Those of you who have been following bloggingbelmont.com for the last couple months will, no doubt, recall the Eight Crazy Ideas (that just might work) for ’08 series we ran. This was an effort to throw some out of the box ideas about how to improve life in town to the proverbial wall and see what stuck. Well, one idea that appears to have stuck — in the mind of our Board of Selectmen, anyway — is #4: PILOT agreements
. Folded into Selectman Angelo Firenze’s address to the assembled masses at the March 1 meeting on School Department funding was a brief aside that the town was in the process of negotiating PILOT — or payment in lieu of taxes — agreements with one or more of the tax exempt entities that call Belmont home. Mr. Firenze declined at the meeting or in a subsequent email exchange with B2 to name which organizations the town was negotiating with, or to comment on the status of the negotiations. But the list of possible parties to a PILOT agreement is short: The Belmont Hill School, a major landowner with a $47 million endowment is certainly likely to have received a phone call. Belmont Day School is another– perhaps even the LDS (Church of Jesus Christ of Latter Day Saints) Temple. McClean Hospital contributed to the town’s coffers under a PILOT agreement for years. My understanding is that the agreement expired or was canceled at some point, though I’m still trying to confirm this with Tom Younger.
[UPDATE: According to Town Assessor Richard Simmons, McLean is scheduled to make its last PILOT payment to the town, for $99,000, in FY08.]
Belmont Municipal Light Department currently makes payments to the town under a PILOT agreement as well.
Selectmen Firenze was careful to point out that these organizations are under no obligation to agree to PILOT arrangements with the town — and would do so only to be good neighbors and show good faith with the town. It’s also unclear, at this point, how much additional revenue we’re talking about. As I noted in my original Crazy ’08 post, after Harvard University bought the Arsenal on the Charles office complex from O’Neil Properties in 2001, our neighbors in Watertown were able to negotiate a PILOT agreement with Harvard that started from that $3.8 million base rate and increased 3% per year through 2054, in addition to one time payments of $600,000 for community development and educational enrichment activities in Watertown. But the Arsenal is a huge complex and the lynch pin of Watertown’s commercial development. Harvard also has a $30 billion + endowment to play with. I may have misheard Selectman Firenze at the noisy March 1 meeting, but if I’m not mistaken, the figure $100,000 was thrown out as a possible addition to the town’s top line as a result of the PILOTs under negotiation — though it’s not clear whether that was a total, or the figure from one tax exempt organization, or a reference to the McLean annual PILOT contribution. Of course, the devil is in the details, and it will be interesting, when the details emerge, to compare the PILOT payment with an estimate of what the land, etc. would fetch the town were it to be turned into commercial or residential development. Let’s not flatter ourselves that it was the Crazy ’08 feature that put the idea of PILOTs on the table, but kudos all the same to Mr. Firenze and the Selectmen for picking up the ball on PILOTs and running with it!
It would be very interesting to know what these tax exempt entities have been contributing in the past. When I asked about Belmont Hill School I was told that we get to use their field and track for after school sporting events.
Let’s find out what the value of the land is and what, if it were taxable property, the tax rate would be? I’m guessing more than the cost of a cruiser as Angelo suggested. This isn’t in expectation that we’d get anything near that much, but more to inform the powers that be at the BHillSchool of the advantages they have being tax free. We may want to consider reviewing the land value of all the tax free entities in town.
Then again, the fear from some is that PILOT may effect the religious community. For instance St. Joe’s and other churches sit on prime real estate and we wouldn’t want them to think they should feel any responsibility to the town in exchange for all the land they occupy tax free. Which also means we can’t consider the LDS because then we could start looking at the rest of the churches…..
It’s tricky to figure this one out.
Anne wrote …”we wouldn’t want them [Belmont's religious institutions] to think they should feel any responsibility to the town in exchange for all the land they occupy tax free.”
I disagree about excluding property owned by religious institutions from PILOT consideration. First, this is just discussion and investigation at the moment. It would be irresponsible at this stage not to approach ALL the tax-exempt entities and sound them out about payments in lieu of taxes. Churches and temples play important roles in the community, but it’s not clear to me that they should be privileged over institutions whose missions focus on education or health or anything else.
We can’t force any of our resident nonprofits to pay us in lieu of taxes, and I suspect that some of them are experiencing financial problems of their own that would make such payments burdensome. Any institution that can’t afford to pay will be upfront about saying so, and I expect the town to be understanding — whether the institution in question is a church or a school or whatever. But given the town’s budget problems, how can we not ask?
Good idea, though, about researching the value of properties owned by the tax exempt entities in town and what their tax rates might be if they were taxable. If, as reported, the town is already in talks with (some of?) our tax-exempt neighbors about payments in lieu of taxes, probably the selectmen have done this homework.
Beth raises some good points. I doubt very much that any of the houses of worship in town are swimming in free cash, and I think its more palatable to residents to approach tax exempt organizations that are large landholders in town and that also have a balance sheet that suggests they’re in a position to be able to make some contributions back to the town in lieu of the taxes they would pay if they were for profit entities. But, as Beth says, in theory the town’s leaders should be looking across the board at what tax exempt organizations are in town and their ability to participate in PILOTs with the town.