PILOT, for the millionth time

If you’ve lived in Worcester for at least a few years, you’ll notice that the City Council has a few favorite topics it revisits over and over again.

We’re a bit overdue for the annual saber rattling about how city employees should live in the city; presumably having both a DPW&P Commissioner and a City Manager who don’t live in the city will keep us from having to listen to that argument for at least another year or two.

On to our favorite biannual complaint: that the non-profits aren’t paying their fair share (on tonight’s agenda).

Item 13a asks that the “City Solicitor provide City Council with a history and explanation as to the legal / political process(es) implemented by the City of Cambridge, Massachusetts to no longer be subject to Mass. Gen. Laws. Chapter 40A, Section 3 (the ‘Dover Amendment’).”

I’ve looked into this a bit (though I’m not an expert OR a lawyer) and I think that this really applies to commercial properties owned by Harvard and MIT that are not exempt from property tax. So, MIT pays Cambridge nearly $40 million in taxes annually, and Harvard pays $5.5 million annually. (See City of Cambridge budget, page II-9)

Cambridge also receives $5.8 million in PILOT [City of Cambridge budget, page III-14], which is about 1% of its total revenue.

So why can’t we have that here?

Unlike Cambridge, Worcester does not have two large institutions with endowments larger than the GDP of a small nation and extensive commercial real estate holdings.

The original impetus behind the Dover Amendment exemption was that Harvard was Cambridge’s largest landlord, and that it continued to gobble up property and expanded beyond promises to neighbors and the city.  Worcester isn’t a city where the majority of residents are renters, many of whom pay rent to a non-profit.

So — good luck to the City of Worcester on this.  I doubt it will happen, I’m sure we’ll keep hearing about this every six months, and we’ll have devoted time to discussing a fruitless endeavor when we could be discussing other fruitless endeavors, like the $1 million+ we’ve spent in settlements due to complaints against the WPD in the past decade.

A word on PILOT

Pretty soon it will become obvious that we won’t be able to get millions in tax dollars from various universities and then the conversation will swing back to PILOT.

MIT pays Cambridge $2.3 million in PILOT a year; its endowment is $12.4 billion.  The yearly PILOT payment is 0.018% of its endowment.

Contrast that with WPI’s endowment, which is $360 million, and its PILOT payments are probably around $450,000, or 0.08% of its endowment.

Aside: your guess is as good as mine when it comes to PILOT payments.  The city’s budget doesn’t have any figures that indicate which institutions pay PILOT, how much they pay, and where those payments are directed.

A little less than a year ago, in what was quite possibly the most optimistic city document ever, the city assessor said we could be getting about $4.5 million more in PILOT than we currently do.

I’ve said it before and I’ll say it again: PILOT happens when a non-profit wants something (a street closed, for example).  It’s not megabucks — in most communities, including ours, it amounts to less than 2% of the city budget.

I’ve got a proposition: how about we not sue Nga Truong’s attorney or the EPA for a whole year?

With the amount we save in legal fees, we’ll make up for what we didn’t get in PILOT, and we won’t look like fools in the local press to boot.

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