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House Speaker Turzai’s lawsuit seeks to stop county Redevelopment Authority from tapping fund

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On the same day that the National Aviary, the Jewish Federation of Greater Pittsburgh, five other nonprofit organizations and eight municipalities were approved to get $1.9 million in grants, officials learned that receipt of the money will be postponed indefinitely because of a lawsuit filed by state House Speaker Mike Turzai, R-Bradford Woods.

The Redevelopment Authority of Allegheny County at a monthly meeting on Friday approved funding for 15 projects, with the money coming from the Community Infrastructure and Tourism Fund.

But following a closed-door executive session on Friday, the board’s solicitor, Stephen Papernick, said the Redevelopment Authority would not be able to move forward with contracts for the projects because of Mr. Turzai’s suit, which the agency learned about late Thursday afternoon.

Mr. Turzai this week sued Gov. Tom Wolf, other state officials, the Redevelopment Authority of Allegheny County and the Commonwealth Financing Authority, seeking a court judgment that the county’s quasi-independent development arm was improperly spending money that should have been turned over to a state agency.

The complaint filed in Commonwealth Court focuses on the Community Infrastructure and Tourism Fund (CITF) and the Gaming Economic Development Fund (GEDF), two development pots filled with a cut of 5.5% of gross terminal revenues on slot machines in the county.

They have long been disbursed by the county Redevelopment Authority, with a five-member board serving five-year terms, appointed by the county executive, currently Rich Fitzgerald, a Democrat.

According to the complaint, a 2017 amendment to the gaming law, which took effect Jan. 1, 2018, shifted the responsibility for distribution of the funds to the state’s Commonwealth Financing Authority. But the complaint says that the governor and the other defendants have taken the position that the amendments do not take effect until 2020.

Under that interpretation, according to the complaint, the county authority “continues to enter into agreements between themselves or with Allegheny County in which RAAC relies upon the grant programs as they operated prior to the 2017 amendments.” In other words, the county authority continues to spend the money.

The 15 grants provisionally approved by the Redevelopment Authority Friday “are all great projects that help municipalities and nonprofits. We do a lot of good and it’s a proven process,” said State Sen. Wayne Fontana, D-Brookline, a member of the RAAC board, adding that the grants are not based on political parties or politics.

The speaker wants a declaratory judgment that all remaining funds be deposited into “a restricted receipts account” in the Commonwealth Financing Authority.

“The crux of this case is really very simple. Obey the law,” said Christine Goldbeck, a spokeswoman for Mr. Turzai, in an emailed response to a request for comment.

“The law is clear, the two programs [CITF and GEDF] should have been merged into a single GEDF program and all allocations of funds made after Jan. 1, 2018 should be deposited into a restricted account with the Commonwealth Financing Authority,” she continued. “That did not happen.

“We spent months seeking resolution. As we had heard nothing back, we had no choice but to ask the Commonwealth Court to intervene and hear our case.”

The Commonwealth Financing Authority, which would receive the funds if Mr. Turzai prevails, is run by seven board members. Four are appointed by legislative leaders, and the other three are the secretaries of the Department of Community and Economic Development, the Office of the Budget, and the Department of Banking and Securities.

“Project approval requires five affirmative votes, four of which must come from legislative appointees,” according to that authority’s website. Thus appointees of the legislative leaders have de facto veto power over that authority’s grants.

Mr. Turzai wants the court to prevent the defendants, including the county Redevelopment Authority board, “from administering, preparing for, or moving forward with any future disbursements designated as grant payments” from the funds.

Ms. Goldbeck pledged that “the funds allocated to Allegheny County will remain in Allegheny County,” adding that the speaker hoped for a quick resolution without “protracted and expensive litigation.”

Grants approved on Friday by the county Redevelopment Authority board ranged from $75,000 to $250,000.

Some of the approved projects:

• $225,000 toward the Aviary’s $2 million project to make the outdoor Rose Garden a four-season education center.

• $200,000 toward the Jewish Federation of Greater Pittsburgh’s $2 million project to relocate their Oakland office.

• $250,000 to the Elizabeth Seton Center in Brookline, to better integrate programs for senior citizens and young children, including handicapped access to restrooms.

• $125,000 to correct landslide damage in West Homestead, where the damage totals $800,000, and the borough budget totals $3 million.

Other approved grants would partially fund municipal projects in Forest Hills, Aspinwall, McKeesport, White Oak, Harrison, Turtle Creek and Wilkinsburg.

Other nonprofits approved for grants include East Liberty Family Health Care Center, Garfield Jubilee Workforce Development Training Site Project, Mount Ararat Community Activities Center, the Wilmerding Community Center project and the White Oak Athletic Association.

Mr. Fitzgerald’s spokeswoman declined comment.

Linda Wilson Fuoco: lfuoco@post-gazette.com or 412-263-1953. Rich Lord: rlord@post-gazette.com or 412-263-1542.  Mark Belko contributed.

First Published April 26, 2019, 1:10pm


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