City of Brookline officials recently made public Boston University’s acquisition of several properties through third parties or trusts. This, in turn, has Brookline tax assessor George Moody concerned BU may try to make some of these properties tax-exempt.
“All we want to do is protect what’s in town,” Moody said. “Few buildings are commercial in town, and if we lose Commonwealth Avenue, it would certainly hurt our commercial base.”
BU spokesman Kevin Carleton said he believes officials of Brookline knew about many of these properties.
“I don’t think they just found out about this. We’ve had some recent acquisitions through trust, but the tax bills always came through Boston University,” Carleton said. “When asked, we always provided information, and we will continue to provide information when asked.”
According to Carleton, there are several reasons why the buildings might have been purchased through trust or third parties. Buying through a third party or trust is a way to ensure fair market value is paid for a property. Another reason is the seller might want to retain an interest in the property in order to ensure a guaranteed income flow over a period of time. A final reason is if the buyer wanted to enter into an agreement with a corporate partner.
By Carleton’s estimate, BU currently owns or controls 36 properties in Brookline (including the offices of The Daily Free Press). Twenty of the properties are taxed in full, five are partially exempt and 11 are fully exempt. Exempt buildings are generally classified as classrooms or anything used for academic purposes.
“For the most part, we kept our Brookline buildings on the tax rolls,” Carleton said. “We could have developed a poorly planned academic use to take them off tax rolls but instead we chose not to.”
BU owns only 2.8 percent of the square footage controlled by the 14 educational institutions in Brookline, compared to the 39.5 percent owned by Pine Manor College, Carleton said.
“We are actually the highest tax payer in the town of Brookline, and provide a number of services to the town including scholarships, use of University facilities, and we pay taxes on the majority of our properties,” Carleton said.
Additionally, many of the buildings BU controls have gone up in value since the University gained ownership, Carleton said.
“141 Carlton St., which was acquired in 1993, is a great example,” Carleton said. “Close to $800,000 were put into improvements, about twice what was put into acquisition, not to mention that renovation money was spent locally and pumped into the economy.”
Where BU owns properties in Boston that are tax-exempt, they make payments in lieu of the taxes they would otherwise pay. In the fiscal year of 2002, Boston received a $3.1 million payment instead of taxes from BU. Moody is also concerned BU does not make similar payments to Brookline.
“On the buildings that are fully exempt, BU would have paid $518,253.42 in taxes last year,” Moody said. “We had a meeting in the spring with BU to discuss a payment, and we haven’t met since. There are similar agreements in other towns and with other schools.”
However, Carleton sees differences between properties in Boston and Brookline.
“Frankly we see no reason to enter into this kind of entitlement agreement. Our agreement with Boston was established over 20 years ago and the vast majority of our holdings are in Boston. These holdings are more intense in their use in terms of visitation,” Carleton said. “We contribute a great deal to [Brookline], and as of now we do not intend to convert any other buildings to tax-exempt purposes.”
If BU did choose to make all buildings switched to tax-exempt purposes, the tax increase per homeowner would be 140 dollars a year, according to Moody.