City Council voted in favor of two voluntary payment agreements between nonprofit colleges and Providence Thursday night on a 9-1 voice vote. Through these agreements, Brown will pay over $174 million to the city over the next two decades, or an annual average of $8.7 million before potential deductions.
The University’s two previous agreements with the city expired in 2022 and 2023.
Nonprofit universities, including Brown, do not pay property taxes on their institutional properties. A 2022 report from the Providence Finance Department estimated that Brown would pay $49.3 million to Providence if all of the University’s properties were taxed at their full value.
The first new agreement is a memorandum of understanding between the city and Brown, the Rhode Island School of Design, Providence College and Johnson and Wales University. Under the MOU, the four schools will pay $177 million to Providence over 20 years, with $128.7 million from Brown. The second, a separate memorandum of agreement solely between Brown and Providence, outlines $46 million in payments to the city over the next 10 years.
Contributions from all Universities in both agreements will total $223.5 million.
These agreements set “Providence on a stronger financial path forward and (make) our city a national example of what is possible when communities and their major anchor institutions work together,” Mayor Brett Smiley said in a press release.
The agreements have drawn criticism from student activists, who believe the University should pay more to the city. Over 60 undergraduates attended a public hearing Sept. 26 to dissent against the agreements’ terms.
“I watched the University snap up properties in the Jewelry District, taking them out of the tax base, and then asking the city … to (think) $8 million a year… is enough,” Isaac Slevin ’25, Sunrise Brown hub coordinator, testified.
Students also took issue with the “Credits Against Payments Condition” stipulation in the MOA, which provides paths for the University to reduce its annual voluntary payments.
Brown can qualify for reductions to its annual MOA payments by funding or contributing to taxable development projects or selling institutional property, which would return tax-exempt property to the tax docket. For either case, reductions would be valued at 50% of the new tax revenue, The Herald previously reported.
Brown can also reduce its annual voluntary payments by the complete value of direct investments into the city. Financing development projects such as workforce housing, childcare or public parks in collaboration with the city or a private and public sector partner would qualify the University for this credit.
Brown will also acquire four city blocks through the MOA in the Jewelry District — a block on Cushing Street that was in the initial deal was not included by Thursday. The MOA also includes the extension of a parking agreement outlined in the now-expired 2012 MOA.
“I do firmly believe that this agreement is a valuable opportunity to foster a predictable but also fair and sustainable financial relationship with these institutions while promoting the continued growth of the city of Providence,” Councilor John Goncalves ’13 MA’15 said at the City Council meeting Thursday evening. Three of the four institutions — Brown, RISD and Johnson & Wales — in the MOU are in Ward 1, Goncalves’ ward.
“It is no secret that I have been very vocal about our large tax-exempt institutions paying their fair share to the City of Providence to alleviate the burden on people across our city, as things become increasingly more unaffordable,” Goncalves wrote in a message to The Herald. “We pushed internally for the best possible agreement. We didn’t get everything that we wanted and pushed for but negotiations come with compromises.”
“On a night when President Paxson discussed the importance of honest leadership with former prime minister Jacinda Ardern, Brown’s shameful PILOT deals passed through City Council,” Slevin wrote in a message to The Herald on behalf of the Brown Activist Coalition. “Instead of demonstrating principles of integrity and equity, Brown shepherded through agreements that deprive the city of funds, help the school take more land out of the tax base and limit Council’s ability to regulate Brown until 2043.”
“Amid a $3,000,000,000 capital campaign, Brown couldn’t scrounge up the dollars or dignity that our city deserves,” Slevin added.
“This agreement, while not perfect, establishes a mechanism that does forge a greater partnership with these institutions to provide, again, reasonable contributions to the greater Providence community,” Goncalves said. Goncalves commended Smiley and the four institutions for “good faith” negotiations since the spring.
“In spite of pressures to compel Universities to do more, our lack of legal authority and/or leverage do make these voluntary agreements an important step in the right direction for the taxpayers of Providence, and we couldn’t afford to squander this critical agreement. The work continues,” Goncalves wrote.
“We’re proud to have cemented Brown’s investments in the success of Providence for decades to come,” said President Christina Paxson P’19 MD’20 in a press release. “The agreements are rooted in a spirit of partnership and a commitment to helping the city and its residents thrive. We’re excited to expand significantly upon the myriad ways in which Brown makes a meaningful and positive impact in our local community.”
Additional reporting by Jacob Smollen and Sam Levine
Katy Pickens is the managing editor of newsroom and vice president of The Brown Daily Herald's 133rd Editorial Board. She previously served as a Metro section editor covering College Hill, Fox Point and the Jewelry District, housing & campus footprint and activism, all while maintaining a passion for knitting tiny hats.
