City, University Negotiators Near Agreement on Harvard Tax Status

More than two years after Harvard negotiators first sat down with their Cambridge counterparts to haggle over their annual contribution to the city, officials from both parties say they are merely a few weeks away from announcing a groundbreaking new agreement to govern the University's tax status.

The final details of the plan are now in the hands of City Manager Robert W. Healy, the city's top executive, and Harvard Vice President John Shattuck, who oversees all community and government relations, city and University officials said.

According to Director of Community Relations Marilyn Lyng O'Connell, Harvard's legal team finished going over the agreement this summer.

While officials on are keeping mum about the specifics of the new plan, City Treasurer James Maloney said that the agreement will contain "mutual cooperation on areas not previously covered."

Although he declined to specify details, a number of city activists have been lobbying for several changes in the prior agreement, under which Harvard voluntarily made an annual contribution to the city as compensation for its vast tax-exempt land holdings.

Topmost on their agenda is the inclusion of a kind of "insurance" policy--an added contribution for several University-owned commercial buildings that are already taxed directly.

Harvard currently maintains several commercial properties that are earmarked for eventual conversion to tax-exempt academic use. While University officials say they would compensate the city for any revenue it might use as a result of such changes, skeptics say they want to see that policy set down in writing.

"Obviously from a city view, it is an important area for change," said John R. Pitkin, chair of the Mid-Cambridge Neighborhood Association.

The current round of negotiations was originally scheduled to conclude last March, according to city officials, and the protracted delay has made several city council members restless. Earlier this month, Councillor Francis H. Duehay '55 called for a public hearing to discuss the negotiations, which are closed to council members.

Legal Battles Avoided

But while the details of the current plan remain a secret, Harvard has thus far managed to avoid the kind of painful legal battle that prompted it to sign the current agreement in 1968.

The 1968 agreement was the culmination of a four-year struggle between Harvard and the city over the tax status of Harvard's affiliated housing complex at Peabody Terrace. Since 1964, Cambridge had sent the University tax bills for the property--which Harvard paid under protest.

Under the terms of an out-of-court settlement in 1968, the city agreed not to tax the building directly, so long as Harvard made an annual in-lieu-of-tax contribution based on the gross rentals of the Peabody Terrace apartments.

Harvard had made similar payments since 1928, when the University removed several large parcels of land from the tax rolls.

Although the 1968 agreement expired two years ago, Harvard has continued to make annual payments as though it were in force. Last year, the contribution totalled $969,000, according to University figures. Because of an ongoing dispute, the city's estimate of the contribution is slightly lower--only $862,509.