[This payment in lieu of taxes is TINY. I should look into the Cambridge City Council next. Cambridge City Manager Yi-An Huang ’05 is a Harvard grad. Conflict of interest? Trump's tax on Harvard's endowment is imminent.]

Harvard Agrees to a 1-Year $6 Million PILOT Agreement With the City of Cambridge

March 2025

Harvard University has agreed to voluntarily pay the city of Cambridge $6 million without committing to a long-term amount for the Payment in Lieu of Taxes program, citing federal funding uncertainties.

The announcement eases pressure on the city and Harvard to reach an agreement before the current contract expires in June for a program that represents goodwill between two institutions whose interests and history are closely intertwined.

But the University’s reluctance to make even a small financial commitment to the city in the long term was also a sign of the anxiety driving its spending decisions.

In response to recent federal funding uncertainty, Harvard implemented a temporary freeze on all hiring and denied waitlisted students across all Graduate School of Arts and Sciences programs.

The $6 million payment represents a slight increase from what the University has been paying Cambridge annually as part of the PILOT, from around $4.7 million in the most recent year.

In a letter to the Cambridge City Council, City Manager Yi-An Huang ’05 stressed that federal funding uncertainty for Harvard and the short deadline contributed to the one-year agreement as opposed to a 20-year long-term agreement.

“As the Council is aware, we are seeing an unprecedented shift in federal policies that has created significant uncertainty for universities,” Huang wrote. “In this context, the City and Harvard have agreed that it would be difficult to finalize a long-term PILOT agreement in time for the upcoming fiscal year.”

PILOT programs are agreements by large nonprofit institutions to pay the city a fraction of what they would otherwise hand over in property taxes. Many cities depend on property taxes to fund their budgets, but the often significant landholdings of nonprofits like universities, hospitals, and museums are tax-exempt — eating into the city’s revenue.

The city began renegotiating its current PILOT contract with Harvard two years ago in hopes of a higher annual payment, citing the near-doubling of Harvard’s endowment since the contract was first signed in 2004. But negotiations have dragged on extensively since that time, most recently failing to reach a year-end deadline set for 2024.

https://www.thecrimson.com/article/2025/3/28/pilot-agreement-cambridge/