establishments and jobs in secondary or more localized areas.