Penn Hills Council votes to take proposals from potential tenants for William McKinley Community Center

Penn Hills is seeking a tenant – or, under the right circumstances, a buyer – for the municipal-owned William McKinley Community Center on Center Avenue.

Penn Hills has owned the property since 1989. For more than 30 years, the building has been leased free of charge to a nonprofit called ““William McKinley Citizens Center,” which offers programming and a meeting place for seniors and children. There is also a day care that sublets the building from the nonprofit.

Seeking a paying tenant for the building is council’s latest effort to generate revenue for a municipality that has consistently faltered to present balanced spending plans.

But this latest move was not unanimous — and it came with harsh words from Mayor Pauline Calabrese.

Council narrowly approved, with a 3-2 vote, the issuance of a Request for Proposals during its Sept. 21 meeting. Calabrese and Councilman Frank Pecora dissented.

“I think it’s a shame that we’re reducing a piece of real estate that’s such a very, very vital part of our community and yet we have the arrogance to vote on this without any public comment from the community,” said Calabrese.

The vote happened after Pecora’s motion to table the issue failed. He said he wanted council to host a public hearing on the matter before actively searching for a tenant.

“The public should be able to speak their voices before we just lease it out to somebody,” he said.

He said if other council members are worried about bringing in revenue to the municipality, they should advocate selling the property, which he said is worth $6 million.

Allegheny County real estate records show the property’s value is around $2.2 million. The municipality has owned the building, which sits on 5.5 acres near the Penn Hills and Verona border.

According to the Request for Proposals (RFP) document, Penn Hills is seeking a tenant to rent out the entire facility and to manage the property, which is located at 1110 Center Avenue in Penn Hills. But the municipality said it would be open to selling it if the organization shows it can offer adequate programming to the municipality.

Over the next five years, the property is to receive $130,000 in Community Development Block Grant allocations, according to the municipality’s five-year capital improvement program. The municipality will also allocate a $10,000 yearly subsidy to the facility over the next five years for a total of $50,000.

A similar RFP document was issued in February, which sought a tenant for the Penn Hills Multi-Purpose Center at 2025 Lincoln Road. Council voted 3-2 in July to approve a two-year lease agreement between Penn Hills and Ms. M’s Happy Tots Day Care for $2,500 a month.

Calabrese and Pecora dissented then, too. At the time, Calabrese said she did not like the wording of the lease. She said she wanted the building to be leased out to two entities instead of one.

Petrucci said the buildings have not been producing revenue for the municipality. Seeking tenants for the buildings is one way to collect consistent revenue – no matter how seemingly little it is.

“The only people making money on this deal are the people leasing the properties for zero money,” he said.

Petrucci said he inspected tax records for “William McKinley Citizens Center,” the organization that currently operates out of the building.

“There’s a lot of cash going through this building,” he said. He said the organization has reported about $50,000 in revenue per year since 2008.

Tax records available through ProPublica.com show the nonprofit has brought in around $50,000 in revenue each year, but has never netted more than $14,000 after paying utilities and other operating expenses. The website lists tax records from 2002 through 2013.

“And I want to make perfectly clear that we’re all volunteers,” said Nancy Lobaugh, president of the William McKinley Citizens Center nonprofit. “No one gets paid. It’s been run by a board for the last 39 years. There’s no administrative pay to anyone.”

According to a 2013 tax filing, the nonprofit’s net income was $2,375 after paying expenses. It was then transferred into the organization’s fund balance or “net assets,” which in the 2013 tax filing sat at nearly $95,000. Tax documents show no money being paid to its four officers.

The organization currently sublets the building to a number of organizations, including the Allegheny Intermediate Unit, a day care and the Penn Hills Midget Football Association, Lobaugh said. She said the center also hosts fundraisers there throughout the year and other programs for the community.

She said she was surprised at council’s action to seek a tenant or buyer. Lobaugh declined to comment on whether the organization plans to submit a proposal to lease the building from the municipality.

The RFP document for the McKinley center does not say how much the municipality would charge to rent the building.

“Any rents will depend on the financial viability of the programs offered, and financial strength of the tenant and its programs, based on the financial data that is shared with the municipality by the tenant,” the document reads.

There will be a “mandatory site tour and Q&A session” from 11 a.m. to noon Nov. 2. All proposals are due by Nov. 6. They must be mailed or hand delivered, the RFP document states.