City Council gives first okay to new tax abatement program to convert empty office buildings

PITTSBURGH — Look around Downtown and there are a whole lot of empty buildings.

“We have 30% vacancy in downtown office space and it’s critical that we make sure these buildings succeed in another life,” said City Councilman Boby Wilson.

That number is expected to grow to nearly 50% next year. At this point, 14 buildings are considered high risk for foreclosure, with another 23 heading that way in the next five years. That’s a potential loss of almost $26 million in local real estate taxes.

“If we don’t have that, we can’t provide the services that we want. Paving the roads, picking up the trash keeping the rec centers open,” Wilson said.

That’s why the Pittsburgh City Council voted for the new tax abatement bill on Wednesday morning. Developers will have two options to rehab empty buildings to create new office space, residential living or even hotels with the promise of tax exemption of up to 100% for ten years. That’s if affordable housing is considered in the proposal, if not it drops to a 50% exemption for six years.

It’s a move that Point Park University professor Elaine Luther said cities across the country are considering to essentially survive.

“What could you do instead, and what might happen if you don’t do anything? No one else has really good answers,” Luther said.

Luther told Channel 11 that while it may seem concerning to residents to lose a bulk of the taxes in the city budget, money will still be flowing in just into a different bucket.

“Short term the tax coming from the real estate property will go down but the tax coming from additional jobs, people living there other spending things and when they go to a restaurant or have friends stay in a hotel there are taxes collected from that,” Luther said.

The next step is for City Council is to hold a public hearing and then take a final vote on the program. The hope is to have it all wrapped up and ready for developers to apply by next month.

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