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Pittsburg State University Joins in the Block22 Development to Revitalize Downtown Pittsburg, Kansas
Pittsburg State University (PSU), with 7,000 students, is located only one mile south of downtown Pittsburg, the education, healthcare, retail, and hospitality center of southeastern Kansas. PSU and the city had a chilly relationship that reached its lowest point in 2007, when the city council turned down PSU’s request to close a street on campus to create a pedestrian thoroughfare. During this period PSU was also wrestling with decades of decreasing state funding, declining enrollment, and rising tuition. The 2010 election brought in a new mayor in Pittsburg, and the new city council hired a professional city manager, creating a team interested in working cooperatively with the university. PSU president Steve Scott, who was installed the previous year, shared this aspiration. The city and PSU engaged in several efforts, including the formation of a joint advisory board to explore ways to promote economic development. PSU was interested in creating an event facility that would enhance tourism through business meetings, entertainment, and community events, and the city contributed $5 million toward what became the Robert W. Plaster Center, a state-of-the-art indoor track and field facility that can also be used for large trade shows and conferences. In addition, PSU signed a contract with the city to lead its economic development program. In 2015, the city and PSU began a three-year process to plan and develop Block22, a project to revitalize four historic buildings and, eventually, all of downtown Pittsburg.
Block22 Brings Residents, Businesses, and Innovation to Downtown
The city approached PSU with an idea for reusing Pittsburg’s oldest commercial building, the Opera House Hotel. The 1876 building was an emblem of the city’s decline that was on the verge of being condemned. Before this request, the city had interviewed several developers who could not determine a financially viable way to rehabilitate the building. Finally, one developer, the Vecino Group, decided that the project could work if PSU became an anchor tenant, reusing the building for student housing. As the city, Vecino, and PSU discussed the project, according to Shawn Naccarato, chief strategy officer for PSU, they saw an opportunity to expand it to include four historic buildings in a multiuse development that could become a hub for downtown vitality and prosperity.
Block22 is a three-phased project consisting of the revitalization of four historic buildings on either side of Broadway at its intersection with 4th Street. The National Bank and Opera House Hotel buildings are on the eastern side of Broadway, and the Commerce and Baxter buildings occupy the western side. The development is the product of a public-private partnership among PSU, the city of Pittsburg, and the Vecino Group, a development firm specializing in housing that acquired the four buildings. The project broke ground in April 2017 with the goal of enlivening this important downtown crossroads as an “innovative, mix-use, living-learning community.” The first phase of development — the conversion of the upper stories of all four buildings in Block22 to student housing — was completed in August 2018.
The residential component of Block22 consists of 99 apartments managed by PSU as student housing. The units include 2 two-bedroom suites and 97 one-bedroom flats and lofts; all include a full kitchen and are completely furnished. The apartment layouts, special features, and historic details as well as the downtown location make the Block22 residences attractive to many students, and all the apartments were rented before the space’s opening date. PSU’s participation in the residential element of Block22 demonstrates the university’s deep commitment to downtown revitalization. PSU did not need additional student housing; numerous on-campus beds at the university are not filled. Nevertheless, PSU believed that investing in the community and supporting Pittsburg’s downtown revitalization were important. PSU also wanted its students to interact with the community beyond the campus and support the city’s businesses. PSU’s Office of University Housing accepts applications for the units from full-time upper-level and graduate students and rents them for $550 to $650 per month, including utilities; a $50 per month discount is available for income-qualifying students. Residents also have access to a patio, lounges, and study areas. The university has reserved 100 parking spaces for Block22 residents in 5 public parking lots within a block of the development, and PSU provides a shuttle bus that runs from Block22 to the campus.
The Foundry, the second phase of Block22, opened in November 2018 on the ground floor of the National Bank and Opera House Hotel buildings. The 16,000-square-foot space is intended to support business innovation and entrepreneurship. The Foundry includes coworking space for local entrepreneurs to meet and cultivate an entrepreneurial hub for southeastern Kansas. The coworking space includes both dedicated and flexible desk space along with separate meeting rooms and offers access to WiFi and printers. The Foundry’s Pitsco Idea Shop is a makerspace serving three groups: middle and high school students who are introduced to innovation and entrepreneurship as well as the resources of PSU; entrepreneurs who need an upscale makerspace with business support services; and PSU students who are not majoring in technology but are seeking technological tools and other opportunities for art and commerce. In addition to a digital studio with 3D and large-format printers, robotics, and textile equipment, the Pitsco Idea Shop includes the Foundry Garage, which has larger-scale equipment for working with heavy materials. All these areas are available to individuals and companies that have purchased memberships. Membership for Block22’s student residents is included in their apartment leases. Membership revenues support training, conferences, contests, and social events as well as staff salaries. As of 2019, business members included a high-speed internet provider, an educational service provider, a digital marketing firm, a web developer, an investment company, and a video production startup. A coffeehouse was enticed to relocate to The Foundry because of the larger space and environment at Block22. In addition, The Foundry welcomed its first founding member, Kansas Crossing Casino, which is investing $60,000 over 3 years to support the organization’s economic development efforts.
Another tenant at The Foundry is PSU’s University Strategic Initiatives (USI), which was created in 2017 as a unit of the university president’s office. Tasked with coordinating and expanding PSU’s innovation and economic development endeavors, USI manages The Foundry and the other commercial components that make up the third phase of Block22. The businesses locating on the ground floor beneath the student housing include a boutique for local artisans and several restaurants offering fast casual dining. These establishments, along with the businesses located in The Foundry, include new enterprises, companies relocating from elsewhere in Pittsburg, and new branches for businesses started in other cities. Some of the companies are women-owned businesses, and several PSU students (one of whom rents an apartment in Block22) and graduates are among the business owners and staff. Beyond the downtown redevelopment project, USI houses PSU’s Government and Community Relations team and manages the Kansas Polymer Research Center and Enterprise PSU, which provides business services to The Foundry members. A primary partner in Enterprise PSU is the Kansas Small Business Development Center, which has also located in The Foundry.
Financing for Block22
The development costs for Block22 totaled $18.8 million (table 1). The three participants in the public-private partnership contributed to the project’s financing. The city provided a loan through its Economic Development Revolving Loan Fund, which uses proceeds from a local half-cent retail sales tax. PSU’s participation included $1.5 million from a fundraising effort as well as lease payments for the student housing and The Foundry, which will be used to pay for a $5.4 million loan that the Vecino Group had assumed. The developer also secured $10.1 million in federal historic and New Markets tax credits.
Table 1: Financing for Block22
|Pittsburg Economic Development Revolving Loan Fund||$1.8 million|
|PSU fundraising||1.5 million|
|Tax credits||10.1 million|
Building on Block22’s Success
Because of the success of Block22, the University Economic Development Association selected PSU as the winner of its 2018 Award of Excellence in the Place + Innovation category. Not resting on their laurels, the city and PSU continue to work together closely to ensure that their efforts are strategically aligned. The Joint City-University Advisory Board is the primary vehicle for facilitating joint planning, and PSU is an active participant in the Imagine Pittsburg 2030 community visioning and strategic planning process. The city and PSU also continue to seek other ways to improve Block22, revitalize Pittsburg’s downtown, and secure the city’s economic future. PSU and the city began one new effort in 2019, when the Center on Rural Innovation selected Block22 as a rural innovation hub in the first round of the center’s Rural Innovation Initiative. Under contract with the U.S. Department of Commerce to identify initiatives to be funded by federal grants, the center is a network of rural cities and towns seeking shared prosperity through economic innovation.