Mayor Ed Gainey thought he had a deal with UPMC early last year that would have made good on a major campaign promise and brought a much-needed flow of cash into Pittsburgh’s coffers.
He said he left a Feb. 14, 2024 meeting with senior UPMC officials thinking the healthcare giant had just committed to paying the city $12.5 million annually for 10 years — an unprecedented commitment from UPMC, which is the city’s largest owner of tax-exempt property.
But the deal quickly fell apart, Gainey said, when a new wrinkle was added: The sum was to be split by the city and Allegheny County. Gainey balked because county officials had not been involved in the talks up to that point.
“It is not my job to negotiate on behalf of the county,” Gainey said in an interview. “I thought the deal was for the city. County Executive Sara Innamorato is perfectly competent to be able to negotiate her own deal. There’s no way that I was going to take a deal and she had never been at the table. That would be wrong … and that’s not the deal that we had earlier that day.”
Contradicting Gainey, UPMC spokesperson Paul Wood said in an email Wednesday that “There has never been a deal on the table. … There have been lots of ‘asks’ but there has never been a deal.” Wood reiterated a longstanding UPMC position that it would participate in programs that include the region’s other major nonprofits.
Gainey described the negotiations, which have not been reported previously, during an interview with PublicSource Wednesday. A spokesperson for County Executive Sara Innamorato said that while Innamorato was not involved in any of the talks Gainey described, the account Gainey shared Wednesday broadly matches her understanding of what happened.
The disclosure comes as Gainey is locked in a tough re-election campaign ahead of May primaries and lacks any payment deal with major nonprofits.
Pittsburgh leaders have long failed to attract payments from nonprofits. How did a smaller city lock in $220 million?
His predecessor, Bill Peduto, sought a grand bargain with multiple nonprofits and fell short of that mark, but left office tallying a variety of projects and contributions backed by large tax-exempt entities. In the early 2000s, Mayor Tom Murphy engineered the multi-year Pittsburgh Public Service Fund, in which more than 100 nonprofit entities made contributions totaling around $5 million a year.
Gainey said the funds contemplated in his negotiation with UPMC would have been controlled by a five-member board, with four members appointed by Gainey and one member appointed by UPMC CEO Leslie Davis.
“I had no problem with that, I agreed to that deal,” Gainey said.
The episode, per Gainey’s description, was the closest the mayor has come to fulfilling one of the main promises from his 2021 campaign — to make major nonprofits such as UPMC “pay their fair share” to fund city services.
He has little to show for his efforts to get major nonprofits to contribute more. A sprawling legal campaign to challenge tax exemptions on individual properties has netted $294,000 for the city, compared to $247,000 the city has paid in related legal fees, Gainey said.
Gainey touted a commitment from Highmark in a January press release, but the agreement includes no dollar figures or timeline and merely says that the health care company will contribute if the city’s other major nonprofits make proportional commitments.
The proposed deal between Gainey and UPMC never resurfaced, Gainey said, despite meetings in summer and fall of 2024. Gainey said he would not readily accept a split of the $12.5 million figure that was discussed last year.
“I’m asking about our public safety,” Gainey said. “I’m asking about our police. Our fire, EMS. Our roads, our bridges. I believe that $12.5 million is good for just the city.”
Charlie Wolfson is PublicSource’s local government reporter. He can be reached at charlie@publicsource.org.
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