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South Fayette staff recommends Children's Hospital proposal for old theater property

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Thursday, March 15, 2012

UPMC Children's Hospital may have bid less than a developer for 2.6 acres of township-owned land in South Fayette, but the hospital's proposal for an outpatient care center and physicians' offices would bring in more taxes and fees than a shopping center, township staff said last night.

UPMC bid $1.65 million for part of the former Star City theater property, compared to the $1.68 million proposal by Langholz Wilson Ellis subsidiary 1772 Inc. But interim Township Manager Marshall Bond said the outpatient center would likely generate about $30,000 more in taxes and fees over its first five years.

Although UPMC is nonprofit, its bid guaranteed that at least 50 percent of the development would be taxable. With an estimated $18.5 million worth of development, even half of the Children's Hospital proposal would be worth more in taxes than 1772's $7.15 million proposal, Bond said.

After factoring in issues such as the likely changes in earned income taxes, local services taxes, sales taxes and building permit fees, the UPMC proposal came out ahead despite being the lower bidder, Bond said.

Children's wants to relocate its Bethel Park offices to larger quarters in South Fayette.

His analysis didn't account for an additional $100,000 in UPMC's bid to be donated for South Fayette's proposed $7 million conversion of the movie theater into a recreation, community and government center. The township cannot guarantee it would move forward on the project within the deadline in UPMC's bid.

Barring any major questions or concerns, the township commissioners will vote on accepting one of the bids on Wednesday.

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