11 Investigates tax dollars being spent by Pittsburgh to rent buildings

11 Investigates tax dollars being spent by Pittsburgh to rent buildings

PITTSBURGH — Fifteen years ago, the city of Pittsburgh gave Phipps Conservatory a building that had previously housed Public Works, and moved that operation to a rented warehouse off the Parkway East.

It was only supposed to last five years.

Now, the city has paid a total of $1.2 million in rent for a building valued at $400,000.

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“We've inherited it, but it's a big mistake,” said Dan Gilman, chief of staff for Mayor Bill Peduto. “I think, unfortunately, like a lot of Pittsburgh's financial history, we made decisions at the time and it obviously predates me and predates the mayor, but it was a time where finances were tight and the easy thing to do was pay as little as you can now.”

After we spoke with Gilman, the city met with the landlord. They couldn't reach an agreement, so the city is moving out, relocating public works several miles away to a substation in Hazelwood.

“We were very good tenants and we tried to work out a swap deal and they didn't want a swap deal,” said Guy Costa, the city’s chief operations officer. “It is what it is. and we are going to move on.”

Costa says the city will eventually build a new facility.

A Target 11 investigation discovered that the city rents at least eight properties at a cost of $2.3 million per year.  The most expensive: Bureau of Police headquarters on Western Avenue, where the rent is $1.5 million per year.

Since moving in in 2002, the city has paid $21.8 million to use a property valued at $6 million.

“The easy solution was, we will pay rent, it's such a small hit now. Over 10, 15, 20, 26 years, clearly not only have you spent more than you would have spent, but you have nothing to show for it,” Gilman said.

The city is also paying the Community College of Allegheny County $2.1 million over three years to rent a building for police training.

Councilwoman Theresa Kail-Smith voted against that deal – she wanted to use a closed school building.

“We had talked about other sites in our district in a different building,” she said. “We had talked about the possibility of a school, other schools, and so I voted ‘no’ at that time because I felt the money would be better spent instead of paying rent.”

Gilman defended the CCAC rent.

“I think it's justified and it’s smart,” he said.

He says the city didn't have the capacity on Washington Boulevard to train all of the new police officers. He says it's a short-term lease, and plans are to build a new training facility and a new police headquarters in the near future, getting out from under the costly rents.


“This is another example of a legacy cost that modern city government has inherited,” he said. “It takes time to dig out from under, but we certainly don't want to be in the business of being a tenant. That is not good government.”

Channel 11 did reach out to the attorney for the landlord who owns the Public Works warehouse and he declined to comment.

Costa says city services like plowing and salting won't be affected because they are relocating about two miles away.