Doing Right by Watertown

Harvard's recent interest in buying the Arsenal on the Charles, a Watertown office complex, has justifiably startled the Watertown community. Though Harvard desperately needs space and has been constantly expanding, Watertown also relies heavily on the tax revenue from the Arsenal complex. As a non-profit organization, Harvard would be protected from paying tax on the property by Massachusets law. In fairness to the town, if Harvard decides to purchase the Arsenal, the University should negotiate a generous payment-in-lieu-of-tax (PILOT) agreement with Watertown.

According to the Watertown town website, the community stands to lose $3.5 million of its total $68 million revenue base if the property is converted to non-profit status. Needless to say, a small community like Watertown cannot afford to lose nearly 5 percent of its tax revenue in one fell swoop. The town converted the Arsenal property into a business complex in 1998 and was anticipating a large amount of tax revenue from the site, after receiving nothing in taxes from the property during its past 200 years as a military base. Without the planned revenue, the town says it will be unable to complete projects such as school and library renovations.

As it does for Cambridge and other communities in which it owns land, the University should negotiate a PILOT to compensate Watertown for this lost revenue. Though the community will receive 1.5 percent of the purchase price when the property is sold--approximately $2.5 million--the revenue is only a one-time influx of money. Harvard's offer to pay full tax revenue through fiscal year 2003 is a responsible first step, but Watertown depends on revenue from the Arsenal in the long run, not merely for the next few years.

As residents of Cambridge and other communities become increasingly unhappy with the University's actions, it would behoove Harvard to give Watertown a generous PILOT. We do not begrudge the University its space, but it is not in the University's interest to appear as a community villain rather than benefactor--especially after having recently purchased land in Allston. With Cambridge city counselors calling for increased payments from Harvard and MIT, the University must demonstrate that it is truly committed to a socially responsible position in local affairs. Harvard can afford the loss of a couple million dollars a year far more easily than a small community like Watertown.