Braddock's long fiscal struggle hits roadblock

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Financially troubled Braddock was well on its way out of state-mandated fiscal supervision until the University of Pittsburgh Medical Center closed its hospital in the borough last month.

"That changed everything," said Joseph Hohman, executive director of Resource Development and Management Inc., the state-appointed financial recovery coordinator for Braddock and other Mon Valley towns.

"We had envisioned that at some point in 2010, somewhere mid-year, we were going to seriously reassess whether Braddock should remain under Act 47, but that was before UPMC made its announcement in October," said Mr. Hohman.

Braddock was one of the first municipalities to enroll under Act 47, the state program for financially distressed towns, some 23 years ago. With an annual budget of about $1.7 million, Braddock has made "tremendous improvement" in recent years in balancing its finances, specifically in pursuing companies with delinquent business privilege taxes, said Mr. Hohman.

Act 47 provides financially distressed communities with a recovery plan, which includes a coordinator and special grants and loans to help municipalities deal with the devastation of losing major income revenue generators.

In Braddock, once a thriving small municipality with mom and pop shops, restaurants and movie theaters, the devastation started with the fall of the steel industry, middle-class flight, and the growth of suburbs and commercial retail in places like Monroeville.

Through it all, however, -- the blight, the crime, the poverty, -- Braddock persevered, Mr. Hohman said, partly because it had a vibrant community hospital.

For one thing, the borough collected about $34,000 annually in wage taxes paid by UPMC employees who lived in Braddock.

"UPMC Braddock was a very important asset for this community's recovery. It might not seem like it, but to have a first-rate emergency service medical facility like Braddock had meant a lot for people who spend their time thinking about how to rebuild this community," said Mr. Hohman.

Now, it might be a tall order for Braddock "to even think about coming out of Act 47 status this year," he added.

Three months after announcing it could not continue to operate the hospital at a loss of between $4 million and $12 million annually, UPMC closed its Braddock facility on Jan. 31.

Since then, the hospital has announced it will tear down the building, possibly as early as June, to allow Allegheny County to put together a redevelopment plan, which would see a private developer build a massive office complex on the site.

But the question of what happens next -- for both the finances of Braddock and the redevelopment of the hospital site -- still hangs in the balance as county officials, borough leaders and community activists cannot agree.

Faced with the reality that UPMC officials would not budge in their plans to close the hospital, county Executive Dan Onorato contends he shifted his objective from saving the hospital for the community to crafting a redevelopment plan that would ensure expanded social services and community investment in Braddock.

And so, he proposed a plan that would be driven by a private developer.

UPMC would pay about $5 million to tear down the building, and the county would market the site for a $24 million complex with housing for senior citizens, space for doctors' offices and classrooms for job training offered through the Community College of Allegheny County. Unlike a hospital, the complex would be subject to borough property taxes.

To that end, developer Ralph Falbo of the Pittsburgh firm Ralph A. Falbo Inc., said he and partners Pennrose GP, LLC of Philadelphia, will make a bid on the site, if and when the county puts out a request for proposals.

"I think it is a very good plan. We have to realize that the hospital is gone. What [Mr. Onorato] is proposing, I think, will make a difference in this community," said Mr. Falbo, who is set to open a four-story, 53-unit senior citizen housing apartment building adjacent to the former hospital building.

The $13.1 million project, which is slated to open on March 15, was funded by $1.5 million in a Pennsylvania Housing Finance Agency loan and $1.3 million in other county and state economic development loans, among others, said Mr. Falbo.

As part of the redevelopment plan Mr. Onorato presented, UPMC would also make $90,000 payments in lieu of wage taxes to Braddock for five years.

Braddock Mayor John Fetterman who initially fought to keep the hospital open, said he saw the redevelopment proposal "the most realistic option," that would make the best of a bad situation.

But borough council members rejected Mr. Onorato's plan.

Council President Jesse Brown and Councilwoman Tina Doose blasted the proposal as "outrageous and an insult" to Braddock residents, saying they prefer a hospital to a business center with complimentary housing.

Borough council last month voted 5-0 to override Mr. Fetterman's veto of a bill to raise taxes to make up for the revenue the borough would lose in wage taxes from the closure of the hospital.

What is more, they said, the county and UPMC never really tried to recruit another health care provider to take over the facility and operate it as a hospital. They also claim that UPMC and the county are rushing to tear down the building to deny the borough any chance another health care provider would run it as a hospital.

But in a report detailing their study of all the possible reuses of the former hospital, Jackson Clark Partners -- the Pittsburgh consulting group that the county hired to analyze its options in Braddock -- considered five scenarios under which the building could be re-used without tearing it down and concluded none of them are viable.

Karamagi Rujumba: or 412-263-1719.


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