Thomas Breen file photo
Mayor Elicker: City will make more money in near term if Yale takes 300 George off tax rolls ...
City of New Haven data
... because of city-Yale deal that requires university to pay portion of tax bills for 12 years after converting to tax-exempt.
Even if Yale does take the recently purchased med-tech complex at 300 George St. off the tax rolls, New Haven will bring in more revenue from that property over the next 13 years than if the university had never even bought it.
So argued Mayor Justin Elicker in an interview about Yale’s $139.6 million acquisition of the nine-story downtown lab-and-office building — and in defense of the near-term benefits of a key provision of a recently inked city-Yale deal.
Yale purchased 300 George on Nov. 30 from an affiliate of Winstanley Enterprises. According to a university spokesperson, Yale does not plan “immediately” to stop paying taxes on the building, which is occupied primarily by Yale and Yale New Haven Hospital. But, if the university does take the property off the local tax rolls, it will “follow the terms of the partnership agreement” with the city that the Elicker administration struck in November 2021 and that the Board of Alders approved in April 2022.
The 300 George St. sale therefore represents the first big test of a part of the city-Yale deal, which commits the university to paying the city a declining portion of the taxes that would otherwise be owed on a property for 12 years following that property’s conversion to a tax-exempt use.
That part of the deal was designed to blunt the tax impact of Yale expanding its real estate holdings. It requires the university to pay a tax equivalent for newly converted tax-exempt properties at the same time that the state continues to step in to partially reimburse New Haven through its Payment in Lieu of Taxes (PILOT) program.
In a Wednesday phone interview, Elicker defended that portion of the city-Yale deal as ensuring that New Haven will make even more money off of 300 George over the next decade-plus than if Yale had never bought the property at all.
How is that possible?
Here’s how that math works, as explained by Elicker:
300 George.
At the property’s current tax assessment and the city’s current mill rate, 300 George St.‘s annual local property tax bill is $2,840,576. (A secondary levy applied by the Town Green Special Services District raises the property’s annual bill to over $3 million, but does not affect the underlying city assessment, city mill rate, or city portion of the property’s tax revenue.)
If Yale had never bought the property and if 300 George’s assessment and the mill rate remained exactly the same over the next 13 years, then the city would bring in a total of $36,927,488 in tax revenue from this property during that time.
Under the terms of the current city-Yale deal, Yale will have to pay the city a declining portion of the otherwise-owed taxes on 300 George, even as the state reimburses New Haven for 50 percent of the now tax-exempt property’s full tax bill. Taken together, those two numbers — the Yale payment and PILOT — would add up to $39,768,064 over the same 13-year period. That’s $2.8 million more within that 13-year period than if the property had never been taken off the tax rolls.
“I think it’s important to underscore it’s a private transaction and the city does not have the ability to stop such a transaction,” Elicker said about Yale’s purchase of 300 George. “We can’t just say to a property owner: You can’t sell this property to someone else.”
But, he continued, “I think [this sale] is an example of how, because of the agreement we struck with Yale, the financial impact to the city is dramatically different” than if this deal were not in place.
“Of course, after year 13, we will only receive the PILOT funds,” Elicker conceded. “But we’re not comparing this with a world where Yale doesn’t purchase properties. We’re comparing this with a world where Yale” does continue to expand, as it did before this deal was in place and as it will likely continue to do.
What does the mayor say to the argument that the city-Yale deal allows the university to maintain a short-term narrative that its expansion won’t immediately affect New Haven’s tax roll, and provides political cover for the university to accrue more property that will be tax-exempt in the long term?
“Whoever’s making that argument is looking for an argument to make,” Elicker countered. “Yale has purchased many properties in the history of our city. In the last four years, Yale hasn’t made a lot of major property acquisitions. This is obviously a big property. [But] it doesn’t mean all of a sudden that Yale is going to change the way that they conduct business in New Haven.”
Elicker was asked for his take on the three other key terms of the six-year city-Yale deal, which was first announced in November 2021 and took effect in April 2022. Elicker said that Yale’s roughly $10 million increase to its annual voluntary payments to the city for a limited number of years “has dramatically changed the city’s financial situation” for the better, especially when taken alongside the state’s increased annual PILOT payments.
In regards to the conversion of High Street between Chapel and Elm into a pedestrian- and cyclist-only car-free pathway, Elicker said, “the ball is in Yale’s court. There’s been conversations between Yale and city staff as to what that will look like. That work is ongoing.”
As for Yale’s commitment to create a new local-economic-development-focused Center for Inclusive Growth and seed such a project with $5 million, Elicker said, “we feel very close to hiring an executive director, which is key to making the work of the center happen.” He said that, while the city and Yale are working to create a “separate organization that will hire the executive director,” the city will likely hire that executive director first, so as not to “hold up the hiring of the executive director as that process unfolds.”
Asked if he’s already thinking about what to do after this six-year city-Yale deal expires, Elicker noted that the university is currently looking for a new president to replace Peter Salovey upon the latter retirement at the end of this academic year. “Once Yale has settled on a new president, I will be actively engaging with that individual on all different ways the city and university can work together.”
Repost.Like I said City for Sale.
Read this book call In the Shadow of the Ivory Tower: How Universities Are Plundering Cities, by Davarian L. Baldwin.He said.
We are witnessing higher educations gaining control over not just economic development but also urban governance.From New Yorks Upper West Side to the South Side of Chicago, and from downtown Phoenix to the entirety of New Haven, universities are remaking American cities in their image.
In his new book In the Shadow of the Ivory Tower: How Universities Are Plundering Cities, Davarian L. Baldwin examines how urban universities are straying from their purported mission of educating students and fostering innovation for the common good. Instead, their activities are increasingly oriented toward capital extraction and accumulation at the ultimate expense of working-class urban residents.He said.Columbia and New York University (NYU) are two of the biggest landholders on the island of Manhattan so large that, at one point, they were actually only surpassed by the Catholic Church.The University of Chicago fields one of the largest private security forces in the world, with jurisdiction over fifty thousand nonstudent residents on the citys south side. Yale University and its hospital make up one of New Havens largest landholders, and Yale deploys a private armed security force with policing jurisdiction over the entire city.University development often involves commercial corridors like University of Chicagos Harper Court, or USC Village, or the Shops at Yale.But theres also a cost for those living in the shadows of these ivory tower developments. These expansions raise housing costs and displace residents in neighborhoods that are largely filled with working-class people of color. Campus police forces surveil and profile those same residents and are rarely held to public account.
Part One.