Mayor Smiley's new plan has city's universities paying more. Here's how much.
PROVIDENCE – Mayor Brett Smiley on Tuesday unveiled new agreements with four colleges governing payments in lieu of taxes, or PILOTs, vastly increasing the funding the city will receive from tax-exempt institutions.
The city drafted two agreements: a memorandum of understanding, or MOU, with Brown University, Providence College, Johnson & Wales University and the Rhode Island School of Design, and a memorandum of agreement or MOA, with Brown University alone.
Both documents replace agreements that expired in 2022 and 2023, offering the city a new opportunity to renegotiate its support by nonprofits that comprise a massive footprint in Providence.
In total, the two new agreements will generate about $223.5 million over 20 years. That's a 138% increase from the $94 million the previous two agreements generated. Like the previous agreements, the MOU will last 20 years and the MOA will last 10 years.
Council President Rachel Miller was instrumental in pushing for higher annual increases to voluntary payments from the colleges, and said she supports the agreement.
"We've come to an agreement that sets our city now as a national example for how to better define the relationship between institutions of higher education who happen to be property-tax exempt but are so vital to the success of our city," Smiley said.
Brown University President Christina Paxson, speaking on behalf of the four schools, called the six months of negotiations "constructive" and "positive."
What's next for the agreements?
The agreements are tentative. They will be presented to the City Council on Thursday and referred to the Committee on Finance where they will be vetted and receive feedback from residents. Then the committee will vote and send the agreements back to the full council. Miller expects that to happen in October.
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Smiley unveiled the agreements on one of the busiest news days of the year, as a nationally watched Democratic primary played out in Congressional District 1, along with a primary for the late state Sen. Maryellen Goodwin's District 1 seat.
Smiley said he had to deliver the news in spite of the day's events to stay on a schedule that had been decided with the council as it returns from its summer break.
How do Providence's PILOT earnings compare to other cities?
The administration cited New Haven as the best example of a similar-sized city with which to compare Providence's PILOT agreements.
According to the administration, Providence's PILOT payments are a bigger chunk of the assessed property tax value than Yale University's PILOT payments to the City of New Haven. That's even though Yale owns more that twice the amount of property owned by Brown, Providence College, Johnson & Wales and RISD.
Once the agreements are approved, the city said it will lift its hiring freeze, allowing the city to make certain quality-of-life investments it has planned.
Quality-of-life meetings to take place as part of agreement
As part of the new MOU, the city plans to engage in six "quality-of-life" meetings per year with the four schools. Those meetings will deal with any issues presented by students living in Providence and are intended to address the concerns of residents near the schools. Those might include noise, trash or bicycle parking, for example. In turn, schools will also be able to bring their concerns to the city if, for example, they have infrastructure issues.
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Last year, the City Council weighed whether to pass an ordinance limiting the number of student tenants allowed in a single apartment, though the proposal died out after a deluge of criticism from college students.
Smiley said that housing ordinance "might bubble up" again, though the council would need to vet it. But Smiley added that he sees the meetings more as a peace-keeping function between residents and students and taking effect "a little bit more at the street level."
What about hospitals? Lifespan hasn't made $400,000 payment
The administration revealed that Lifespan, which has been having financial issues, hasn't made a $400,000 payment to the city that it has made in previous years. It is the only major nonprofit without a PILOT agreement. Conversely, Care New England, which is two years into a three-year agreement, has made its $350,000 payment.
"Lifespan remains committed to continuing to support the City of Providence and its residents," said Lifespan spokeswoman Kathleen Hart. "Our first and foremost responsibility is to our patients. We are in discussions with the mayor’s office on ways Lifespan can provide strategic assistance that benefits city of Providence residents and the economy of the state as a whole."
This article originally appeared on The Providence Journal: Brown, Providence College, RISD, JWU to pay city more in new PILOT plan
