Dec 30, 2016 9 min read

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1. Energy: Amidst continuing cutbacks, layoffs and closures among some companies in the natural gas supply chain in the first quarter, the industry offered hope of a turnaround. In an April update before area landowners, David Spigelmyer, president of the Marcellus Shale Coalition, and Nathan Snyder, a certified financial analyst who follows the natural gas industry, predicted that drilling in the Marcellus and Utica shale regions would return to normal levels by the third quarter of 2017, provided that natural gas prices improved to between $3.50 and $4.00 per thousand cubic feet.

The comments of Spigelmyer and Snyder preceded by two months the June announcement by Royal Dutch Shell that it would build an ethane cracker plant in Beaver County over the next three years.

While 2016 closed with prices near the $3.50 level after climbing steadily most of the year, Snyder also predicted that the remainder of 2016 would be a year of industry consolidation, with the best-capitalized companies bolstering themselves with acquisitions. His comment was prescient, as the following acquisitions totaling nearly $7.6 billion were announced:

• Range Resources, one of the biggest producers in the Marcellus, announced in May it was acquiring Houston-based Memorial Resource Development for $4.4 billion to gain shale assets in North Louisiana;

• Rice Energy in October completed the acquisition of Vantage Energy, for $2.7 billion, and sold Vantage’s midstream assets to Rice Midstream Partners. The transactions grew Rice’s net acreage in the Marcellus and Ohio Utica shale cores to 231,000 acres and 1,164 drilling locations;

• Also in October, EQT Corp. acquired 42,600 net acres and production of 42 million cubic feet per day from Trans Energy Inc. for $513 million, as well as 17,000 net acres and production of 2 Mmcfe per day from a third party for $170 million;

• In June, CONSOL Energy announced that production had begun at the first six wells it drilled at Pittsburgh International Airport, the first of a projected 47 Marcellus Shale wells (with the possibility of Upper Devonian wells later) the company will drill under its 9,000-acre lease it established earlier with the airport;

• In November, CONSOL Energy and Noble Energy ended their five-year-old Marcellus Shale 50-50 joint venture, splitting 669,000 acres, with CONSOL taking a 100 percent interest in 306,000 acres in Pennsylvania and Noble taking total interest in 369,000 acres in West Virginia.

While pipeline construction activity continued with opposition from some landowners who filed lawsuits, the industry proceeded with its buildout of infrastructure. FirstEnergy was building a transmission substation near Burgettstown to support the nearby midstream activities of MarkWest Energy as well as Energy Transfer Partners’ “Revolution” cryogenic complex, both of which were expected to be completed by 2018. The ETP compressor station in Smith Township is the origin for the company’s Rover Pipeline, which will reach natural gas markets in the Midwest. Sunoco Logistics Partners, which is buying ETP, said in March its Mariner East 1 pipeline began shipping ethane and propane to Marcus Hook near Philadelphia. The company, which is also building Mariner East 2, an expansion of its Mariner system with origin points in Ohio, West Virginia and Pennsylvania, expects the project to be completed in the first half of 2017.

As coal continued its decline in 2016 (see Greene County Business Top 5), the most visible impact of its demise in Washington County was the closure of the Caterpillar plant in Houston, which manufactured both post and pillar and longwall mining equipment and employed at least 155 people.

2. Changing hands: Within 23 days last summer, one of Washington County’s largest employers and its largest enclosed shopping mall came under new ownership.

The sale of Washington Crown Center, its 62 stores and 676,000 square feet of retail was finalized Aug. 16. Kohan Retail Investment Group of Great Neck, N.Y., paid Pennsylvania Real Estate Investment Trust an estimated $20 million for the mall in North Franklin Township.

On Sept. 7, a new owner and operator took over the Meadows Racetrack & Casino. It was a long-awaited set of moves, nine months after a $440 million deal was announced for the entertainment destination in North Strabane Township.

They were the most visible real estate transactions completed in 2016, and neither was a surprise.

PREIT said in January 2015 that it planned to sell Crown Center, a property it had owned since 2003, and Uniontown Mall. The Philadelphia-based investment firm said at the time it wanted to move Western Pennsylvania malls as part of an effort to grow its portfolio in larger markets.

Uniontown Mall was sold first, in August 2015. PREIT’s deal with Kohan was announced 12 months later, the same day the company put Beaver County Mall in Center Township on the block.

Kohan said on its website it specializes in buying and turning around distressed shopping malls. Principal Mike Kohan, however, told the Observer-Reporter “this is not a distressed mall. I think that’s a great mall.”

The Meadows sale reached the finish line just after Labor Day. Pinnacle Entertainment Inc., of Las Vegas, became operator of the facility when the Pennsylvania Gaming Control Board approved the change of control of the slot machine license held by the previous operator, Washington Trotting Association.

The board also approved the transfer of real estate assets to Gaming and Leisure Properties Inc. of Wyomissing, giving it ownership of the property it leases to Pinnacle.

About 1,300 work full- or part-time at The Meadows.

Nine months earlier, GLPI purchased The Meadows for $440 million from Las Vegas-based Cannery Casino Resorts LLC, which opened a temporary casino at The Meadows in June 2007, then in July 2009 opened a 180,000-square-foot casino – one of the largest gaming facilities on the East Coast.

3. Food and drink for everyone: It could be said that 2016 was the year that Washington County’s food and drink scene fully blossomed, offering something for everyone.

In North Strabane Township’s Street at the Meadows, Buford’s Kitchen opened in the first quarter, bringing southern low-country food (think shrimp and grits and Po’Boy sandwiches) alongside late 2015 entries Markook (Mediterranean/Middle Eastern) and Primanti Brothers (creator of Pittsburgh’s signature fries on sandwiches).

Just up the road, where Racetrack meets Route 19 at Park Place at the Meadowlands, Bourbon Bacon and Beer debuted its self-described offerings of food and drink. Over at Canonsburg Lake, Pittsburgh’s Big Burrito Group drew a big olé! when it brought its popular Mad Mex concept to North Strabane. In South Strabane’s Trinity Point, Texas-based Dickey’s Barbecue Pit established a local presence.

Roadhouse fare was alive and well, with Forty Bar & Grille’s opening in late October on the site of former longtime favorite Club 40 in North Franklin Township, while a remodeled Paci’s Lounge (wings) reopened in Centerville.

Dunkin’ Donuts brought a triple treat, opening stores in South Strabane, North Strabane and McMurray, while Bethel Park’s Bethel Bakery opened a satellite store on Route 19 in North Strabane.

In Washington, following the late-2015 opening of President’s Pub on North Main, two distilleries made their debuts: Red Pump Spirits, offering small batch whiskies and liqueurs, and Liberty Pole Spirits’ Mingo Creek Distillery, with its bourbon, rye and corn whiskies. The distilleries are appropriately equidistant from the David Bradford House, which was ground zero for the Whiskey Rebellion.

Meanwhile, Coal Tipple Brewery’s November opening at Kramer’s Greenhouse and its Raccoon Creek Winery on Steubenville Pike near Burgettstown, marked the site of Washington County’s first microbrewery. Three others are slated to open in 2017: Canonsburg’s Rusty Gold Brewery in January; and Washington Brewing Co. in the city and Four Points BBQ’s microbrewery in Charleroi, both by mid-year.

4. A new alliance: In one of the biggest economic development stories of the year, two successful economic development agencies from the 1960s – the Middle Monongahela Industrial Development Association and the Mon Valley Progress Council – were merged to form a new agency, the Mon Valley Alliance. After the April announcement, the new group in September named Christopher Whitlatch, 43, as its CEO. He formerly managed digital communications for the Pittsburgh Foundation.

The new agency said it would continue to promote MIDA’s industrial development mission, as well as the progress council’s focus on transportation, while adding community projects to its purview. By year’s end, Whitlatch was preparing to release a crowdfunding platform for the community projects, to be followed shortly by four funds focused on community development projects, workforce readiness, start-up businesses and historic preservation.

The new agency said a three-pronged approach would allow it to develop some short-term projects aimed at strengthening Mon Valley communities, while it continued to work on longer-term ones in industrial and transportation.

5. Retail in the works: Retail is changing. Traditional brick-and-mortar stores, including big-box chains, are giving way to online shopping.

Yet there are exceptions, and two are across Route 19 from each other in South Strabane Township. Retail will be going into the former Sharp’s Furniture property, below the Trinity Point shopping complex, and in a building across the busy artery that is under construction in the ever-evolving Old Mill project.

Aspen Dental and Mattress Firm will occupy the building that is mostly completed on the Sharp’s site. It’s near the front of the 3.5-acre lot, where the family business operated for 46 years before closing in August 2015.

Aspen Dental will be new to Washington County; another Mattress Firm store is across the road and up the hill in the Strabane Square shopping center.

A second structure is being built in the back of the Sharp’s property. It will have multiple tenants, possibly retail, but little is known about the possible tenant mix. Summer Ewing of Win Development, the Belleair Beach, Fla.-based developer, did not respond to a recent email. Neither did Bob Gold of the Pittsburgh office of CBRE Group, which is handling leasing.

At the Old Mill, the 10,000-square-foot structure being built behind Chick-fil-A is essentially finished on the outside, not inside. Andy Boyd, senior asset manager for TSG Properties, the St. Louis-based owner of the 104-acre complex, said five businesses will likely go in there, but only one has a lease: a Great Clips salon.

He added, however, “we are very, very close – 30 days probably” from securing leases for the remaining spaces. Boyd said this Dec. 15.