Mayor Ed Gainey will challenge the tax-exempt status of 26 Pittsburgh properties, he said Tuesday, as part of a new legal strategy to address a longtime problem. The list — including a handful of properties owned by UPMC — is the first piece of follow-through on a plan he unveiled in January to root out tax-exempt properties in Pittsburgh that shouldn’t qualify for exemption under Pennsylvania law. 

The plan is at once Gainey’s biggest initiative to bolster the city’s finances and to extract greater support from UPMC. Gainey ran for office promising to make the healthcare giant pay “its fair share,” and city officials have warned that the city’s revenue will need a boost ahead of the end of federal pandemic relief funds next year. 

The 26 challenged properties range from Oakland condominiums with assessed values in the millions to a vacant lot in the North Side assessed at $800.

In all, the 26 properties have an assessed value of about $72 million. If they all were taxable, the city would reap an additional $3.5 million from the owners, the city solicitor said, including back taxes from the past five years — though the owners could appeal the assessments. Going forward, the city would collect more than $580,000 annually if the exemptions are overturned, and the city schools more than $700,000. If the owners defend their exemptions, the process could drag on for years.

Six properties of the 26 are owned by Presbyterian University Health System, a former name for part of UPMC. County records list UPMC’s Downtown headquarters as the mailing address for those properties. All six are listed at the same Forbes Avenue address in Oakland and altogether the owner would owe the city more than $400,000 in annual property taxes if their exemptions were revoked and current assessments stood.

“We are here to protect the taxpayers and make sure that everybody is paying their fair share,” the mayor said at a morning press conference.

The city is challenging the exemptions on six properties affiliated with UPMC, two owned by Carnegie Mellon University, one by the University of Pittsburgh, one by Allegheny General Hospital and a handful of others held by smaller nonprofit entities or private citizens.

A UPMC spokesperson wrote in response to questions that the properties “support UPMC’s charitable mission of serving our patients, members and communities. The City of Pittsburgh is aware of UPMC’s ongoing support and the multitude of our investments in the city, and that it can count on our full participation in fair and equitable programs that include the region’s other major nonprofits.”

PublicSource reached out to other nonprofits but did not receive immediate comment.

Microphones point at Krysia M. Kubiak, Chief Legal Officer and City Solicitor, as she speaks to the media about challenging the tax-exempt status of 26 Pittsburgh properties in a press conference at his office on Tuesday, March 28, 2023, in the City-County Building in Downtown. (Photo by Stephanie Strasburg/PublicSource)
Krysia M. Kubiak, Chief Legal Officer and City Solicitor, speaks to the media about challenging the tax-exempt status of 26 Pittsburgh properties in a press conference at his office on Tuesday, March 28, 2023, in the City-County Building in Downtown. (Photo by Stephanie Strasburg/PublicSource)

Gainey said the list is the result of his staff examining 10% of the city’s tax-exempt property not owned by government or churches. There are around 17,600 tax-exempt parcels within the city.

Gainey’s challenges will be reviewed by the Allegheny County Board of Property Assessment Appeals and Review [BPAAR]. The board’s review process could take from six to nine months, according to its solicitor, David Montgomery. Either the city or the property owner can appeal the board’s decision to the Court of Common Pleas, a process Montgomery said could take a year itself, and the loser there could appeal to the Commonwealth Court. 

A Pennsylvania Supreme Court ruling set a five-pronged test for qualification as a tax-exempt charity, including that an organization must:

  • Advance a charitable purpose
  • Donate a substantial portion of its services
  • Benefit a class of people that are legitimate subjects of charity
  • Relieve the government of some of its burden
  • Operate without seeking private profit.

Gainey said at a January news conference that property owners that meet the five prongs have “earned” their exemption, and “if you fail to meet our constitutional standards, then we will make sure that you are paying your fair share to our city.”

Today’s announcement was Gainey’s first substantial move toward boosting the city’s revenue from nonprofits, and comes more than a year after he was sworn in. Gainey said last year that he held private meetings with UPMC and Highmark officials, but did not disclose the results of those meetings. 

The stakes are high: Almost 20% of Pittsburgh property is privately owned and tax-exempt, according to a report from the city and county controllers, a tax loss of about $50 million annually for the city. The city’s 2023 budget includes $49 million the city received from the federal American Rescue Plan Act — revenue that will end after 2024. The city’s current revenue levels don’t cover its expenses without that infusion, and it’s yet unclear how the city will balance its budget after ARPA.

Adding to the city’s headache: Litigation over how the county calculated property tax bills could result in revenue dropping and even refunds for some homeowners, putting further strain on the city’s budget. 

“We need this money to properly run the city,” Solicitor Krysia Kubiak said in January about the plan to challenge tax exemptions.

The list of properties also includes a University of Pittsburgh parking garage, two properties owned by Carnegie Mellon University and the North Side building that houses a Propel charter school.

A Pitt spokesperson wrote in response to questions that the university is in “active and ongoing” conversations with the mayor, and that “we are confident that the University of Pittsburgh meets the requirements spelled out for tax exempt properties.”

Gainey’s team said seven of the properties are owned by “private citizens,” including one vacant lot assessed at just $800 and another at $1,200.

Local officials listen during a press conference about challenging the tax-exempt status of 26 Pittsburgh properties on Tuesday, March 28, 2023, in the City-County Building in Downtown. From left to right: state Rep. Dan Deasy, Allegheny/Fayette Labor Council President Darrin Kelly, state Rep. Sara Innamorato, Deputy City Controller Rachael Heisler and City Controller Michael Lamb. (Photo by Stephanie Strasburg/PublicSource)

At the Tuesday press conference, Kubiak said the city can seek back taxes for five years for properties whose exemptions are overturned. She said that if the city was successful getting five years of back taxes from each of the challenged properties, it would net $3.5 million.

A court this month shifted the legal landscape of health system tax exemptions. A Commonwealth Court judge revoked the exemption held by a hospital in Montgomery County, and upheld rulings stripping the exemptions from three Chester County hospitals, after determining that Tower Health received exorbitant management fees from those facilities and paid executives based on financial success.

One candidate for Allegheny County executive, Sara Innamorato, said she would take Gainey’s strategy beyond city borders if she is elected this year. 

“I’m running for county executive because we need a leader who works for the people, not for powerful institutions like UPMC,” Innamorato said in a written statement. “That means elevating Mayor Gainey’s review of all tax-exempt properties to the county level.”

PublicSource has examined the relationships between local governments and large nonprofit property owners in its series The Exempt Dilemma.

Editor’s note: This story has been updated to include additional comment.

Charlie Wolfson is PublicSource’s local government reporter and a Report for America corps member. He can be reached at

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Charlie Wolfson is an enterprise reporter for PublicSource, focusing on local government accountability in Pittsburgh and Allegheny County. He is also a Report for America corps member. Charlie aims to...