Harvard purchased the 30-acre site two months ago for $160 million from O'Neill Properties, which had developed the historic US army base into a business complex in 1998. Harvard Business School Publishing leases 112,000 sf on the site and in its contract, the university was given first rights of refusal on the property.
According to Mark Boyle, director of community development and planning for the town, tax revenues on the Arsenal site--which was only 50% completed--was $2.7 million. Expected tax revenues on the completed site would jump to $4.8 million next year. If Harvard maintained the commercial leases on the site it would be obligated to pay taxes but the university is slowly replacing the commercial leases as they expire with university space.
In lieu of property taxes and despite it nonprofit status, Harvard has agreed to a payment of $2.7 million the first year of its ownership with that figure going up one and a half percent every year for 10 years. From the eleventh year to the twentieth year of ownership that figure would be reduced annually by 10% until the last year when it would no longer make any payments.
Officials here are not prepared to lose out on millions of dollars a year. "We would like to see Harvard pay its fair share--no more and no less--than what other commercial property owners would pay for the duration of their ownership," says Boyle, who adds that Harvard has indicated that it is not willing to do that.
Town officials are currently attempting legislative means to restrict the tax-exempt opportunities of the university. "This is a great overreach of their tax-exempt status," notes Boyle. The Arsenal was recently cleaned up of nuclear wastes and other pollutants at a cost of $100 million in taxpayer money.
"We were hoping to attract commercial property owners," says Boyle. "I could see if this was a struggling hospital but this is a corporation with a $19 billion endowment. They are a real estate company that does education on the side."
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