Tax-exempt review in Monroeville could yield funds
As home to two hospitals, Monroeville could stand to benefit from Allegheny County Executive Rich Fitzgerald's order to review each tax-exempt property in the county as part of a two-pronged approach to collect money from nonprofit organizations that enjoy tax breaks.
Fitzgerald will enforce a 2007 county ordinance that requires officials to review individual parcels of tax-exempt land at least once every three years to ensure they are used for solely charitable purposes, said spokeswoman Amie Downs.
She said she thinks this will be the first time the ordinance has been enforced.
“We've directed our administrative services director and the Office of Property Assessments to create a process by which we can do a three-year review of all nonprofit, tax-exempt properties,” Downs said.
“We want to do our due diligence to make sure properties that should be on the tax rolls be put back on the tax rolls.”
Monroeville Councilwoman Diane Allison — who has worked for the past two years to revise the tax-exempt status of Forbes Regional Hospital and UPMC East to generate tax revenue for the municipality — applauded Fitzgerald's announcement.
“I think all levels of government should come together to do this,” Allison said.
“I think it's long overdue.”
She said although representatives of local hospitals have expressed understanding with the request from Monroeville officials, they told her they were waiting for a decision at the county or state level that would direct them to pay taxes or fees in lieu of taxes.
Monroeville's economy took a hit when Westinghouse Electric Co. announced the relocation of its Monroeville operations to Cranberry in 2007.
Then, UPMC purchased several pieces of property near the intersection of routes 22 and 48.
Given that the land was at an intersection often described as the second-busiest in the state, the parcels had considerable commercial and tax value.
There had been talks of seeking a casino license for the bulk of property; instead, it went off the tax rolls after UPMC paid more than $24 million to buy eight lots that it consolidated into a tax-exempt home for UPMC East hospital.
For the first three years UPMC owned the land, however, the organization did pay taxes for the property while Allegheny County was processing its request to declare the land tax-exempt.
UPMC paid more than $265,000 to Gateway School District, about $65,000 for the county and $30,000 for Monroeville from 2009 to 2012.
When the county deemed the property tax exempt, UPMC officials declined to be paid back by the school district, municipality and county.
Moving forward, as a way to generate revenue in lieu of taxes, Monroeville Council approved a municipal finance authority in July that can sell tax-exempt bonds on behalf of local hospitals in exchange for payments to the municipality.
The Monroeville Finance Authority — which was created this year at the request of UPMC — approved issuing $357 million in tax-exempt, low-interest bonds on behalf of UPMC, and the municipality has since received an initial payment of $120,000.
Starting next year, UPMC will pay Monroeville $100,000 annually for 29 years, for the bonds.
The Monroeville Finance Authority can issue bonds on behalf of any project of a nonprofit such as hospitals, churches and charities, in exchange for a fee.
Meanwhile, county officials continue to investigate the tax-exempt status of Forbes Regional Hospital, UPMC and other nonprofits in Monroeville and the county.
A representative of Forbes did not return a request for comment in time for this report.
Allegheny County Council held a three-hour public hearing Dec. 5 that was intended to gather public input about UPMC's tax-exempt land.
Dozens spoke out against UPMC's tax exemptions and used the opportunity to talk about labor issues with the health care system.
Spokesman Paul Wood said it's unfair for council to focus only on UPMC
Wood has said UPMC pays taxes on 49 percent of its land in the county.
He said UPMC provides free and reduced care to the community that more than offsets the tax exemptions extended to UPMC.
He added that whatever tax requirements local or state or federal officials apply, UPMC is OK with them as long as they are applied fairly to all nonprofits.
County Councilman John DeFazio, D-Shaler, who chaired the meeting, said he hopes to have more public meetings focusing on other nonprofits and that UPMC just happens to be the largest of them and the first.
If the county chooses to revoke tax-exempt status on a parcel of land, the owner can appeal to the county's Board of Property Assessment and Review, the Board of Viewers and ultimately the courts — similar to appealing a property assessment, Downs said.
Kyle Lawson is a staff writer for Trib Total Media. He can be reached at 412-856-7400, ext. 8755, or firstname.lastname@example.org.