Mayor Gainey asked Gov. Shapiro to intervene in talks with UPMC over tax-exempt status, sources say

PITTSBURGH — As Mayor Ed Gainey and the city file suit against UPMC and others challenging their tax-exempt status, 11 Investigates has learned exclusively that the mayor asked Gov. Josh Shapiro to intervene.

11 Investigates has learned that the Governor orchestrated a deal with UPMC and some of the other nonprofits that would pay the city more money than ever before. UPMC had agreed to pay the city $40 million under a deal struck by the previous administration, but the Gainey administration discontinued that agreement.

The Governor’s office declined to comment. Multiple sources tell Chief Investigator Rick Earle that Shapiro orchestrated the deal back in the fall, but the Gainey administration nixed the deal because it did not include an agreement from UPMC to allow the SEIU to unionize UPMC employees.

11 Investigates reached out to the mayor’s office and UPMC as well as some of the other nonprofits, including Allegheny Health Network.

Last month, the mayor announced plans to challenge the tax-exempt status of some properties owned by UPMC, AHN and some other non-profits. The mayor claims that the properties are not for purely charitable purposes and therefore should pay property taxes.

It’s the second round of lawsuits filed by Gainey’s administration. The first time around, the city challenged 27 properties and won 12 of those cases. It added $100,000 in tax revenue annually. The efforts are costing the city at least $400,000 in outside legal fees.

UPMC VP & Chief Communications Officer Paul Wood provided the following statement to 11 Investigates:

“The vibrancy of Pittsburgh – as well as all the communities we serve throughout the Commonwealth – is of utmost importance to UPMC. UPMC has long been committed to being a great neighbor, a trusted resource for health care, and a creator of well-paying jobs. We are proud of our leadership role as a key economic engine for the City, with more than 18,000 employees choosing to work and live within the City. The issue remains the same as it’s been for over two years… the mayor knows he has UPMC’s commitment to participate in a program that’s fair and equitable as long as it includes the other “Big 5″ nonprofits.”

The “Big 5″ refers to UPMC, Allegheny Health Network, the University of Pittsburgh, Carnegie Mellon University and Duquesne University.

Gainey’s Communications Director Maria Montano provided the following response to 11 Investigates: “The mayor continues to meet with our large non-profits in Pittsburgh about a potential for a PILOT with the City of Pittsburgh, however, we have no desire to negotiate through the media. It is no secret that the mayor has long been a supporter of workers in the largest industry in our city having the right to form a union without intimidation. I can also say that the mayor has never walked away from, or turned down, a potential PILOT agreement over unionization. We look forward to continued conversations with our non-profit partners about ensuring that everyone pays their fair share.”

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