Amid Harvard’s Protracted PILOT Negotiations, Other Ivies’ Agreements May Offer Roadmap

In a recent Cambridge City Council meeting, the tensions underlying negotiations between Harvard and the city over its Payment in Lieu of Taxes program came to the surface in a half-serious threat: opening up a sewer line running under Harvard, a certain nightmare for the University.

“There have been occasions in the past when we have felt that we would need to open up that sewer line so as to do further investigations,” Deputy City Manager Owen O’Riordan said.

“So that’s also perhaps a little bit of leverage that we may be able to utilize,” O’Riordan added.

The warning was perhaps more a reminder of the city’s municipal powers than a genuine intention to dig up a sewer line running under the largest university library in the state. Yet it was also a reflection of the at-times awkward relationship between the immense wealth and influence of Harvard and the still-formidable powers over utilities and development that the city of Cambridge wields over it.

Now, as Harvard’s twenty-year agreement with Cambridge approaches its June expiration date and Boston looks to revamp its voluntary payment program altogether – perhaps with a binding agreement this time — that tense relationship has been thrust back into the spotlight. With potential turning points imminent for Harvard’s tax relationships with Boston and Cambridge, the Crimson looked at the PILOT programs of the seven other Ivy Leagues to understand how elite universities and their host cities negotiate their tax relationships across the American Northeast.

Relying on a mix of public records and university reports, the Crimson found existing agreements that ranged from contractual to voluntary, and running from just a few years long to several decades, each reflecting a possibility for the next iteration of Harvard’s own PILOT programs. Ultimately, how much the University ends up committing to pay — and for how long — may come to reflect the extent of goodwill existing between the institution and the cities that host it.

PILOT programs are a popular way for municipalities across the country to recoup property taxes that they rely on to fund their budgets, but which are lost to the tax-exempt land holdings of wealthy nonprofits like Harvard. Since 2024, each University in the Ivy League has PILOT payments to their host city to compensate for their nonprofit, tax-exempt status.

Harvard has the longest history of PILOT payments among the Ivies, starting with its first to Cambridge in 1929. At the time, it was the first such agreement between a nonprofit institution and a municipality in the country.

The University’s current PILOT agreement with Cambridge was signed in 2004 and meant to last 50 years. But the city terminated the agreement after just 20, forcing them back to the negotiating table.

That means the agreement is set to end in June, with negotiations still ongoing. Cambridge is asking Harvard to increase its annual payments from $4.7 million, pointing out that both its endowment and annual budget have both more than doubled since the agreement was signed two decades ago.

Harvard’s 50-year contract with Cambridge represents the longest out of the Ivies’ PILOT agreements, a possible sign of goodwill between the two entities.

Ivies in much smaller towns, like Cornell and Princeton, tend to have shorter-term contracts — and joined the program later in the game. Princeton’s agreement with the borough of Princeton, the municipality it lies in, is just five years long, making it the shortest of the Ivies.

And while Harvard has been making PILOT payments since 1929, Cornell, located in the town of Ithaca, entered its first ever PILOT agreement with the municipality just last year.

Overall, Yale’s PILOT payments are the highest of the eight, averaging $22.5 million to the city of New Haven annually over a six year period.

Columbia’s payments, meanwhile, total to $4.72 million annually, as part of a 36 year agreement with West Harlem — a similar amount to that of Harvard’s original 50-year PILOT agreement that had since been terminated.

Along with stark differences in the length and amount of payment agreements, the allocation of these funds within municipalities also varies widely between the universities. Some universities, such as Yale and Brown, pay their sum directly to the city’s budget without strings attached.

Others, like UPenn and Princeton, focus their money on specific initiatives within the municipalities, such as addressing environmental hazards in Philadelphia public schools or Princeton’s sewer infrastructure and fire department improvement.

Princeton’s choice of contribution reflects a popular argument advanced by PILOT advocates, who say that tax-exempt universities still benefit from core city services like sewer systems, police and fire services, or snow removal, and therefore ought to direct a portion of property taxes back to the city to help fund those services.

Partly as a result, some universities’ preference for participating in PILOT programs through community benefits has angered residents, who criticize it as a cop-out from making the hard payments that cities need. In Boston, Harvard counts half of its PILOT contributions in community benefits, and has failed to meet the city’s requested cash payments for the last 12 years of available data.

Similarly, UPenn specifically has faced scrutiny over their unwillingness to pay PILOT payments outside of their public school initiative.

The Crimson reached out to spokespeople for every Ivy League University for this article, none of which provided comment.

Ultimately, the lagging efforts by Harvard, Cambridge, and Boston to settle on new agreements that will perhaps take inspiration from those of the other Ivies — either from their successes, or mistakes — will add to a longer, century-long struggle to agree on tax arrangements between town and gown.

The Deputy City Manager’s warning this January year recalled similar comments that were made decades ago. Like O’Riordan, Cambridge Mayor Alfred E. Vellucci once attempted to remind Harvard of the city’s municipal powers in the 1980s with a threat to seize Harvard Yard by eminent domain — and then pave it over to create more public parking.

“We will cut all their trees and all their landscape after confiscating their land by police force if necessary,” Vellucci said in a perhaps equally-unserious threat. In the end, the Yard survived, as have Harvard’s ties with the city.

—Staff writer Jack B. Reardon can be reached at jack.reardon@thecrimson.com.

—Staff writer Shawn A. Boehmer can be reached at shawn.boehmer@thecrimson.com.