Our City’s PILOT agreements with Private Colleges and Universities 

In 2023, the Smiley Administration signed a Memorandum of Understanding (MOU) between the City and Brown University, Providence College, Johnson & Wales University, and the Rhode Island School of Design. The mayor touted these agreements as major wins for the city, not only for the voluntary payments made to Providence but for the universities’ “community contributions,” which are meant to represent in-kind contributions. Smiley boasted that the payments and contributions totaled $442 million over the lifetime of the agreement.

Unfortunately, the fine print tells another story. The agreements are underwhelming, make excessive concessions to the universities, and position the city as a weaker negotiating partner. 

The voluntary payments do help the city’s budget, but not to the extent they could. Yes, they’re better than what had been agreed upon in the last such MOU from 2003 since the universities owned less property then. Brown’s payment under the 2023 agreement is just a third of what Yale University offers its home city, New Haven.  Under the 2023 agreement, as well, the four universities pay only about 8% of what they would otherwise pay in taxes.

The 2023 agreement has also erased one of the preceding agreement’s strengths for Providence. In 2003, Mayor Cicilline negotiated for the inclusion of “transition parcels,” that is, a designation placed upon property recently purchased by a university and classified as non-exempt. When a university purchases property, rather than immediately removes that property from the tax rolls, it “transitions” off the tax rolls over time. For example, for the first five years after a sale, the city was paid 100% of the property tax it would have been due. This designation helped reduce the financial shock of losing a property from the tax rolls.

Arguably worst of all, Section 7 of the MOU prevents the city from requesting any additional funding. So long as the universities agree to abide by the MOU’s rules, the city cannot ask for additional financial support of basically any kind, from increased voluntary payments to public space improvements or even to PVDFest sponsorship. 

Finally, the MOU promised bi-monthly quality of life meetings between the city and the universities to address resident concerns. Yet these meetings are neither publicized nor documented, so it’s not even clear if they even happen. The purpose of community engagement is to engage the community, after all, not to keep everyone in the dark. The MOU states that the city will publish a “summary of accomplishments” in regard to these meetings “in the annual reporting of community contributions.” That does not seem to have happened.