Benjamin Franklin said that “in this world, nothing is certain except death and taxes,” but modern American development challenged the founding grandfather’s wisdom through a common practice of tax breaks. Recently, though, the death and rebirth of the Lower Hill District added a new wrinkle: a tax diversion that’s finally poised to start flowing back into the area.
Tax diversions are often used to stimulate development and construction across the country but the Greater Hill Neighborhood Development Fund reinterprets the usual model by netting half of all tax breaks for the use and benefit of residents in that area. The tax diversion agreement established in 2015 applies to the 28-acre Lower Hill District, where the Penguins have exclusive development rights dating back to Pittsburgh Mayor Luke Ravenstahl’s administration.
The fund holds more than $7 million. Out of that, $465,000 is being made available to homeowners in the Greater Hill District with repair needs. Any private homeowner in the neighborhood was free to apply, as 285 households have done.
Greater Hill Neighborhood Development Fund explained
A state tax abatement called Local Economic Revitalization Tax Assistance [LERTA] allows local taxing bodies to create abatements for 10 years post-development on eligible construction.
In the Lower Hill, a LERTA calls for half of the diverted tax revenue to go to the Penguins’ development arm, Pittsburgh Arena Real Estate Development. The other half is to go to the Greater Hill District Neighborhood Reinvestment Fund.
“This is a restorative justice approach. This is doing the right thing,” said Tanika Harris, the Urban Redevelopment Authority [URA] director of communications and community relations. “There’s such a great need for home repair assistance.”
Repairing homes
While the home repair funding is available to anyone in the neighborhood, priority will be given to applicants with incomes at or below 80% of the area median income, among other considerations including how badly the repairs are needed and the demographic makeup of households. With up to $20,000 available for each applicant chosen, the allotted $465,000 would be fully used after 23 homes if each requires the maximum amount.
Priority consideration will be given to applications by households with children ages five and under and households with seniors 62 and over. Further priority consideration will go toward households with disabled individuals
“There are many senior homeowners and they’re limited to a fixed income,” Harris said. “So there’s varying degrees of need.”
Harris said that the identities of the applicants are being hidden from the board members so that there is no chance for preferential treatment in who gets the money.
Harris said that the URA is also working to recruit contractors from the Hill to work on the repairs.
“We want to hire people from the community to do the work,” Harris said. Some are minority- and women-owned businesses, and the URA is working to get them certified as such. “It’s not required but it’s good to have so they could be considered for other URA-related work.”
Who gets what?
Some people involved in the grant process have raised concerns about who gets to decide on how the money is spent going forward.
“It’s a tremendous historic opportunity here. It’s something that should be closely watched on who’s doing what with the money – how it’s being spent,” said Randall Taylor, the equitable development representative of the Hill District Consensus Group, which has a voting member on the fund’s advisory board. Taylor also said that while money for homeowners is welcome, the advisory board should also help renters who make up the majority of Hill residents.
Taylor recommended that some of the future funding go toward creating a tenant-owned housing coop.
He also said that as the board looks to future funding uses, they should consider homes as centers for community and families, not as assets.
“When you get that mentality, that’s the same mentality as house flippers. You can’t look at it as a commodity, it’s a human right,” Taylor said.
The funding can be used for a wide array of projects, making it a flexible tool to address whatever the board decides to focus on.
The board is made up of 12 people with varied interests, as highlighted by sometimes contentious board meetings, which are archived online but do not feature public comment.
“We need a community process so we can see and hear what’s happening. But we’re not getting that,” Taylor said. “We need transparency and democracy. I’d like to see the process opened up to different people.”
No room for delays
Concern for careful management should not trump the funds’ timely distribution, some stakeholders warn.
Releasing funds to homeowners, and the community generally, is “an absolutely necessary first step and it needed to happen a lot sooner than it did and I’m glad it happened when it did,” said Kimberly Ellis, a voting member of the fund board with the Historic Hill Institute. Ellis is also a member of the Penguins-picked development group Buccini/Pollin Group [BPG] that received government approval in May to build a music venue and garage at the former Civic Arena site on the Lower Hill District. BPG is also the developer leading the FNB Tower construction.
Ellis said that the money is needed for homeowners because “many are seniors and many have intergenerational households and they don’t have money for a new house so we need to shore up the houses that they do have.”
But she said the money should have been released sooner.
“It hurt the community cause it was long overdue,” Ellis said. “The monies were deposited by the development team in September 2021 and if I were one of the co-chairs I would have already established a system to release the funds.”
The two co-chairs are City Councilor Daniel Lavelle and Marimba Milliones, head of the Hill Community Development Corp. The board also includes representatives for the mayor and the Allegheny County, the Hill Consensus Group, and others.
Harris noted that this kind of program takes time and must not be rushed so that it could be done in a fair and equitable way that allows the whole community a chance to be involved.
Application efforts and assistance
The fund’s board decided to have the URA process and receive home repair applications between Aug.16 and Sept. 29. During that time, the URA received 285 applications, according to Harris. During the fund’s advisory board meeting on July 20, board and voting member Arbie Bankston of the Hill District Consensus Group calculated that the home repair program would only benefit about 22 people.
During that same meeting, voting board member Rev. Glenn Grayson with the Wesley Center AME Zion Church said that the home repair program was in high demand.
“I’m being stopped in the middle of the street. Halfway in the middle of the sermon,” Grayson said. He urged haste. “I like some of this weight off us.”
Grayson declined to comment for this story.
Harris stressed that while the URA is administering this round of applications, the fund is not a URA program.
“However, the URA staff have been all in and they have worked with advisory board members to create fliers and applications,” Harris said.
To reach a wide number of homeowners, Harris said the URA partnered with all of the neighborhood’s registered community organizations, all of the members of the advisory board, various faith based organizations, the Thelma Lovette YMCA and the Hill District’s Carnegie Library of Pittsburgh branch. They also set up an email and phone line that people could use to get more information.
“The other piece was working with our seniors,” Harris said. “There’s a huge [communication] barrier in the Hill District. Even with the pandemic, they’re not as savvy when it comes to tech.”
To reach the elderly, Harris said members of the URA printed applications and went door to door.
“This was an all-hands-on deck effort,” she said.
Harris said that the program is not a first-come-first-served model and that the URA is currently evaluating each application to decide who will receive home repair assistance.
She also noted that while many of the applicants might not get funding since the program is limited to $465,000, the URA is able to help people connect to other property improvement programs.
“One thing we’ve learned working with applicants, the URA has programs individuals don’t know about so we’ve been able to refer them to other programs like the Small Landlord Fund,” she said.
Looking ahead, Harris said that the funding is “transformative” for an area “which has endured decades of disinvestment and generational poverty.” She said the fund could be important in addressing economic revitalization, preserving cultural heritage and breaking the cycle of poverty, among other areas.
She also noted that going forward the advisory board will need to set up its own apparatus for distributing future rounds of funding.
“We don’t specialize in this. We can’t do this long term,” she said.
But for now, Harris said the URA is fully involved in the process.
“We’re now one step closer to getting some results and getting work done in the Hill and that makes me so damn proud,” she said.
Eric Jankiewicz is PublicSource’s economic development reporter, and can be reached at ericj@publicsource.org or on Twitter @ericjankiewicz.
This story was fact-checked by Erin Yudt.
Greater Hill Neighborhood Development Fund
A state tax abatement called Local Economic Revitalization Tax Assistance [LERTA] allows local taxing bodies to create abatements for 10 years post-development on eligible construction.
In the Lower Hill, a LERTA calls for half of the diverted tax revenue to go to the Penguins’ development arm, Pittsburgh Arena Real Estate Development. The other half is to go to the Greater Hill District Neighborhood Reinvestment Fund.
The fund was created as part of a wider effort that came out of negotiations between residents and stakeholders of the Hill District community. The talks resulted in the Community Collaboration and Implementation Plan to create development in the area that attempts to address earlier development that displaced and disinvested the largely Black neighborhood.
“It still creates cost relief to a developer and rather than having it being 100% benefit to developers like other LERTAs in the city, we decided half should benefit the community,” said Penguins Senior Vice President for Development Craig Dunham, “That’s how we started, capturing benefit from development to the Greater Hill.”
When First National Bank broke ground in the Lower Hill District in 2021 for its new headquarters, the firm contributed a lump sum of $7.1 million under the agreement reached with Hill District advocates and Penguins-led developers. The funding hasn’t been used yet. Eventually, $465,000 will be released to an undetermined number of homeowners in the Greater Hill.
The city’s Urban Redevelopment Authority [URA] will administer the distribution and those selected will be able to get up to $20,000. Homeowners that applied can expect to hear back from the URA by Nov. 3
The home repair funding was approved by an advisory board specially created to control how the funds get spent. Future funding will be decided by the advisory board, though there are no specific plans for how the money will be used.
The board is made up of 12 people, listed below, including seven with voting power.
Co-chairs
- City Councilor Daniel Lavelle
- Marimba Milliones, president and CEO of the Hill Community Development Corp. (voting power)
Members
- Richard Witherspoon, CEO of the Hill District Federal Credit Union (voting power)
- Arbie Bankston, Hill District Consensus Group (voting power)
- Rev. Glenn Grayson Sr., Wesley Center AME Zion Church (voting power)
- Alicia George, Schenley Heights Community Development Program, Inc. (voting power)
- Kimberly C. Ellis, Historic Hill Institute and Buccini/Pollin Group (voting power)
- Jamaal Craig, representing Rep. Aerion A. Abney, 19th Legislative District of Allegheny County
- Dan Bish, representing Allegheny County Executive Rich Fitzgerald
- Lisa Frank, representing Mayor Ed Gainey
- Sala Udin, Pittsburgh Public Schools board
- LaKeisha Wolf, Ujamaa Collective, (voting power)
