August Work: On the AWC, the Produce Terminal, and a deal with UPMC.

It may be August, but it sure does not feel like recess!

To differentiate the Julian month from the august dramatist, we will herein adopt the voguish lingo:

The “Augie Willy Center” has of late become a tale of deed covenants and a 25% monetary differential between dueling proposals. Yawn. It is almost enough to make one mutter: might this venture not do better if it were rooted in the historic Hill? Where dude grew up and found so much inspiration? Besides, it seems some passengers are jumping ship.

A few months ago, the Augie Willy story was a heady ferment of a renewed vision, a new corporation and a range of stakeholders. One would find it easer to root for a wholly owned and independent August Wilson Center residing in the Downtown “Cultural District” at the temporary expense of the immediate and total satisfaction of its creditors, if only that sort of promising narrative were still shining through.

Meanwhile, on a topic one neighborhood removed: Hear ye, hear ye!

The Urban Redevelopment Authority has garnered three significant development proposals for the grand old produce terminal in the Strip District! Citizens are invited to consider these plans, separately and together, tomorrow most especially at a Public Meeting!

This probably shall not be the last such meeting. Mayor Bill Peduto is alluding to “significant and good” features in each proposal, and keen on the prospects of blending residential development, retail and history in the five-block long behemoth. How about three parts worth of residential and two parts retail, we ask? Or strike that, and reverse it?

Finally today, we turn to unfinished business: refining our discussions with UPMC aimed at ameliorating public economic anomalies by balancing aggregated nonprofit tax advantages with shrewd public investments-in-lieu-of-taxes, or IILOTs.

First, a CORRECTION: The Comet was erroneous in attributing “gun to the head” rhetoric so confidently to UPMC. It would have been more accurate to attribute the sentiment to the universities, back during the fracas over an ignominiously defeated 1% tuition tax proposal. The Comet regrets how the ill-informed stylistic flourish distracted from a bedrock economic argument animating the post: that the City’s most powerful industries and dominant employers can’t afford to be so stingy with it. And we yearn for a second set of eyes.

Now, we are making progress through a discussion of medical industry IILOTs…

IILOTs from UPMC might, theoretically, help fund another subway line. Let’s not get carried away, but you get the idea.

IILOTs from UPMC might underwrite affordable housing anyplace it might be challenging but strategically important. It would be better if we exploited other means of accomplishing sufficient dignified, accessible, affordable housing — but any up-front sum might ease construction.

IILOTs from UPMC could go into affordable housing with green chazerai. “One of the main arguments for green affordable housing is that a higher upfront cost for construction/renovation can be motivated by a lower operating cost over the life-time of the building, i.e. a lower life-cycle cost,” reads Wikipedia.

IILOTs from UPMC might go into the Year-Round Youth-Plus Employment Program, because a new governmental body will soon possess an unending stream property that would benefit from maintenance.

IILOTs from UPMC might be leveraged to ease the crunch of our contracted obligations to City retirees, aggravated from the economic devastation and mass diaspora between the 50’s and 80’s. Not likely, though — many industrialists still believe that the idea of any guaranteed pensions benefit is hopelessly outdated, and many that government can never be a partner in raising the bar by making greater efficiency and more responsible decision making the New Norm.

That aside, these investments-in-lieu-of-taxes or IILOTs could mean anything!

Hopefully some time within the next year or so, Mayor Peduto and a hologram of UPMC CEO Jeffrey Romoff will come forward jointly in triumphantly announcing the terms of a deal along the lines we have heard. Hopefully the public won’t jump at the first offer. Hopefully we summon appropriate pressure to improve the deal, heat it and beat it, roll it and hone it, until it is of superior quality: a strong and productive accord for UPMC, the City and all its inhabitants.

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And if it doesn’t work out, we can head back to the chalkboard. Hardly any downside!

32 thoughts on “August Work: On the AWC, the Produce Terminal, and a deal with UPMC.

  1. Plans Afoot

    Seems curious that URA head Acklin hasn’t thought of putting URA’s money into rehabbing Augie’s house in the Hill, considering that he spent so many years touting it as part of his non-profit community service enterprise.

    Oh, wait, that was during the climb up the ladder. Now? Nevermind.

    http://www.post-gazette.com/local/city/2012/10/01/August-Wilson-s-residence-could-be-nationally-recognized/stories/201210010207

    http://www.post-gazette.com/local/city/2010/08/16/Plans-afoot-for-August-Wilson-s-home/stories/201008160199

    http://pittsburghcomet.com/2009/06/04/independent-kevin-acklin-gets-it-started-on-massive-scale-video/

    Reply
  2. Anonymous

    I’m happy to know that the options for non profit donations to the city are up for discussion. The was the mayor was channeling Ricky Burgess I thought subsidized housing was a done deal.
    I liked some of the other suggestions mentioned, especially if we can see some relief with the operating budget and get a chance to do some things to lift the whole city for awhile.
    There are some tax payers in this town who feel neglected and don’t have CBGD money to layer on top of operating money.
    City council members mentioned this at a recent meeting. They too want to be included but are always left out. I’m not sure how they would feel if that new money went for subsidized housing again. We just wrapped around Larrimor with millions for new development and housing. Have you seen all the new subsidized housing in the Hill and east end lately?
    Does money in this town ever cross the rivers? At a recent meeting, Burgess mentioned more needs again, to come after vacation. My council person in district 8 said “this will help everyone but district 8 and I’m perfectly happy with that”. I guess paving Ellsworth Ave. was all we needed, because we’re just so fabulously rich. This is what an all democrat town will get you.

    Reply
    1. Bram Reichbaumbramr101 Post author

      My impressions have always been: that CDBG money is made available by the Federal government with the expressed purpose of addressing poverty conditions — not the conditions of the upper working class or the lower (vanishing) middle class, or feelings of being left out. That CDBG’s are an animal of the War on Poverty, and quite legally bound to those statutes. And that “supplanting” other monies with Community Development Block Grants is in at least some cases verboten. I could be wrong though.

      Reply
  3. Anonymous

    No, you’re right. The case was made that a lot of ineligible communities are just a smidge from poverty. Seniors and poor are suffering outside of CDGB. The middle class will vanish from neglect and taxes. It cost a lot of money to live in the city. So, as we continue all of our efforts on the CDGB, the rest of us will us will eventually “vanish”.
    Funny, I remember the mayor just saying that maybe we need to help with other housing, because we will need someone to pay the taxes. WTF

    Reply
    1. Bram Reichbaumbramr101 Post author

      Well, we’ve got to grow both kinds of housing, “market-rate” and “affordable”… and we’ve got to grow both kinds in most zones of the City. The ratio I keep hearing is, 2:1. Like Hollywood actors — when it comes to accepting projects, they’re fond of taking “Two for them and one for you.” I guess there’s still a gap in the market, though.

      There seems to be plenty of opportunities for somewhat more upscale housing: Eastside III and Bakery Square 2 continue to sail. Perhaps as such franchises wrap up their present growth-cycles, those who feel wounded over things like federal CDBG requirements might find some relief.

      My broadest advice is: connect your pitch to a transit vision.

      Reply
  4. Helen Gerhardt

    As a veteran of the Iraq War, I’ve seen how the “investment” of my tax dollars in the military industrial complex has “paid out” to giant corporations, moving our hard-earned, crucial resources from schools, infrastructure, health care, science and technology, sustainability programs, etc., etc. etc.

    If I could choose how my “contributions” were spent In Lieu Of Taxes, I would choose to feed our nation’s children instead of the war machine. Or here on the state and local level, I would also choose to direct my PILOTs to high quality public education, public transit, and affordable housing. But, because I choose to participate in this democracy, my tax dollars are directed by the representatives who win elections.

    But then I’m just a citizen who worked to elect Mayor Bil Peduto to hold UPMC accountable to the same laws I’m subject to. Our Chief of our Executive Branch made a commitment, not to an easy task, not to a slam dunk for easy political points from an electorate that polls showed cared very much about this campaign promise – but instead to what, yes, most likely will be a long, arduous job for committed professionals who know the worth of the long term investment in upholding equitable application of the rule of law.

    But no, not a Quixotic “roll of the dice” – there seem to be solid legal grounds for pursuing the lawsuit, as presented in this diligently researched overview and thoughtful analysis by Alex Zimmerman and Rebecca Nuttall of the Pittsburgh City Paper. Bram, on Twitter you wrote, “Ask the Judge.”

    Wettick wrote that it was “a narrow ruling that does not consider whether UPMC or any of its subsidiaries are charitable organizations.” And City Controller Michael Lamb, for one, contends the matter was largely a “document issue and a filing issue” — problems that, had the city addressed them, “wouldn’t have added significantly to the cost” of pursuing the lawsuit.,

    But no, we’re not just witnessing just a quick surrender in the courtroom, Kevin Acklin is actually talking about partnership with UPMC on how their PILOT will be spent, talk that does indeed seem to emulate the mode of governance practiced by Mayor David Lawrence who worked so closely with RK Mellon, the top-down mode of governance Bill Peduto promised to break with in favor of more truly equitable and inclusive government.

    If our Mayor actually legitimizes their phony nonprofit status by allowing UPMC to choose where they “invest” a fraction of what they owe our community, the evidence of their past behavior suggests that they will direct their dollars as carrots and sticks to further control the shape of development in this city, to extract further massive profit from taxpayers – and to further consolidate their very evident power over all three branches of our government.

    Reply
    1. Bram Reichbaumbramr101 Post author

      The main difference between a “quick surrender in the courtroom” and a “document issue and a filing issue” seems to be, “How much time do you take?” I’m prepared to give it some, largely because of conversations worth having but also because it’d probably a good idea to come back with a clean document and revised approach.

      That’s all I got.

      Reply
      1. Anonymous

        blah blah blah affordable housing. This is one of the most affordable cities in the entire country for housing. Affordable housing is a complete sham mean to enrich the elites by selling guilt about the poor and screwing the middle class. You can find affordable housing, whether for rent or to buy, literally all over the City. Affordable housing destroys neighborhoods while the same east end architects and lawyers and builders make millions constructing and tearing down and constructing and tearing down. What a scam.

      2. Bram Reichbaumbramr101 Post author

        Well, let’s see. Full time minimum wage workers earn about $1200 per month. How many livable apartment spaces can be had in Pittsburgh for about $300-$400 monthly? My impression is, the options are slim and pretty grim until you can spend about $500, and that’s for a 1 BR.

        Lawyers and builders do well under any scenario.

  5. Anonymous

    anon 7:43, I’m in agreement with you. The mayor seems to headed towards wealth redistribution at every turn. It will never be enough. After subsidized housing, he will turn to the next inequity until we are a full blown progressive city. I watched Bill’s career and thought he would be a good mayor. However, I think now it’s because he wanted it so bad. Pittsburgh is an older, somewhat conservative city and the mayor thinks we need to jump in with both feet to a liberal only future.
    He surrounds himself with likeminded progs. and will tax us workers right-out of the city for our own good. His base is eds, meds, hipsters and poverty pimps. To bad if you’re not one of them.
    And another thing, doesn’t UPMC fund the Promise?

    Reply
    1. Bram Reichbaumbramr101 Post author

      UPMC funds the Promise, a charity which doesn’t do anything to address the operating, infrastructure or legacy needs of the City or anyone else. I’m not aware that Bill has floated raising any taxes, beyond making sure that property tax shares after reassessment appeals remain consistent with what Pittsburgh has been using for quite a while now.

      Reply
      1. Anonymous

        Here you go. Point proven. Affordable housing in Pgh is a myth. Just something to sell based on guilt so that we can funnel millions into the pockets of lawyers, builders and architects and planners. If you really want to help poorer communities help them with ownership. Ownership of homes and commercial real estate. “Affordable housing” is just another way of ensuring that the elites continue to own all the real estate. And they get paid to do it. Complete scam.

        http://www.marketwatch.com/story/5-least-and-most-affordable-housing-markets-2014-08-07

    2. MH

      I think all these anonymouses don’t go pseudonymous so they don’t have to worry about contradicting whatever blather they put up in the next comment. This one is nice because it contradicts itself unless people who work in eds and meds are somehow not workers.

      Reply
      1. Anonymous

        bram, you obviously didn’t read very far. Fayette Cty was only referenced in one of those, you know, intro sentences. Pittsburgh itself and its environs are in the top 5 affordable markets in the country. Go to any neighborhood in the City except Shadyside and Sq. Hill and you can find a nice decent house for under $100k.

      2. Bram Reichbaumbramr101 Post author

        The report studied things only on a county-by-county basis. And if it references Fayette County in an introductory sentence about Pittsburgh, it doesn’t look at what we’re talking about.

        A $100 K mortgage is not affordable to persons making less than $35 K per year, even with good credit and light skin. Affordability usually entails paying “rent”. Affordability means no more than 30% of income going into rent. For a full-time minimum wage employee that’s $360 a month. Again, go find a bunch of apartment listings in the City for about $350-$400 per month.

        Not everything we build has to be affordable; not even half of it. But enough has to be. And the only way to do that is through public policy.

  6. Anonymous

    1. Examining the rhetoric that has been wrapped around “Affordable Housing” – and trying to understand and evaluate exactly what this means in practice – is an excellent idea. Anon 7:43 is on to something there. Replacing 60s style project towers with suburbanesque dwellings is the right thing to do, but who benefits the most from this transformation? Do we now have good examples of “mixed housing”? Are market-price owners, and section 8 vouchees indeed occupying these units together to any appreciable degree? And since these efforts all predate the Peduto Administration, where will they pound their stakes into the ground in order to lift the rhetoric out of the anecdotal soil?

    2. It appears to me that the Peduto Administration is backing the City away from the UPMC fight. Is this the right thing to do? Quite possibly. It’s going to cost far too much and victory is anything but assured. It’s a fight better led at the state and federal level. Were they talking about backing away from this leading up to the election? No. As Helen rightly notes, many of their supporters really believe(d) that they would continue the fight. Resuming the PILOT paradigm is better than nothing, but there are far too many ways for non-profit law abusers to thrive and obscure their actions in that paradigm.

    Perhaps both of these issues are early rubber-hits-the-road moments for the new administration – where the 100 Policy Papers and the Transition Reports begin to display furrowed brows…

    Reply
    1. Bram Reichbaumbramr101 Post author

      1. I think Oak Hill is given as one example. 2. Ceasefires and truces don’t end wars, and many of their supporters still trust their generals. 3. We’re absolutely approaching rubber-hits-the-road moments, but I would argue that those (esp. #2) aren’t them. After the wheels leave the ground and we slip the surly bonds of gravity, then we can throw it into Warp speed by solving #2.

      BBI is a good rubber-meets the road moment. Those extra police patrols / “PIRC Nascent” is another. Some decisions on Pens-Hill would be another.

      Reply
  7. Anonymous

    And that’s another thing. I am very skeptical of the term “mixed housing”. It sounds good in theory but I’d like to see some honest numbers. I think that there is more to that term than makes the light of day. I want the success and fail stories in this city.
    I for one don’t buy it. Sounds good and all the Dem’s swoon for a kibbutz moment until they need to feed the beast after we’ve all looked away and moved on to the next, new, shiny kibbutz. Let’s look at all of this housing stuff in relation to the Land Bank also.
    All I want is to know that I’m not being priced out. I’m not ed’s, med’s, hipster, government worker or on welfare. I have a job with a small company in the city, own a small apt. and worry how I’ll pay my bills and taxes. Do you hate me for wanting to have a voice different from yours? To say that I worry I’ll lose my place because of school taxes, property taxes, parking costs? Do you have money left after your bills? I barely do. What do you suggest, that I go and live in subsidized housing and have the URA care for me? Somehow, I don’t like the thought of that “safety net”.
    I would just like to feel a little love too. Just this small woman, born and raised in PGH.(living in the same neighborhood I grew up in). The mayor always wants to talk about his roots, then he gets all green and elite and he don’t sound so much like a Burger, so much like me.
    When did this city get too cool for the room?
    Do you know how many people that you are discounting? We are out there. I guess that I feel that I’m somehow in the way of your blog and the mayor. I live in the east end but before that, the north side. I can’t stand the east end any more. It’s filling up with a bunch of jagoffs.

    Reply
    1. Bram Reichbaumbramr101 Post author

      It sounds like the only thing you’d definitely be interested in would be lower taxes and parking rates. That’s legitimate, but how then do we keep your roads paved and your City services going, if we are not also growing and competing globally? We need to be able to serve “small” Pittsburgh natives like you AND every other type of person out there, at the same time. Otherwise, even our children leave for someplace that values who *they* are.

      I don’t “hate you for wanting to have a different voice” — sincerely, if I knew where I gave such an impression I’d apologize — but it sounds like you bare several of your own hatreds: elites, recipients of welfare, hipsters, gov’t employees, environmentalism, jagoffs. How did you come to feel so threatened by them?

      Reply
    2. Anonymous

      I completely agree with you. Our esteemed mayor and council allies seem hell bent on raising taxes and parking rates without any effort to try and reduce costs and find revenue elsewhere. Where did all the rhetoric go from Peduto? Seems like it went up in smoke along with the UPMC lawsuit. Let me tell you why the UPMC lawsuit was important. If the City won it would have put millions (maybe tens of millions) more into City coffers through tax revenue. And stop with the it would cost too much argument, the City has a darn law department, use it. Or are they incompetent? Now, instead we “might” get some promise for UPMC to put money into a fund to use in affordable housing projects. Projects take money. Which means the City will have to spend more money building these things. And, since they are affordable housing, that means less tax revenue but additional services (water, sewer, roads, police, fire, etc.). Very bad idea. We should have stayed the course with UPMC for the benefit of all tax payers. Your sentiment is spot on and sad. The Mayor cares more about green elites and affordable housing than regular people. Regular old middle class people are not only not welcome, they are being driven out.

      Reply
      1. MH

        I saw somebody with the license plate “GRN DOC”. Maybe that’s a green elite? Or maybe a doctor who specializes in hernia repair. Anyway, I’m slightly offended about being not considered regular old middle class people. I’ve been here ten years and earn a middle class income.

  8. Anonymous

    So after all of the politicking on the Produce Terminal (most of which was simple Luke-flogging, even after he quit his job) – we’re still looking at the high probablility of dramatic modifications to the building. Now that there are three new proposals before the public (ostensibly) to go along with Buncher, have we really gotten anywhere? Buncher, having served admirably as the whipping post earlier, remains the only one to not seek public subsidies. McCaffery wants the most – and there are emerging legit questions about their perfidy in tax avoidance with the Cork Factory. Many of us are still wondering if we’ll be able to walk freely and directly up to the riverfront, hop on a bike or walk a trail, or even actually see the river through all of the new Donzi’s-esque stuff that surely is first development priority. Given the planning, money, and time that went into the Allegheny Riverfront Vision process, are we really still so far away from a good plan here? Is this all just a struggle over who will get the jobs and the public monies, with the actual plans and public experience playing second fiddle? It certainly appears that way, no matter who the mayor is…the only difference now maybe is that Rob Pfaffman is smiling instead of frowning at the cocktail parties.

    Reply
    1. Bram Reichbaumbramr101 Post author

      Buncher got its zoning approved in 2012 over Councilman Peduto’s objections, so your valid apprehension over surrounding “Donzi’s-esque stuff” (?) predates much of this. The URA intends to go into “exclusive negotiations” with one developer for the five-block long Produce Terminal building on Aug. 14th. Mayor here seems determined to try to blend housing and innovative retail — to pursue his 20,000 new residents, to encourage the maker movement and to enjoy taking his time trying to get things right. I have a feeling circumstances equate to something mind-blowing on the 14th.

      Reply
      1. Brian Tucker-Hill

        It is a little of both. The relevant area has been turned into a Specially Planned (SP) District. In an SP District, first you do a Preliminary Land Development Plan, but that is not final planning approval. When you want to actually build something, you need to submit and get approval for a Final Land Development Plan.

        The PLDP is thus a sort of hybrid entity–like zoning, it lays out certain basic rules but allows flexibility within the contours of those rules, and conversely merely complying with the rules does not automatically entail planning approval. On the other hand, a PLDP is typically far more detailed in various respects than zoning, and is intended to take you at least a good half step further toward an actual development.

        Anyway, the Strip SP District now has a PLDP, but as yet no FLDPs.

  9. Brian Tucker-Hill

    On the AWC saga–I don’t want to say I told you so, but . . . while the Foundations and their allied politicians may occasionally have tried to suggest otherwise while working the press and the public, reading the fine print and between the lines, it was always pretty clear that the Foundation plan was primarily about their taking control of the building and its operations, and also that they did not have anything like unified support among local African Americans.

    Reply
  10. Anonymous

    But, Sala deserved the very best, don’t you know? He said that. How about a full accounting and an audit? Where the hell did all the AWC money go? Stop the madness, without the facts. Where is and where was the support without the public money and foundation money?
    I hate this touchy-feelly debate with my money. Show me the numbers and the future, cause the past didn’t work out so well with my hard earned money. A lot of people think (URA, Peduto, City Council…) if they just had more of my money this could all work out. You know, as I type this, I thought, oh, wait, who are those people behind the curtain? Don’t be taking no more from me, I’ve had enough! Stop it now.
    As I re-read this, I see how many times I’ve used the word “money”. Let your attack’s begin Bram. God forbid anyone should want to hold on to a little of it. How dare I, Huh?
    Don’t you know better than me? As always, type from you high horse Bram. Go get all clever and wordy, like you do.

    Reply
    1. Bram Reichbaumbramr101 Post author

      Regardless of our differences about what should happen from here forward, yes, I’ll take that audit / accounting. Thanks for the reminder that is still outstanding. But under the foundation-led plan a new corporation would manage the facility. And I can’t show you the future. I can tell you where I think our common money is most efficiently spent. I don’t think anybody is sending you a tax refund if the AWC folds or moves.

      Reply
      1. Brian Tucker-Hill

        For what it is worth, I agree these are two separate issues: as far as I can tell, the old management is out no matter what happens with the ownership of the facility. The old management (which is really multiple phases of management) should be audited, but the only real relevance to the new management will be in the way of lessons learned.

        Incidentally, although the real audit will be determinative, to me this feels just like any case where a large debt load baffles a management that can’t figure out how to generate enough net revenues to cover that debt. For example, I’ve heard from various people in the local arts community who wanted to do more events at the AWC, but they couldn’t because the AWC charged such large fees. So that looks like a Catch 22–if they filled up with events that didn’t pay enough in fees, they knew they would fall short of the needed revenues, but if they charged the necessary fees they couldn’t fill up with events.

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