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.


2 thoughts on “PILOT, for the millionth time

  1. PILOT expresses the underlying rage of “town vs gown” in spades

    It is simple. The story always goes like this”

    “Rich, spoiled, noisy college student vs blue collar Worcester”

    And we wonder why we aren’t college friendly?

  2. gayle says:

    glad you brought up difference with explanations ,between Cambridge and Worcester in regards to the time consuming, vision constrictions of these talks on endeavors of “Dover” and Pilots , when there could be better use of Time.
    per your statement ” 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.” is key question and also how the budget doesn’t answer a lot of questions on how money is reallocated when money comes in from other sources.
    As far as money spent in settlements due to complaints against the WPD in the past decade, I have seen many comments about this that concerns people and feel this keeps people from other visions to improve the failings of the city , unless, until more facts are in.I do know society today likes to sue. Many suits are settled rather than spending money on lawyers based on sympathy factor of plaintiff,dislike of police,untimely reporting or numerous other reasons. so weather the 1mil in the last decade is reasonable for a city this size , we would have to compare other comparable cities settlements. (I would love to know Cambridges’s for example because that population is educated & loves to argue)
    I do feel that Worcester unreasonably tries very ,too hard ,to keep people from filing legitimate complaints and that is what Atty Moore should do & be paid for in his expertise to investigate these before they become suits. This failure backfires and causes more settlements and thus taxpayers money.To me it seems that he only answers the legal questions that are asked to him . The city hired on a compliance person last year but I don’t know what he does but he should have casuality claims experience and reviewing past mistakes and we should( but I can’t say I have much faith in) , see a difference, or else its just another new city job without results. .

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