Town Fight Against Harvard Spurs Legislation

WATERTOWN, MA-This town’s tax battle with Harvard University is taking on a greater significance as its legislative representative introduces a bill that would prevent nonprofits from being exempt from property tax. The battle began two months ago when Harvard purchased the Arsenal on the Charles here, a 30-acre commercial office center, for $160 million from O’Neill Properties. Local officials protested the sale because once the university takes over the site, it will be off the town’s tax payroll.

The university has offered a payment in lieu of taxes, but Representative Rachel Kaprielian, who represents the districts of Watertown and Newton, terms the offer “grossly inadequate. We’re looking for one day’s interest on their endowment. They should just pay their taxes. This is not a matter of their ability to pay.” The Arsenal battle spurred Kaprielian to file legislation that would force nonprofit institutions to pay property taxes if the property it purchases is more than one percent of the commercial tax base of the town. Senator Steve Tolman has filed an identical bill in the Senate.

According to Anne Brown, a member of the counsel for the taxation committee if the legislation is passed it would be retroactive to purchases that occurred after January 1, 2001. Brown tells GlobeSt.com that Harvard would be forced to pay commercial property taxes on the Arsenal property even if it was converted from commercial to educational use. Brown notes that the Arsenal is 33% of the commercial tax base of Watertown, so “it is substantial.”