In Northampton, no takers for PILOT program

  • Smith College. GAZETTE FILE PHOTO/KEVIN GUTTING

  • Cooley Dickinson Hospital. GAZETTE FILE PHOTO/JERREY ROBERTS

  • Northampton Mayor David Narkewicz sought five years ago to get commitments from major nonprofits in Northampton for annual payments in lieu of taxes, to no avail. GAZETTE FILE PHOTO/KEVIN GUTTING

Staff Writer
Published: 3/12/2020 8:02:42 PM
Modified: 3/12/2020 8:02:29 PM

NORTHAMPTON — As residents weighed raising property taxes through a Proposition 2½ override earlier this month, one question popped up at Mayor David Narkewicz’s series of town hall meetings: Why doesn’t Smith College pay more in taxes?

When the city faces an override, it’s a commonly asked question, Narkewicz said in an interview last week. “It frequently has come up during these times when we have a budgetary crisis,” he said.

In January, for instance, one resident asked, “Do you have any idea of what the comparative payment of other colleges and universities are to the towns that they are located in with regards to Smith? And do you have a strategy for encouraging Smith to participate, hopefully?”

Five years ago, the Gazette reported on Narkewicz’s effort to start a PILOT program — or payment in lieu of taxes — for nonprofit organizations in the city. In 2016, Narkewicz asked 10 large nonprofits, including Smith College, Cooley Dickinson Hospital, the Hill Institute, Northampton Community Arts Trust and Lathrop Home, to sign voluntary PILOT agreements. The City Council endorsed Narkewicz’s PILOT proposal in 2015.

The agreements would phase in payments to the program. Narkewicz proposed that these would start at 5% and gradually increase until they reached 5% of what the nonprofit’s property tax would be on their exempt properties. The first $1 million of property value, Narkewicz proposed, would be exempt.

Boston, for example, has PILOT agreements with colleges, universities, museums, hospitals, and other nonprofits that totaled $34 million in fiscal year 2019. Boston Medical Center, for example, paid $272,864 last year.

If Smith College paid 100% of its property taxes on its tax-exempt properties, it would have totaled $6.7 million in fiscal year 2016, according to a city analysis. Still, Smith College is the city’s largest taxpayer, according to the mayor, as it has properties such as 62 State St., where Hungry Ghost Bread is located, that aren’t currently being used for educational purposes. Property that is used for non-charitable purposes is taxable, according to the Massachusetts Department of Revenue.

Last academic year, the college spent $1,631,362 on permits, inspections, real estate taxes, and water, sewer and stormwater charges, according to Smith College’s website.

Of the 10 nonprofits that the city asked to sign on to the PILOT program, Historic Northampton was the only one to make a voluntary payment, which it did once the first year of the program, according to Narkewicz.

Hampshire Regional YMCA, Cooley Dickinson Hospital and Smith College all sent letters declining to sign onto PILOT agreements. They cited various reasons, ranging from the community services they provide to other donations they make. 

The other nonprofits — including the Hill Institute, Northampton Community Arts Trust and Lathrop Home — did not reply to the letter, according to Narkewicz. “They did not respond, and we took their silence to be that they did not wish to participate,” he said. 

Cooley Dickinson and Smith College, however, announced donations to the city in their 2016 written responses to the PILOT proposal. Smith announced $300,000 in unrestricted funding to the city over a period of three years, while Cooley Dickinson said it would pay $10,000 annually for three years. The payments from Smith and Cooley Dickinson, however, were not endorsements of a PILOT program.

Now, more than three years after the payment pledges, Stacey Schmeidel, a spokesperson for the college, said, “Smith has completed its pledge for $300,000 over three years, and the college continues to support initiatives throughout the city.”

The school also gave $50,000 to the Northampton Education Foundation and the same amount to Northampton Community Arts Trust last year.

Cooley Dickinson also completed its three-year donation pledge, said Julia Sorensen, a spokesperson for the hospital. The hospital is providing athletic trainers for the city’s high schools, some supplies for the Northampton Fire Department and $645,810 in unreimbursed care last fiscal year for city residents who couldn’tafford it, Sorensen said. If Cooley Dickinson paid 100% of its property taxes on its tax-exempt properties, the hospital would have paid $335,908 in fiscal year 2016, according to a city analysis.

PILOT payments would lessen the need for Proposition 2½ overrides, according to the mayor. “That, of course, was the thrust of the program to begin with,” Narkewicz said. “We were looking for other revenue sources outside of property taxes.”

No city nonprofit is officially signed to a PILOT agreement. 

“At the end of the day,” Narkewicz said, “it was voluntary — it was always known as a voluntary program.” 

He added: “It was not as fully successful as I had hoped.”

Greta Jochem can be reached at gjochem@gazettenet.com.




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