Revitalizing Pittsburgh: Downtown LERTA Program Passes in Landmark Collaboration Among Pittsburgh School District, Allegheny County, and City of Pittsburgh

LERTA Helps Incentivize the Next Iteration of Downtown as a Community with More Residential and Mixed-Use Properties

Pittsburgh – February 21, 2024 – Following a landmark decision by the County Council last night, we are delighted to announce a significant advancement in the joint effort to reinvigorate downtown Pittsburgh. The passage of the Downtown LERTA (Local Economic Revitalization Tax Assistance) program by the County Council marks a pivotal moment, solidifying the commitment of all three taxing bodies – the Pittsburgh School District, Allegheny County, and the City of Pittsburgh – to collaborate and propel the revitalization of our city center forward. This innovative initiative is designed as a regional incentive to stabilize the tax body and prevent downtown’s economic downturn. The tax abatement incentivizes individuals and entities that contribute to affordable housing or job creation within downtown Pittsburgh.

“I thank the members of county council for rallying around the passage of a tool that will assist in helping convert struggling office buildings into vibrant residential and mixed-use spaces downtown. Downtown Pittsburgh is the economic engine of southwestern Pennsylvania, and I — as the leader of this County — understand the urgency with which we have to act to secure a bright future that we can all be a part of. To ensure we can create a more inclusive and accessible downtown for all, this program mandates affordable housing and job requirements to take advantage of the tax abatement,” said County Executive Sara Innamorato.

"I am thrilled to see the Downtown LERTA program move forward with such strong support from the County Council and our partners. This initiative demonstrates our collective commitment to fostering economic growth and revitalizing our downtown core. By working together across taxing bodies, we are breaking down silos and laying the foundation for a more interconnected and prosperous Pittsburgh. This collaborative approach is crucial, as it ensures that our efforts are aligned and coordinated, maximizing the impact for our community. I also commend the Urban Redevelopment Authority (URA) for their leadership in facilitating this collaborative effort. Together, we are forging a path towards a more prosperous and dynamic Pittsburgh,” said Mayor Ed Gainey.

Superintendent Wayne N Walters emphasized the alignment of the City’s vitality with the success of Pittsburgh Public Schools and said, “Our commitment is to ensure that every student has access to high-quality learning experiences and resources that support their growth and development. The options and opportunities provided in our schools must align to the future of our region, and a revitalized Downtown, where Pittsburgh families, students, and businesses can reside and thrive, is integral to shaping that future.”

URA Executive Director Susheela Nemani-Stanger stated, “This effort provides for a robust regional economic stimulus package. The three taxing bodies – the City of Pittsburgh, Pittsburgh Public Schools, and Allegheny County - have been stellar partners in spurring the creation of affordable housing, new jobs, and new investment throughout the city that just isn’t possible otherwise.”

Downtown is the economic hub and symbolic heart of the Pittsburgh region. With the challenges posed by the COVID-19 pandemic and shifting demand for office space, downtown faces unique vulnerabilities. To address these challenges and stimulate new opportunities in housing and job creation, the URA structured the 10-year Downtown Tax Abatement Program. The Downtown Tax Abatement Program aims to expand the existing City of Pittsburgh LERTA and Enhanced LERTA program, making it accessible across all three taxing bodies. This comprehensive initiative combines a robust local incentive pledge with the Downtown Conversion Program.

Key Features of the Downtown LERTA Program:

1. Application Window: The program offers a three-year application window, allowing the 10-year abatement term to commence after the application is approved.
   
   
2. Annual Tax Abatements: Participants can enjoy annual tax abatements of up to $250,000 per taxing body for each of the 10 years of the program. The existing taxes are not abated.
   
   
3. Eligibility Criteria: Eligibility is limited to those who create at least one of the following:
   
   
   • A commercial residential development with at least 10% of total residential units affordable to and occupied by households earning at or below 50% of the Area Median Income (AMI), or
     
     
   • A commercial residential development with at least 60% of total residential units affordable to and occupied by households earning at or below 80% of AMI, or
     
     
   • Commercial and industrial developments that increase the net number of full-time equivalent positions by at least 50 jobs.
     
     
4. Tax Relief: Achieving any of the eligibility outcomes provides tax relief of up to $250,000 per taxing body for 10 years.
   
   

The amount of real estate tax subject to abatement is calculated based on the value of improvements created by each project. For instance, if a property’s value increases from $1 million to $3 million after redevelopment, the value of improvements is $2 million, subject to the real estate tax abatement program, with tax relief capped at $250,000 per taxing body.

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