Tax revenues on the 30-acre 770,000-sf Arsenal site--which was only 50% completed--was $2.7 million last year. 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 officials here fear that the university will slowly replace the commercial leases as they expire with university space.
Harvard University has offered to make payments to the town in lieu of property taxes but according to Mary Power, senior director of community relations for Harvard, as of yet the town and the university have not been able to come to an agreement. Harvard has structured this kind of deal with Boston and Cambridge, where the university also owns property.
According to Power, Harvard pays $1.6 million a year to Cambridge and $1.4 million a year to Boston. "We've indicated our willingness to make payments," Power tells GlobeSt.com. "Currently, the entire property remains taxable." Eighty percent of the property is now commercially leased.
According to Joe Wrinn, spokesperson and director of Harvard's news office, as of yet, the university has made no plans to take over any of the space. "They're under the impression that they've lost a tax base," Wrinn tells GlobeSt.com, "but they're wrong. The place will generate $3.2 million in taxes next year." Wrinn adds that that Harvard has also made $2.7 million in direct and indirect payments to the town and has agreed to lease the arts and cultural center at the Arsenal for free.
While Wrinn emphasizes that Watertown has not lost any money yet he does acknowledge that eventually Harvard will use some of the property. Both Wrinn and Power are quick to add that Harvard has the potential to be a stabilizing force in the community in a period of notorious instability in the high tech sector here.
"Institutional use typically attracts other employers," says Power. "We aer stable and resilient and we are bringing dollars to local businesses. We look forward to being an actively engaged part of the community and a good neighbor."
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