The Wu administration has efficiently brokered a five-year cope with Northeastern College, which can see one among Boston’s largest tax-exempt nonprofits contribute greater voluntary PILOT funds to the town.
The settlement between the Metropolis of Boston and Northeastern College was authorised by the Boston Planning and Growth Company Board Thursday. Beneath the phrases of the deal, Northeastern will up its annual contribution beneath the town’s Fee in Lieu of Taxes, or PILOT program, to whole greater than $49 million in money and neighborhood advantages over a five-year interval set to run out on June 30, 2030.
Northeastern’s annual money fee to the town will enhance incrementally by 36.8%, from $1.9 million in fiscal yr 2025 to $2.6 million in FY30. The college has additionally dedicated to contributing $37 million in so-called neighborhood advantages — which can embody help for public training, housing and neighborhood entry to public and institutional areas, together with different shared priorities with the town.
“Boston thrives when our leading institutions match their global reach with a deep commitment to our neighborhoods,” Mayor Michelle Wu mentioned in an announcement. “Our five-year PILOT settlement units a brand new customary for greater annual money funds and neighborhood advantages at a time when Boston taxpayers want aid.
“This agreement is proof that even in an uncertain time, Boston can come together with our institutional partners to move the city forward,” the mayor added.
The “landmark” settlement with Northeastern, because the mayor’s workplace put it Thursday, is the primary to return out of the Wu administration’s greater than year-long negotiations with the 9 of the largest nonprofits in Boston to ink long-term PILOT funds to assist ease the tax burden on owners and companies.
As soon as most of these offers are secured with the “Big 9,” different tax-exempt establishments within the metropolis are anticipated to fall like dominoes.
Together with Northeastern, the Wu administration is concentrating on Harvard College, Boston College, Boston School, Mass Normal-Brigham Hospital, Beth Israel Hospital, Boston Kids’s Hospital, Dana Farber Most cancers Institute, and Tufts Medical Heart.
Householders had been hit with double-digit property tax will increase this yr, and a part of the criticism of a mayoral residence rule petition that’s stalled on Beacon Hill is that the town ought to look to garner further funds from tax-exempt nonprofits to supply residential tax aid, relatively than shift extra of the tax burden to companies.
In fiscal yr 2024, the final PILOT information offered by the town, collaborating academic, medical and cultural establishments collectively met simply 76% of their requested $128.79 million PILOT fee. Simply $34.85 million of the $98.52 million whole contribution was paid in money.
The dearth of full compliance from most of the collaborating establishments has lengthy been a supply of rivalry. Whereas advocates and a few elected officers have argued that rich nonprofits aren’t paying their “fair share,” the nonprofit sector has pointed to the neighborhood advantages its establishments present.
Wu relieved six tax-exempt cultural establishments from their PILOT duties final yr, partly, as a result of the museums have partnered with the town on a program that gives free entry for metropolis schoolchildren and their households on sure Sundays.
The Wu administration sees the five-year settlement with Northeastern — and potential offers with the town’s different largest nonprofits — as a solution to create a “predictable and reliable schedule” for PILOT funds. It’s the primary written PILOT settlement between the town and Northeastern in a long time, the mayor’s workplace mentioned.
In FY24, Northeastern met 67% of its requested PILOT fee. The college contributed $1.9 million in money and $6.7 million in neighborhood advantages, per metropolis information.
Northeastern has been a “long-standing partner” with the Metropolis of Boston by means of its “nation-leading” PILOT program, a system that launched in 2012 that governs annual voluntary money and neighborhood advantages contributions from the town’s largest non-public, nonprofit, and tax-exempt establishments, the mayor’s workplace mentioned.
Beneath this system, non-public establishments with tax-exempt property in extra of $15 million make voluntary funds amounting to roughly 25% of what they’d have paid in actual property taxes. Funds are cut up between money and neighborhood advantages credit.
The PILOT program has largely operated beneath the identical pointers because it was created a couple of dozen years in the past. The Wu administration’s negotiations to replace this system come amid threats and efforts from President Donald Trump to withhold federal funding from colleges and hospitals, and take away Harvard’s tax-exempt standing.
Neighborhood advantages eligible beneath this system — and which should be authorised by the town — embody people who straight profit the Metropolis of Boston, aren’t included in different preparations or agreements, and aren’t a part of the core mission and companies of the establishment.
Northeastern and the town have dedicated to renewing the five-year settlement upon its expiration on June 30, 2030.
The Planning Board additionally authorised an institutional grasp plan agreed upon between the town and Northeastern that features roughly $62.5 million in neighborhood advantages over the subsequent 10 years, in addition to $16.5 million in neighborhood advantages and $6 million in linkage related to the Matthews Area redevelopment.
