OnePGH and the future of Pittsburgh

On Thursday, April 29, Mayor Bill Peduto announced that Pittsburgh’s largest nonprofits plan to invest $115 million in his much-discussed OnePGH initiative. Among the commitments was $4 million over the span of five years from Carnegie Mellon, which would be directed towards programming for arts, entrepreneurship, and education as well as administration of the fund.

Large nonprofit institutions in Pittsburgh, like Carnegie Mellon, Highmark, the University of Pittsburgh, and UPMC, have come under criticism in Pittsburgh for their property tax exempt status despite relying on taxpayer-funded resources like road maintenance and police. WESA has estimated around 40 percent of land parcels in Pittsburgh are tax exempt, and city policy has sometimes tried to make up for lost revenue. In 2018, Peduto said that $1.6 billion of the $3 billion he wanted to accomplish the city’s goals would need to come from private or nonprofit sources.

Former Mayor Luke Ravenstahl sued UPMC to challenge their tax exempt status. Peduto dropped the lawsuit when he became mayor in 2014, opting instead to negotiate voluntary contributions from the city’s big nonprofits.

The OnePGH fund, a nonprofit run separately from the city, selects projects based on a bi-annual strategy approved by its board of directors. Peduto announced that, as of yet, no money from the city is going towards OnePGH, and none of OnePGH's funding is intended directly for the city government. OnePGH developed a 141-page prospectus to woo investors, with 12-year timelines of investments aimed at improving Pittsburgh’s resiliency.

The largest share of the $115 million was contributed by UPMC, which promised to invest $40 million in affordable housing in addition to separately funding a downtown homeless shelter and service center with Highmark and the PNC foundation. The University of Pittsburgh’s $8 million commitment over the next five years is planned to go towards community engagement centers, green infrastructure, and administration of OnePGH.

Mayoral candidate Ed Gainey called the commitments “$135M too little, 7 years too late,” criticizing both the timing of the announcement, less than three weeks before the Democratic primary for the mayoral election, and the scale of the plan. “If UPMC paid city and school district taxes, they’d owe our communities $40 million per year,” said Gainey.

One solution that cities have negotiated with large nonprofits is payments in lieu of taxes from nonprofit institutions which can be funneled directly to the city budget. Some critics of OnePGH argue that payments in lieu of taxes would be a more direct way of meeting the city’s needs with donations by giving control of funding to the city government instead of the nonprofit fund. Pittsburgh City Councilwoman Deb Gross, who endorsed Gainey in the election, gave a statement to PublicSource comparing the plan to a “shadow government.” Allegheny County Controller Chelsa Wagner told the Pittsburgh Post-Gazette in 2019 that “The OnePGH concept, to the extent that it has been defined at all, smacks of the outsourcing of government to elite, private interests.”

Peduto told reporters while discussing OnePGH at Carnegie Mellon in 2019 that OnePGH was a preferable alternative to payments in lieu of taxes because money could be directed towards the sustainability and resiliency goals outlined for Pittsburgh in the OnePGH plan instead of the city budget. “If we’re going to address the major issues facing the city over the next 12 years, we need to be able to do it in a way that is outside of the way it was done in the past,” said Peduto.

Pittsburgh City Councilperson Erika Strassburger wrote in an email to The Tartan, “As the Council Member representing part of the East End of Pittsburgh, I can say that many of the benefits the large non-profits bring to Pittsburgh are concentrated in the East End of the City, and I would like to change that.” Strassburger, who represents most of Carnegie Mellon’s campus, as well as parts of Oakland, Point Breeze, Shadyside, and Squirrel Hill, continued, “I think OnePGH starts to distribute the wealth more evenly across the city geographically, and in targeted ways.”

Strassburger, who has endorsed Peduto in the upcoming election, does find that “The best-case scenario would be for the large non-profits to pay property taxes,” but thinks that the city would first need action from the state legislature.

Gainey supports resuming a legal challenge to the nonprofit status of UPMC. Through a spokesperson, Gainey wrote in an email to The Tartan that as “the region's largest employer, largest landholder, and most profitable entity,” UPMC should fall into a different category than small community-based nonprofits and not qualify for tax exemption.

However, Gainey noted that “Universities like Pitt and CMU don't fall neatly into either category,” and would merit discussions of “the types of partnerships, including payments in lieu of taxes, are appropriate to ensure that those institutions are giving their fair share back to the community.”

In an emailed statement, Carnegie Mellon spokesperson Jason Maderer said, “Carnegie Mellon University has a long record of investing in and supporting our community and our region. We share the vision of a city where all of our neighbors have access to opportunity, quality education, clean and green spaces and infrastructure that supports a thriving community. CMU’s participation in the OnePGH partnership is a continuation of our commitment to achieving these goals.”

For some students, making payments in lieu of taxes is a necessary step for Carnegie Mellon in view of the university’s impact on Pittsburgh. Catherine Taipe, a junior who has written in favor of payments in lieu of taxes for The Tartan, wrote in an email to The Tartan that “It is outrageous to see OnePGH being treated as a victory by the Mayor's office when it is rarely the bare minimum.”

“Considering the controversies with the Mon-Oakland Connector and the 2016 Predictive Policing project from Metro21, CMU's impact on Pittsburgh is not entirely positive,” said Taipe. Taipe added, “[Payments in lieu of taxes] are the compromise to paying the millions in taxes the people of Pittsburgh deserve.”

Editor's Note: Nora Mattson served as the Editor-in-Chief of The Tartan while Catherine Taipe was a Staff Writer for The Tartan.