EDDC Forges Onward

Three years ago on a late February morning, a group gathered in the multipurpose room of the Erie Art Museum. The announcement of the Erie Downtown Development Corporation's hiring of its chief executive officer was being made. 

Local attorney John Persinger became a household name throughout the region with his bid to become the first Republican mayor of Erie since 1965, drawing national attention as his campaign picked up serious momentum within our Democratic stronghold. He did not pull off the upset, but just three months after the election, he took to the stage in his transition from being known as a candidate to becoming a CEO. 

"First thing's first, I want to sit down with the Board," he said on stage. "We'll prioritize what we'll be working on, what our agenda is going to be not only for the short-term but for the long-term, because this is really focused on the long-term success of Erie in transforming the downtown core so that we can have long-term success for the region." 

In the three years between that announcement and today, the ongoing developments through the EDDC downtown footprint have been covered extensively in the pages of this publication and throughout all of Erie's media outlets. Studies have been conducted, strategic plans proposed, funds raised, properties acquired, construction begun and continuing, tenants relocated, new tenants announced, public debates and community discussions over what development in Erie could and should look like, and more.

And a pandemic.

But while the pandemic's impact has been more pronounced in other economic sectors, its interruption hasn't proven to be as disruptive to the EDDC's timeline for development. In the early days of the governor-mandated restrictions in March 2020, construction was brought to a six-week halt and the disruptions to the global supply chain did impact the procurement of equipment and supplies, but overall plans remained largely on schedule. 

But before the pandemic, the proposed plan for progress was more plodding and less pushing than Persinger preferred. After a consulting firm drafted an initial strategic plan, they recommended a steady, cautious approach. Start small. Notch some early wins. Develop properties one at a time.

"When [the EDDC team was] hired, we took a look at that plan and said, 'This is going to take us 20, 25, 30 years just revitalize a small part of downtown,'" he says. "And downtown doesn't have 20, 25, 30 years to wait. We need to do something bigger, we need to do something bolder, we need to shock the market back to life today, because we may not have it tomorrow." 

"We were on life support," adds Matthew Wachter, EDDC's vice president of finance and development. 

That bigger, bolder, shock-the-market approach is the Phase 1 Development Initiative, the work occurring on 12 properties spread across three blocks: North Park Row, State and Fifth streets west, and State and Fifth streets east. That ongoing construction is happening with the hands of nearly 200 workers from throughout the region, according to Persinger.

More than 470,000 square feet of redevelopment is underway on commercial and residential space. For the latter, more than 150 units will be brought online — 57 studio, 86 one-bedroom, and 11 two-bedroom units, accounting for more than 111,000 square feet, or 23 percent, of the development, occupying the second floors and upwards.

Ground-level commercial space takes up 21 percent of the buildout. Nearly 37,000 square feet (8 percent of the footprint) is going to first-floor retail, with just over 25,000 square feet (5 percent) allotted for restaurants and entertainment spaces, and 39,513 square feet for assembly spaces (another 8 percent).

Over 129,000 square-feet (28 percent) of the development space will house a garage. Obscured from street-level sight to accommodate parking in the downtown, the move caters to Erie's drive-to-it-and-park-by-it mentality without taking up prime visible real estate.

The remaining 28 percent of the 477,000-plus square feet will become office and supply space.

Some of the work so far has been cosmetic. Much more has been down-to-the-studs renovations (think: dealing with sewage ponds collecting in basements). While some of Downtown Erie lost its character during development in the past, Persinger says the team is working to keep as much of the look of the area in the EDDC footprint as possible to "preserve the historic integrity of these buildings."

Persinger says the work underway thus far is being driven by answering three questions: "How can we do work that's transformational? How do we give people an experience in the downtown area that they can't get in any other city in the world? And how do we bring the community together?"

He answers, in part, saying that the group doesn't want to replicate the big-box-store feel already present in Erie and the cookie-cutter model found nationwide, from Charleston, W. Va. to Sioux Falls, S.D. to San Bernardino, Calif., and nearly everywhere in between. "We want to showcase the best of Erie's local businesses because we feel that gives people a reason to want to come to the downtown area," he says. 

He adds that EDDC is designed to take on these challenging projects in working towards the long-term revitalization of the region, which Nicole Reitzell, EDDC's vice president of community engagement reaffirms.

"I think the story that isn't often told is how our organization is not at all a typical developer," she says. "We were formed as a nonprofit organization for a reason." 

She cites the Flagship City Food Hall and proposed grocery market, which continues to generate a buzz about Erie's downtown. Discussions for the latter are underway with Erie's Whole Foods Co-op, with its board discussing the move to downtown — a USDA recognized food desert — later this month. 

According to Wachter, the valuation of that property, after $25 million injected in investment, comes to $7 million — a return on investment not many developers would have the patience to tolerate. To Reitzell, that's important for people to be aware of when it comes to considering and understanding EDDC's role in the development process.

"Sometimes people look at the work downtown, they might think in the back of their head that somebody is getting rich off of this. Well, we certainly hope that somebody does get rich and that there are great economic benefits to this, but not to the [EDDC team] or to our board." 

Instead, she cites Natasha Pacely, whose A Taste of Love Southern fusion business will occupy one of the nine stalls in the food hall and who was previously operating out of the Booker T. Washington community center.

"Now she has the opportunity to come and really grow her business into what she wants it to be," Reitzell says. "I could see her opening a restaurant in the next five to 10 years if I were to guess. But that is where the economic opportunity really lies is with the people who can start and grow businesses and get jobs within this footprint."

Wachter says this non-traditional approach to development came as "outside-the-box thinking" when traditional methods presented more "difficult obstacles to overcome" or "weren't available or appropriate." But local investors — those willing to be first movers in a challenging investment market give confidence to others. That, Wachter points out, has been the over $27 million initially raised for the Erie Equity Fund, reported on thoroughly in the early days of the EDDC's launch.

Wachter cites a piece written in April 2019 in the Financial Times by renowned urbanist and Director of the Nowak Metro Finance Lab at Drexel University Bruce Katz, who's no stranger to Erie. In it, Katz claims that "the U.S. doesn't have a capital problem; it has an organizational problem," then rhetorically asking: "So how can capital flows be rewired to reverse the export of wealth?"

For Erie, Wachter explains, a way to answer that question of rewiring is the EDDC, encouraging and securing local investment in local development to pave a smooth road for outside investment to travel into the region. 

"That first-mover aspect of this is a really essential component to everything that we're doing, because it's allowed us to get in to acquire this property and to do the really hard work of development to understand what we've acquired — how the buildings can be developed, what that means from a financial perspective in order to at least break even," he says. "And in many ways, that's what we're going for." 

Aside from delaying construction, another disruption from the COVID-19 pandemic has been to the Community Engagement Council, a group of 25 folks — from those currently residing in the EDDC's footprint, to city administration officials, to community activists. Prior to the pandemic, the group was convening regularly for coffee chats, but with in-person gatherings restricted during the pandemic, the feedback sessions have had to pivot to socially-distanced alternatives. 

One thing that did emerge from those conversations: The need for a grocery store. And a need to have that grocery store be accessible and affordable to the entire population. The downtown location satisfies the first, and according to Reitzell, the EDDC is working to ensure the grocer and other vendors will accept SNAP.

As he looks back on EDDC's Phase 1 Development Initiative, Persinger says it will have resulted in: $100 million-plus of total investment; 477,000 total square feet of revitalized and new space; eight historic properties preserved; 100,000 square feet of new commercial space; 25-plus new businesses; 300-plus new jobs; 140-plus new residential units; a 340-space parking garage; new programming and activities throughout downtown; as well as new public artwork.

Persinger adds that of that total investment, not a single taxpayer dollar has been used. Wachter adds that the EDDC, while a nonprofit, is paying real estate property taxes on all the properties it's acquired.

"We are a completely private entity, but we've been very public and transparent," Persinger says, referencing Reitzell's role in community engagement. 

Thus, development has occurred, and the development continues still. So does the ability for conversations. There's April's Whole Foods discussion still yet to be had. And with much work done but much still left ahead to do, there's opportunity and space for the community to continue weighing in on the future of Erie's downtown and what it could and should be. 

Ben Speggen can be reached on Twitter @BenSpeggen and via email at bspeggen@eriereader.com