Separating Fact from Fiction Part 3: UPMC’s Nonprofit Status

This is the third in a three-part series looking at UPMC’s tax-exempt status.

A look at some misconceptions about UPMC's tax-exempt status:

UPMC has offices in the most expensive real estate in downtown Pittsburgh.

FACT: At the urging of Mayor Ravenstahl, UPMC moved its headquarters to U.S Steel Tower in 2008 to support the revitalization of downtown. The high vacancy rate in the building at that time provided us with the opportunity to rent space for far less than we were paying in Oakland and at very attractive rates compared to other sites in this area. By moving here versus building our own suburban campus, we pay a share of the real estate taxes on the U.S. Steel Tower. This move also freed up space in congested Oakland for use by our clinicians and patients.

UPMC closed Braddock Hospital in a poor community and opened UPMC East in wealthier Monroeville, proving that it is not acting as a true charity.

FACT: Braddock was closed NOT because it was located in a depressed area. UPMC Braddock was closed because most of the citizens in the area chose not to go to there, electing instead to go to other facilities, notably UPMC Shadyside. UPMC worked for 10 years to make Braddock a viable hospital, but by the time of its closure occupancy had been reduced to less than 50 percent, an unsustainable situation for maintaining high-quality care. 

We continue to provide primary care and other much-needed services to the community, prepared the former hospital site for redevelopment by the county, and donated $3 million in additional funds. UPMC still provides care to three-quarters of the low income patients in Allegheny County, far more than any other provider.

The decision to build UPMC East was unrelated to Braddock. It was an effort to serve the needs of patients in the eastern suburbs, many of whom were leaving their communities to come to our hospitals in Oakland and Shadyside. UPMC East now operates near capacity every day, validating our decision to build this facility to better serve our patients.   

Although UPMC has “payment in lieu of taxes” or PILOT programs in place for cities  like Erie and South Fayette, it refuses to talk to the city of Pittsburgh about such an agreement.

FACT: It was UPMC in the early ‘90s that initiated the first PILOT program for the city of Pittsburgh. That was later followed by the Pittsburgh Public Service Fund, in which UPMC was one of the primary contributors among local nonprofits until pledging $100 million to the Pittsburgh Promise scholarship fund.  UPMC has never been approached by the mayor about negotiating a new PILOT agreement.