Boston University Agrees to Pay into Town Coffers for Tax-Exempt Properties

After nearly five years of negotiations, Boston University officials have agreed to start making annual payments to Brookline in lieu of the property tax it avoids because of its non-profit status.

Under the deal, BU will pay 25 percent of the assessed tax on 19 tax-exempt properties, including school parking lots, storage facilities and academic buildings in Brookline. For fiscal 2011, the payment is expected to total $362,000.

Town officials have long urged the university, one of the largest landholders in Brookline, to contribute to town coffers to help pay for the police, fire and other services used by BU employees and students in Brookline.  BU already as a similar arrangement, often called a "payment in lieu or taxes" or PILOT, with the City of Boston.

"I think it's very right and proper that BU acknowledge that it does receive some benefits and services from the town in a very big way," said Selectwoman Nancy Daly.

The deal strips out some provision in an earlier agreement that would have dealt with properties the university decided to begin using for a non-taxable purpose and incentives for the university to develop more taxable value. Negotiators could not agree to terms for the two provisions and decided the deal could move forward without them, according to town Finance Director Stephen Cerillo.

The deal also includes a provision that would allow the university to reduce its payment obligation by sponsoring "community service, education, research or other programs that benefit the Brookline community." The Board of Selectmen would have to agree to any such program beforehand.

The payments are also expected to play a role as the university looks toward development project on the Brookline border.

"What this agreement does do is compel an ongoing dialogue," said Gary Nicksa , the university's vice president for operations. "This creates an environment that is really healthy in what people refer to as the 'town-gown relationship.'"

BU owns 40 properties in Brookline, including 19 that are at least partially tax-exempt. If the university were obligated to pay all taxes assessed for its exempt properties, it would own the town $1.4 million.

Brookline already has payment agreements with several smaller non-profits in town. Most recently, St. Paul's Church approached town officials about making an annual contribution.