Peduto Sees Progress, But Urges Patience On OnePGH Initiative

Jan 4, 2019

Pittsburgh Mayor Bill Peduto says the city has never been closer to a sweeping 12-year, multi-million-dollar deal with large nonprofits to fund a social-benefits initiative. But having missed self-imposed deadlines repeatedly last year, he’s not circling any dates on the calendar for announcing it.  

“We're looking at something that is on a scale that is much larger, much more encompassing, and much more of a cooperative effort than any city's undertaken,” he told WESA on Thursday. “It's gonna take time.”

Getting tax-exempt giants like UPMC and area universities to support the city has been a long-cherished goal. In earlier administrations, big nonprofits made “payments in lieu of taxes” – checks sent to the city to help cover operations. But those payments, once more than $5 million a year, have dwindled. And after becoming mayor in 2014, Peduto offered a new approach: having key economic players bypass the city’s general fund, instead contributing directly to needs like affordable housing or pre-K education.  

At various times since 2014, his administration has said a deal could be announced within months or even weeks. In April 2018, Peduto did unveil a list of key needs, such as affordable housing, pre-K education, and water infrastructure that the fund could underwrite.

But Peduto did not identify funding sources at the time. And while he suggested various timelines for a follow-up announcement — variously slated for September, October and then November — it was not forthcoming.

On Thursday, Peduto maintained that considerable progress has been made.

“From where we started, we are like on the 5-yard line. We started with no discussions. Nobody would even have the discussion in order to talk about a payment in lieu of taxes.”

But while he acknowledged that residents were focused on learning how much giants like UPMC would contribute, he said, "We're looking at how do we get those projects done. Not specifically down to the minutiae of where everyone stands around on a stage with a big cardboard check and hands it to the city.”

Some participants might not contribute cash at all, he said, but make in-kind contributions with ventures of their own.

But as WESA reported in December, even some of the people who may be expected to write those checks are uncertain of their role in the venture.

Multiple individuals described an uncomfortable, and in the words of one participant “bizarre,” December meeting with the mayor which focused on OnePGH. Peduto envisions foundations contributing $10 million a year to the fund, out of $55 million in annual revenue. (Another $20 million would come from hospitals, with other support coming from corporations, universities, and other nonprofits.) But some foundations privately told WESA that they already fund such causes, and were unsure of the benefits of doing so through the OnePGH mechanism.

No entity has committed to fund any of the OnePGH intitiatves. In December, Peduto's chief of staff Dan Gilman told WESA that was because the administration hadn’t asked — members wanted to define the venture's priorities and have an open discussion of that vision first.

This week, Peduto cited a couple of hurdles that prevented the city from doing so last year. One was the effort to lure a headquarters for the online retail giant Amazon. The city’s pitch to Amazon included a proposal to divert some of the company's tax obligations to the same causes OnePGH is intended to address. That changed the calculation of how much money would be required for OnePGH efforts, he said.

Shortly after Amazon announced its decision to locate elsewhere in mid-November, Peduto pledged to release more details about OnePGH by the end of the month. This week he said that at the time, “I didn’t realize that we were putting into part of the plan what it would mean if Amazon were to choose Pittsburgh.”

The other setback concerned the need for a nonprofit entity that would oversee the OnePGH initiative, and handle the money involved.

Such an entity requires a 501(c)(3) tax designation, and Peduto has planned to make use of the designation held by the now-moribund Sprout Fund. The Sprout Fund, which sponsored quality-of-life enhancements like a neighborhood mural project, went dark last year. The city hopes to reanimate it, using it as OnePGH’s vehicle rather than creating a new nonprofit entity from scratch. But Peduto said that has taken longer than he expected.

“We didn’t have a deal with the Sprout Fund finalized, and we still don’t,” he said. “Those different parts of the technical part of it — which I should have just assumed that there would be setbacks — have held us back. It’s just been more complicated than what we thought.”

“The next announcement is basically announcing that the 501(c)(3) has been established,” he said.

Peduto says he assumes it will take months to get to that point, and the announcement “possibly could” disclose the dollar support from large nonprofits. But, he said, “We didn’t say, ‘This is what you have to give.’ What we said is, ‘This is what we need to do.’”

“I’m not as concerned [about] when it starts,” he added. “I’m more concerned that we have the commitment of folks to stay on that path for 12 years.”