By SUSAN JONES
The Board of Trustees’ Finance and Budget Committee on Dec. 5 approved a unique funding mechanism that will help pay for construction of Pitt’s BioForge facility in greater Hazelwood.
The committee authorized the University to borrow funds under the New Markets Tax Credit program, which incentivizes community development and economic growth through the use of tax credits that attract private investment to distressed communities.
Dwayne Pinkney, executive senior vice chancellor for administration and finance, said the BioForge project qualifies for the federal New Markets Tax Credit program “as it is located entirely within an area that is characterized by economic distress and inadequate access to capital and lenders. Further, the project is expected to create jobs and local economic impact in the project area and other low-income communities.”
He told the committee that Pitt has secured the commitment of real estate developer McCormack Baron Salazar and PNC Bank, through their community development entities, to utilize a portion of the tax credits allocated to them in support of raising capital for the construction of BioForge.
As part of the transaction, Pinkney said the University will be required to enter into a debt agreement, which will result in a 30-year obligation totaling approximately $9.1 million to meet all requirements of the New Markets Tax Credits program. This debt will remain on Pitt’s balance sheet with the expectation that it will be forgiven at the conclusion of the mandatory seven-year performance period of the program.
“It is expected that the net effect of this transaction will yield approximately $1.5 million in incremental proceeds, new funding that the University will utilize to reduce the amount of internal capital budget funds required to complete building construction,” Pinkney said.
BioForge, which was first announced in 2021, will focus on breakthroughs and innovations in the manufacturing of precision biological medicine. It will take the medicines developed by Pitt researchers and others, and figure out how to manufacturer them in a way that’s affordable and accessible. It is a key element of the Plan for Pitt 2028 goal to lead the life sciences century at the convergence of health, AI and technology.
Pinkney said the core and shell of the 185,000-gross-square-foot facility — located in the Hazelwood Green development along the Monongahela River — is “substantially complete” and that the interior work should be mostly done by May 2026.
“The building was budgeted at $120 million, and we expect final cost to come in well under that amount,” he said.
The Board of Trustees previously approved up to $10 million to buy 3 acres at Hazelwood Green for the project, which is funded in part by a $100 million grant from the Richard King Mellon Foundation — the nonprofit’s largest single-project investment in its 74-year history. The money is being disbursed in $10 million increments over 10 years.
Susan Jones is editor of the University Times. Reach her at suejones@pitt.edu or 724-244-4042.
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