Pittsburgh, UPMC Drop Lawsuits, to Discuss PILOTs

The City of Pittsburgh and the , the largest non-governmental employer in Pennsylvania, have dropped lawsuits aimed at each other, the reports.

In 2013, then-Mayor Luke Ravenstahl filed suit against UPMC seeking to strip the healthcare organization, the largest property owner in Allegheny County, of its exempt status, which relieves it of having to pay property taxes to the city. In turn, UPMC filed a federal lawsuit against the city alleging that it was unfairly singled out in violation of its rights to due process.

Since his election last fall, Pittsburgh mayor Bill Peduto has met with UPMC officials on numerous occasions to work out how the organization might contribute more to the city budget; if it were a for-profit, UPMC would owe upward of $20 million a year in property taxes. The discussions have been complicated by the fact that UPMC has been accused by critics of awarding excessive compensation to its executives and retaliating against employees' efforts to unionize.

After a judge dismissed the city's suit in June on the grounds it erred in suing UPMC itself rather than the subsidiary organizations that are the actual employers of the organization's sixty-two thousand employees, Peduto decided last week not to pursue the legal option any further. This week, UPMC dropped its lawsuit.

Peduto told the Post-Gazette that future discussions with UPMC would focus not only on payments in lieu of taxes but also on "other opportunities to really become a good neighbor," which could include the provision of affordable housing, job training, and youth programs. "That's where the conversations are headed and that’s where they’ve been headed," Peduto said. "[We] decided, let's have this conversation for the benefit of Pittsburgh."

Robert Zullo. "." Pittsburgh Post-Gazette 07/29/2014.