WORCESTER — Residents could face a ballot question asking if city colleges and universities should be required to invest 0.5% of their endowments annually into a community impact fund to help pay for city needs.
The City Council greenlit the question unanimously April 15 amid recent concerns about property acquisitions by local schools in recent years “with little or to no advanced notice to the city,” as District 2 Councilor Candy F. Mero-Carlson said at the meeting.
“This is in no way a slight to anyone of our colleges and universities,” said Mero-Carlson. “This is about how (the purchases) translate into 1.8 mill in terms of tax revenues…that we have lost.”
She added: “At the rate that this is going, this city can’t sustain what’s happening with our colleges and universities.”
Mayor Joseph M. Petty, who was the other initiator of the measure, with Mero-Carlson, called the proposal “a really good idea.”
“It’s not a tax,” Petty said. “You’re asking for an investment in the future of the City of Worcester.
“Our colleges and universities are a real asset for the city. We probably wouldn’t be here today without the colleges and universities with us.”
Recent properties that have been acquired by city colleges include the purchase of the former home of Rotmans Furniture by the College of the Holy Cross in partnership with Madison Properties for $7.95 million.
In August, Worcester Polytechnic Institute controversially moved to buy two hotels at Gateway Park for $46 million and in May 2024, the Massachusetts College of Pharmacy and Health Sciences purchased a row of historical properties in a block bound by Belmont and Lincoln streets for $6.75 million.
The total endowment of Worcester’s five private colleges and universities was estimated by Mero-Carlson and Petty, in a statement on April 4, to be about $3.88 billion.
“It would bring $19 million annually that could be invested in worthy local economic and community development projects,” Mero-Carlson and Petty’s statement read, “as well as needed new housing that creates jobs and economic expansion within the city and still provide the colleges with a return on their investment.”
But despite the unanimous approval, councilors such as District 3 Councilor George J. Russell and District 4 Councilor Luis A. Ojeda raised concerns about whether the adoption of the question at the ballot box would have any legal teeth.
City Solicitor Alexandra H. Kalkounis clarified for the council that even if the question were to pass in November, the investment would have to be negotiated with the institutions as the city “would not be able to require the colleges to invest part of their endowment.”
“The people of this city are so tired of the colleges not contributing at the level that they should be and that they are in other communities,” Russell said. “But the reality is that even if it’s voted unanimously at the ballot box, we can only ask.”
District 5 Councilor Etel Haxhiaj, who spoke in support of the proposal, asked City Manager Eric D. Batista whether he had discussed the proposal to the presidents of the colleges, to which he said the reaction had been “shock and frustration.”
The endowment investment that the question asks for is not to be confused with payment in lieu of taxes (PILOT) agreements, through which the city receives funds from non-profit institutions that don’t pay property taxes, such as colleges and universities.
However, councilors did bring up PILOT agreements during the meeting, with Russell drawing a parallel with the City of Providence, which in October 2023 brokered a $223 million PILOT agreement with its four colleges over the next 20 years.
Although supportive of the proposal, Vice Chairman Khrystian E. King raised concerns with the timing of the question with the PILOT agreement negotiations in Worcester and possible federal funding cuts by the Trump administration.
Batista said that he has been building relationships with local institutions’ presidents over the past two years to “bring them to the table.”
“I do have a concern about chilling the relationship between this body the administration and the schools,” King added further.
King’s concerns were echoed by District 2 Councilor Jennifer Pacillo, who showed worry about fraying the relationship between the city and the colleges.
A motion by King to send the proposal to the Standing Committee on Municipal and Legislative Operations for “a deeper dive” into the proposal failed in a 6-4 vote.
Councilor-at-Large Kathleen M. Toomey backed the proposal, saying “we’re at a pivotal point in time at our financial concern for our residents.”
“If I were on the board of trustees of one of these colleges, I would want it to be part of our mission: ‘How do we merge and meld the mission of the institutions of higher learning with the needs of our community?’” Toomey said.
The proposal was adopted on a 10-0 vote. Councilor-at-Large Thu Nguyen was not present.
Other orders related to the topic were sent to Batista’s desk, including one by Mero-Carlson and Petty urging the city manager to establish resident representation on city college and university boards, with representatives to be appointed by the city manager with approval by the City Council.
“The thought that we have over 300 board members sitting on our colleges and universities and there’s six individuals from the City of Worcester I think that speaks volumes,” Mero-Carlson said. “It’s important for us to have a seat at the table.”
This article originally appeared on Telegram & Gazette: Worcester councilors say city deserves a piece of college endowments