The legacy of Hill House: From settlement house to real estate player to nonprofit in dire straits

The organization, dubbed ‘the heart of the Hill,’ faced major funding challenges for more than a decade. Some efforts to adapt backfired.

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A welcome to the Hill House message is painted on the sidewalk in front of the James F. Henry Hill House Center along Centre Avenue in the Hill District on June 28, 2019. (Photo by Justin Merriman/PublicSource)

A welcome to the Hill House message is painted on the sidewalk in front of the James F. Henry Hill House Center along Centre Avenue in the Hill District on June 28, 2019. (Photo by Justin Merriman/PublicSource)

Over the weekend of Martin Luther King Jr. Day, a frozen water main burst at the Hill House Association’s flagship building on Centre Avenue. The basement flooded in the James F. Henry Hill House Center, often called Hill House Main. Three feet of water pooled for days before anyone noticed.

Leaders of the organization soon learned the building’s antiquated switchboard needed special parts to be ordered before they could restore electricity to the building. Tenants, including a dental clinic and medical clinic, were faced with a choice to wait months to reopen or find a new location.

By April, the Hill House board would vote to dissolve the organization.

For at least one Hill resident, the flooding incident captured part of what led to the end of the organization that called itself “the heart of the Hill.” Amid great financial challenges, leaders’ efforts to bring the Hill House back from the brink only made matters worse at times.

As part of major budget cuts and restructuring over the last decade, the 55-year-old Hill House Association outsourced its maintenance duties to a private firm in late 2014. Hill House nonprofit tenant LaKeisha Wolf recalls the company keeping on one of their former in-house workers at Hill House Main at first. Not long after, the company moved him to a non-Hill House property, and they lost an important source of knowledge about the building.

“When the water main froze and busted, there was nobody here who could’ve prevented the further damage,” said Wolf, executive director of Ujamaa Collective. “All of those things could’ve been prevented at least by this one person.”

The flooding could not have come at a worse time for the Hill House.

A month earlier, in December, local elected officials filed a petition to halt the organization’s plan to sell four of its properties to Pittsburgh-based developer Omicelo. The proposed sale to a for-profit firm did not meet the Hill House’s legal requirements as a charity, the elected officials argued.

The Hill House responded in court by claiming it was carrying some $11.5 million in debt. If it could not go through with a sale of four of its properties immediately, the organization said, it would have to shutter its doors on more than 20 nonprofit tenants and lay off employees.

“Every month that goes by without a deal and additional funding makes the Hill House’s finances worse as debt and unpaid bills continue to accumulate,” the filing read.

On June 27, the Hill House completed its $4.9 million sale of four of its seven buildings to Lawrenceville-based E Properties and the Hill Community Development Corporation.

The sale will help the Hill House board avoid bankruptcy proceedings and allow it to eventually dissolve the organization, the nonprofit’s leaders have said.

“I think many knew for some years now that the Hill House would struggle from time to time,” said Councilman R. Daniel Lavelle, who represents the Hill District. Lavelle is among the local officials who filed the challenge against the deal with Omicelo.

Lavelle pointed to a multimillion-dollar fundraising campaign in the late 2000s that promised to sustain the Hill House for decades to come.

“I'm not sure what ultimately happened to that because obviously 10 years later they collapsed.”

For decades, Hill House emanated pride and belonging in the Hill District community. It was an organization managed and operated largely by black leaders, who served the neighborhood like it was part of an extended family. Throughout its history, the Hill House offered everything from music lessons and concerts to parenting classes and medical care for the young and elderly alike.

LaKeisha Wolf is the executive director of Ujamaa Collective, a Hill House tenant. (Photo by Ryan Loew/PublicSource)

But organization leaders struggled since at least the 2000s to find new ways to fund and restructure an organization built on an outdated social services model, according to interviews with more than a dozen people versed in the organization’s operations in recent decades.

In the last 10 years, the Hill House increased its role as an economic development leader and  financial manager of public dollars tied to development negotiations of the Lower Hill neighborhood, the former site of the Civic Arena.

But its most involved project, Centre Heldman Plaza, which brought a full-service grocery store back to the community for the first time in decades, ended in disaster. It left the already struggling organization exposed to more than $1 million of new debt.

As challenges grew, some felt the Hill House’s presence in the community faded. Familiar faces that had built the trust of residents for years were fewer and farther between.

“The sort of cultural institutional knowledge was lost,” Wolf said of Hill House’s final years. “And that’s like the heartbeat — the blood was no longer pulsing.”

‘...the heartbeat of the community’

Marimba Milliones, president of the Hill Community Development Corporation, remembers taking an entrepreneurship class at the Hill House as a child. “I, my brother and a friend, created a business concept called ‘Carla’s Country Pies,’” she wrote in an email. “We had the most fun testing and tasting recipes and developing a marketing strategy.”

Milliones, like many children from the Hill District, took piano lessons at the Hill House.

“Of course it has a lot of cultural significance because it served as a place where we could have reunions” in large indoor spaces like the Blakey Center and the Elsie H. Hillman Auditorium in the Kaufmann Center, said Kent Bey, president and CEO of Project Love Coalition. “There's not many places in the Hill District that would be able to accommodate such activities.”

Doctors and dentists served the community’s residents under the roof of Hill House Main, the central building the organization built in 1972.

“That dental office there was very important to me, as it was to many others,” Bey said.

Joyce Rogers, a retiree and Hill resident of more than 40 years, said senior services located at the Hill House helped her mother at a critical time in her life.

The Hill House, founded in 1964, is rooted in settlement houses like the Irene Kaufmann Settlement, originally founded in 1911 as a community organization supporting European immigrant families who settled in the Hill.

Jeralyn Smith, 54, a lifelong resident of the Hill District stands along Centre Avenue in the Hill District on July 1, 2019. "I don't know if we've felt or know the impact yet of not having it," she says of the dissolving of the Hill House. (Photo by Justin Merriman/PublicSource)

Jeralyn Smith, 54, a lifelong resident of the Hill District stands along Centre Avenue in the Hill District on July 1, 2019. "I don't know if we've felt or know the impact yet of not having it," she says of the dissolving of the Hill House. (Photo by Justin Merriman/PublicSource)

As white families, largely Jewish, moved to newer developments farther east in Pittsburgh, the 1930s through the 1950s marked the heyday of a segregated but thriving black community in the Hill District. The Ikes, as the settlement house was called, transitioned to a largely black staff serving residents young and old in the surrounding community.

“It was an exciting time, especially for a young teenager,” said Sala Udin, a community leader who has served on Pittsburgh City Council and is on the board of Pittsburgh Public Schools. “There were so many things to do that oftentimes the most difficult decision was, of all these choices, which ones are we going to take advantage of this weekend?”

For his part, Udin belonged to a fraternity organization at the Ikes, Alpha Nu Omega. “Having an organization like the fraternity that we had at the Ikes gave me an organization that provided a sense of fellowship,” he said.

The Hill House was created when the Ikes merged with other settlement houses and Hill-based civic organizations. After a period when the Hill District rivaled Harlem and the South Side of Chicago as one of the preeminent centers of African-American culture and economic vitality, the Hill House served as a crucial center of activity in the neighborhood. At the time, the community was still dealing with the aftermath of the demolition and redevelopment of the Lower Hill, which displaced some 8,000 residents from their homes in the late 1950s.

“It always seemed like a natural institution similar to the way you feel about your church,” Udin said. “Your church always seemed like it’s always been there, and it’s yours, it’s part of the fabric of the community.”

A changing world

After three decades, the Hill House felt the shock of seismic changes to nonprofit funding systems.

More than a decade ago, United Way, at one time an important funder of Hill House, changed the way it disbursed funding and assessed the impact of organizations it funded, according to Kelly McGuire, a spokeswoman for the United Way of Southwestern Pennsylvania.

Now, she said, agencies go through a comprehensive process that includes research to identify critical needs, a request-for-proposal [RFP] process and reviews from a committee of volunteers.

That committee provides “a stringent review of RFP responses, including site visits, interviews, and analysis of financial stability, accountability and measurability,” McGuire wrote in an email.

Long-running social service agencies like the Hill House had to restructure themselves and find ways to adapt to a new system.

The social services and nonprofit industry entered a new period of competition for donor money.

“As the United Way support went away, and that’s non-program-specific support, then you had to get program income,” said Carl Redwood, Jr., board chair of the Hill District Consensus Group and a former employee of the Hill House.

The Hill House pivoted to focusing on programs tied to specific grants, like a new fathers and new mothers program, which Redwood helped implement at the Hill House.

Under Evan Frazier, who took the helm of the Hill House in 2003 after its longtime president James Henry died, the board devised a new real estate development strategy as a way to replace the outside dollars that had kept the organization afloat for 40 years.

The James F. Henry Hill House Center along Centre Avenue in the Hill District on June 28, 2019. (Photo by Justin Merriman/PublicSource)

The James F. Henry Hill House Center along Centre Avenue in the Hill District on June 28, 2019. (Photo by Justin Merriman/PublicSource)

In 2005, Hill House leaders renamed sister nonprofit organization Hill House Housing Development Corp., which had been involved in housing development projects in the area, to the Hill House Economic Development Corporation [EDC].

The same year, the EDC attracted Family Dollar to the site once occupied by the Hill Pharmacy. The store was an early success for the organization, said Richard Witherspoon, CEO and treasurer of the Hill District Federal Credit Union and former Hill House board member.

Based on the success of the venture, according to Witherspoon, Hill House leaders said, “Let’s keep going here. The community's got a Family Dollar and it’s doing well, let’s try something else.”

Community benefits

As the Hill House’s economic development wing continued a real estate strategy through the EDC, the organization took a leading role in the implementation of a historic community benefits agreement between local government officials, the Pittsburgh Penguins and a coalition of Hill District advocates.

Completed in 2008, the agreement was the first of its kind in Pittsburgh. Neighborhood advocates hoped it would ensure that Hill residents would benefit from employment and economic opportunities from the construction of a new arena for the Penguins and the nearby Cambria Suites Hotel.

Hill House became the fiduciary representative for the Hill community in the deal, which included $1 million commitments from both the Urban Redevelopment Authority [URA] and the Penguins to build a grocery store in the neighborhood.

“The Hill House was the only organization in that community that stepped up to try to make sure that we received a grocery store,” said Emma Lucas-Darby, current chair of the Hill House board.

Witherspoon said part of the EDC’s mission was to answer calls from Hill residents for more commercial revitalization and businesses in a Centre Avenue strip that was once teeming with them.

“There was almost pressure from the community in terms of a grocery store and economic development,” Witherspoon said.

Richard Witherspoon, CEO of Hill District Federal Credit Union, stands in front of his business along Centre Avenue in the Hill District on July 1, 2019. (Photo by Justin Merriman/PublicSource)

Richard Witherspoon, CEO of Hill District Federal Credit Union, stands in front of his business along Centre Avenue in the Hill District on July 1, 2019. (Photo by Justin Merriman/PublicSource)

In the late 2000s, the Hill House Association was embarking on an ambitious capital fundraising campaign for the organization, dubbed the “Generations Ahead Capital Campaign.”

Frazier and the Hill House had set a goal of raising $12.5 million that would in part help fund a renovation of some of its properties, including the historic Kaufmann Center.

The campaign raised more than $10 million, but the organization ultimately used a $1.5 million loan to support the Kaufmann Center renovations in 2009, said Scott Lammie, vice-chair of the Hill House board.

“At the end of the day, we came up a couple million dollars short,” said Lammie, who was recruited by Frazier because of his financial background.

The Hill House Association Kaufmann Center along Centre Avenue in the Hill District on June 28, 2019. (Photo by Justin Merriman/PublicSource)

The Hill House Association Kaufmann Center along Centre Avenue in the Hill District on June 28, 2019. (Photo by Justin Merriman/PublicSource)

Frazier, now a vice president at the Highmark Foundation, did not respond to an interview request for this story.

After Frazier’s departure in 2010, the board installed one of its members, Victor Roque, former president of Duquesne Light, on an interim and then permanent basis. He led the organization for about 18 months during a period when the Hill House needed to regain financial momentum.

“During that period, we weren’t successful at raising any more money,” Lammie said.

Brenda Tate, a retired Pittsburgh police officer and Hill resident, had not yet joined the Hill House board with Roque at the helm, but she said the Hill House’s footprint in the community had diminished.

“It was just absolutely quiet, nothing was talked about,” she said.

Roque, now retired, could not be reached for comment through current Hill House leadership.

In 2011, the board chose Roque’s successor, Cheryl Hall-Russell, a nonprofit executive from Indianapolis. According to Tate, she joined an organization in crisis.

“She inherited a bad situation. She really did,” Tate said.

The transition occurred right when construction plans for the Shop ‘N Save and Centre Avenue retail center were getting underway. In April 2011, Roque had signed an agreement with contractors L.S. Brinker Company, based in Detroit, and CM Solutions of Pittsburgh.

The shuttered Shop 'N Save store in Centre Heldman Plaza along Centre Avenue in the Hill District on June 28, 2019. (Photo by Justin Merriman/PublicSource)

The shuttered Shop 'N Save store in Centre Heldman Plaza along Centre Avenue in the Hill District on June 28, 2019. (Photo by Justin Merriman/PublicSource)

But Hill House leaders encountered issues with the original contractors and the engineering plan for the plaza. The general contractor failed to post bond, a financial requirement for construction, Lammie said. The original building plans for the project also proved too frugal to realistically finish the project.

“I became involved directly when it became apparent that the project was kind of veering off course,” Lammie said.

To correct the issues, Lammie and a group of other board members helped to bring on the next lowest bidder on the project Massaro Construction in November 2012. A new building plan added $1 million in construction costs, something the Hill House leaders decided to cover themselves with a loan.

“We thought the risk was greater not to proceed than it would be just to let it disintegrate and suffer the community's response to not fulfill this thing,” Lammie said of the organization’s thinking at the time.

By the end, the social services organization had committed $1.4 million of its own money to the grocery store. Meanwhile, funding for the Hill House’s programming continued to decline.

Debt and downsizing

Between 2012 and 2014, the Hill House Association reported in tax filings that it spent $5 million more than it had brought in.

In those years, Hall-Russell oversaw a massive downsizing of programming. The Hill House reported 284 employees to the IRS in 2011. By 2015, that number had shrunk to 68.

Many of the employees the organization reported before the downsizing were derived from temporary initiatives at the height of implementing the 2008 CBA — a workforce training center that recruited Hill residents for construction and other work related to the Penguins arena, a new hotel and Centre Heldman Plaza.

The sign for the Hill Community Development Corporation is displayed on a building along Centre Avenue in the Hill District on June 28, 2019. (Photo by Justin Merriman/PublicSource)

The sign for the Hill Community Development Corporation is displayed on a building along Centre Avenue in the Hill District on June 28, 2019. (Photo by Justin Merriman/PublicSource)

The Hill House ended its workforce center soon after the construction projects finished. In the same time period, the organization lost a $1 million county contract for senior case management to a regional agency and eliminated an in-house daycare program, Lammie said. A tenant that operated a daycare, Hug Me Tight, absorbed the Hill House’s program.

As a board member from 2010 to 2014, Tate said she felt the Hill House was losing its connection to the community as it tried to deal with crises.

“When I was on the board, I was pretty much one of the only people that were from the community,” she said.

New problems emerged after the opening of the Shop ‘N Save. For one, the grocery store was not generating the business the Hill House and its partners had hoped.

Market studies conducted for the project just a few years before opening anticipated the Penguins would develop the former Civic Arena site in the Lower Hill. The revived area would increase the store’s customer base with the construction of 1,200 new homes, according to the Hill House’s 2012 federal grant application. Seven years later, the Penguins have said they will break ground on a housing development in the Lower Hill this fall.

The Hill House’s market study also predicted residents from surrounding communities, including the Strip District and East End neighborhoods, would contribute to estimated weekly sales of more than $300,000 in its first year.

In Witherspoon’s view, the deal to attract Ross Markets, a company that manages several Shop ‘N Save locations in the Pittsburgh area, was lopsided.

“We got taken the cleaners,” Witherspoon said. “In our zeal to fill our community's need, we sacrificed a lot. We took a lot on.”

The Shop ‘N Save and Centre Heldman Plaza struggled almost immediately, according to Lammie. By the time Shop ‘N Save closed in March, everyone involved had lost investments in the deal, even the store operator, Lammie said.

Centre Heldman Plaza remains in receivership with Dollar Bank. Lavelle said at a community meeting in May that he plans to work with foundations to bring a new grocery store to the property.

An unceremonious end

Hall-Russell ended her run as president and CEO in 2017 — the same year the Hill House Association reported its lowest levels in revenues and expenditures in at least 10 years. Still, the organization’s attempts to get foundation support to help settle debts and rekindle programming did not succeed.

Hall-Russell declined an interview for this story, but wrote in an email, “The Hill House Association and its legacy of community engagement, development, education and critical partnerships was and continues to be important to us all.”

The board decided to bring in one of its members, Pete Mendes, on an interim basis to lead the organization, Lammie said.

“It became clear that the foundations were not going to fund the vision and the scope of activity that was contemplated under Cheryl's leadership,” Lammie said.

Before the Hill House’s major downsizing, the organization relied on some $2 million in annual support from foundations and corporate donors, according to Lammie. That figure has since fallen to $500,000 a year.

Lammie and Lucas-Darby pointed to a spate of major projects in the Hill District like the YMCA, Jeron X. Grayson Community Center and the Energy Innovation Center that major Pittsburgh foundations supported as funding for Hill House waned.

“There were just other services, other mechanisms that were coming of age” in the Hill, Lammie said.

Wheatley and Lavelle both said they felt the Hill House’s failure to adapt to a new donor model is another example of their long-held belief that black-led nonprofit organizations do not receive the same support as their white counterparts.

Lavelle pointed to a study by the Greenlighting Institute that found California-based private foundations in 2004 awarded 12% of their grants to minority-led organizations. Of the more than $1.1 billion of grants awarded the same year, just 4% went to minority-led organizations.

PublicSource reached out to three major foundations* that have supported the Hill House on the organization’s lessening support from foundations and the level of funding for black-led organizations.

The Pittsburgh Foundation gave $81,000 a year to the Hill House between 2012 and 2018 for senior and arts programs, spokesman Doug Root wrote in an email. The Pittsburgh Foundation consistently seeks out organizations that serve and are led by black residents, he said.

“The Pittsburgh Foundation continues to invest in black-led organizations through such programs as Small and Mighty, which, since its inception in 2016, has awarded nearly $879,000 to community-based nonprofits that are run by people who live and work in the communities,” Root wrote.

The Heinz Endowments invested almost $4 million in the Hill House over the last decade, said its spokesman, John Ellis, in a statement. “We recognize the valuable role that the organization has played for individuals and families in the Hill community, and we understand that Hill House’s programming will continue under other community organizations,” he said.

The Hillman Family Foundations declined to comment.

Under Mendes, Lammie and Lucas-Darby said the board envisioned the organization would end its role in neighborhood economic development and responsibilities as a property owner.

Mendes** declined to comment for this story.

In August 2018, Lucas-Darby announced the organization’s plans to sell four of its seven properties the following month to a developer who agreed to preserve the tenant base of nonprofit and county agencies for an amount between $4 and $6 million.

But the proposal drew skepticism.

The Hill House Center sits along Centre Avenue in the Hill District early Friday morning, June 28, 2019. (Photo by Justin Merriman/PublicSource)

The Hill House Center sits along Centre Avenue in the Hill District early Friday morning, June 28, 2019. (Photo by Justin Merriman/PublicSource)

Three local elected officials representing the Hill District area — Lavelle, Wheatley and County Councilman DeWitt Walton — challenged the sale in court, arguing that the sale to a for-profit developer did not meet the organization’s legal status as a charity.

The Hill House countered that its board had brokered the sale with its charitable mission in mind. The organization selected Omicelo in part because the firm would adhere to a set of community-approved development guidelines for the neighborhood.

To keep the organization afloat while a deal was worked out, the elected officials arranged a $500,000 donation to the Hill House from a community fund. The donation was meant to keep operations going until a county judge approved a sale agreement that had gone through a formal bidding process administered by the Urban Redevelopment Authority in February.

In April, Lucas-Darby announced at a community meeting that after the sale of the four properties was carried out, the organization would fold and its board of directors would dissolve.

The Hill House board leaders say they have taken care to ensure that the services in its buildings and their partner organizations will continue without the Hill House Association.

Some tenants have returned to Hill House Main since it reopened in May after the January water main break, though others have opted not to come back.

“There’s strong demand for that space, so there’s not really a concern that the space won’t be utilized or won’t be rented out pretty quickly,” Lammie said.

The two board leaders said several social service agencies are in line to take the Hill House’s remaining contracts and in-house services. Macedonia Family and Community Enrichment Center, a Pittsburgh-based social services organization, took up the Hill House’s contract with the county to provide its senior services programming. FOCUS Pittsburgh, a social services organization led by Rev. Paul Abernathy, is working with the Hill House to absorb the Hill House’s senior living community, the Center for Healthy Adults, on Bedford Avenue. ACH Clear Pathways, a visual and performing arts nonprofit, has moved to the Kaufmann Center.

A view up Centre Avenue in the Hill District on June 26, 2019. (Photo by Justin Merriman/PublicSource)

A view up Centre Avenue in the Hill District on June 26, 2019. (Photo by Justin Merriman/PublicSource)

In June, ACH Clear Pathways announced a $5 million capital campaign to purchase and renovate the building.

Lucas-Darby and Lammie said they believe the board has achieved its goals, even as the Hill House itself plans to dissolve.

“Our mission was to continue to provide essential services and to protect the campus partners that provide a lot of the human services to the Hill District,” Lammie said. “And the form of how that is delivered is probably not relevant in the sense that as long as the mission goals are achieved then I think that's the most important thing for the Hill District at large.”

Still, Hill residents like Rogers mourn the loss of an institution that for decades was overseen and operated by people with deep ties and an intimate understanding of their community.

“It just seems like we’re losing all of our heritage, all of the things that made the Hill the Hill,” she said. “We’ve got to get back what we lost. If they keep taking and taking and taking, there’s going to be nothing left.”

*The Pittsburgh Foundation, The Heinz Endowments and the Hillman Family Foundations provide funding to PublicSource.

** Pete Mendes’ consulting firm does accounting work for PublicSource.

Tom Lisi is PublicSource's Develop PGH reporter. You can reach him at 412-368-6480 or by email at tom@publicsource.org.

Nora Mattson fact-checked this story.

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