Council Debates University Tax Status

Harvard was the topic of discussion at last night's City Council meeting, as city administrators presented a detailed report explaining how much Harvard pays Cambridge each year in lieu of taxes for property that is tax-exempt affiliate housing.

The report, presented by Assistant City Manager for Fiscal Affairs James P. Maloney and City Manager Robert W. Healy, said Harvard pays about $1.2 million to the city for its tax-exempt property each year, in addition to the $2.6 million it pays for its taxable property.

According to the report, Harvard's assets at DeWolfe Street, 29 Garden St., Haskins Hall, Holden Green and Peabody Terrace are several of its affiliated housing properties that are exempt from taxes each year. Its commercially leased buildings, including many in Harvard Square, remain fully taxed, Maloney said.

The matter was brought to the attention of the council because Harvard's current 10-year contract tax agreement with the city is set to expire on Dec. 31. Negotiations between the city and the University are currently underway, Maloney said.

The report sparked questions and reactions from several councillors, including Kenneth E. Reeves '72, who said that if Harvard is worth $13 billion, the city should get more taxes from it.

"We could use more than $3.8 million in taxes," Reeves said. "Here we tax the poor and the rich don't pay much tax, at least the university-rich."

Councillor Katherine Triantafillou, who brought the issue before the body, voiced her displeasure with Harvard's assertion that it should pay the city $412,000--instead of the $442,000 it currently pays--for Peabody Terrace.

"It disturbs me...that they are arguing that this affiliate housing should not be taxed at a full rate," she said.

Triantafillou said there is always a tension between universities and towns, with towns subsidizing schools because of the educational benefits they provide. In this case, however, she said Cambridge is subsidizing a multibillion corporation--Harvard.

"Is it a fair trade-off?" she asked.

Triantafillou said it was this question that prompted her to bring this issue before the council.

Harvard and Cambridge first agreed to an "in lieu of taxes" agreement in 1969, Maloney said. The agreement was driven in part by the realization that any legal battle that would ensue as the parties tried to reach an agreement would be costly, he explained.

At the end of the original 20-year agreement in 1989, the two parties came to terms on a new 10-year contract. Each year, the agreement is reviewed and the amount of in lieu of taxes paid are updated, he said.

Maloney added that Harvard has adhered to the 1989 agreement "without exception."

In other business, the council voted on and approved a resolution joining Boston, Chelsea and other communities in opposition to a Massport proposal to build a new runway at Logan Airport which would lead to increased air traffic over those cities and over Cambridge.

The project, called "Runway 14/32," would lead to "a tripling of planes in this direction," said James M. Williamson, a Cambridge resident and a member of the runway opposition group Communities Against Runway Expansion (CARE).

"Every community in the area has come against it," said Kurt H. Walter, who spoke to the Council on behalf of CARE.

He said that CARE represents a group of citizens who "don't want any more noise." He described the battle against Massport as a struggle of "David vs. Goliath" proportions.

In the second half of the meeting, the Council also passed a motion calling for a zoning analysis and a history of the site of Memorial Drive and Western Avenue. Harvard has discussed the possibility of building a modern art museum at the site, said Councillor Henrietta Davis.