“Hard-won progress:” Town-gown contribution plan sparks hope, apprehension
On the heels of its $11.1 billion endowment growth, Yale agreed to increase its voluntary contribution to New Haven by $52 million over six years. Still, alders’ reservations remain regarding agreement “loopholes.”
On April 4, the Board of Alders voted to grant final approval to a historic new agreement between Yale and New Haven, which will increase the University’s voluntary contribution by $52 million over the next six years.
The deal came after years of activism by local unions and community organizations which demanded that Yale contribute more to its home city. In addition to the increased contribution, the deal includes provisions for a new Yale-funded Center for Inclusive Growth, the conversion of a portion of High Street into a pedestrian walkway and a commitment by Yale to offset all city revenue lost on buildings taken off the tax roll.
The new six-year agreement between Yale and the New Haven government was first announced at a press conference last November.
“Yale and New Haven have a bond that has been tested by time and strengthened by shared purpose,” University President Peter Salovey said in a press release. “As a New Haven anchor institution and the city’s largest employer, the university is proud to do its part in building a community that creates sustained inclusive growth across every neighborhood in the city.”
Yale’s total voluntary contribution over six years will be $135.4 million, starting with the 2022-23 fiscal year. The commitment followed last October’s news that the University’s endowment had increased by $11.1 billion to a total value of $42.3 billion in the 2021 fiscal year. At the same time, the city projected a budget deficit of $66 million for the fiscal year 2021-22 before it received additional funding from the state and Yale.
City officials and advocacy organizations have long called on Yale to increase its voluntary payments to the city. The “Yale: Respect New Haven” campaign in October pressed the University to pay the full amount of the tax break it receives for its nonprofit status.
The University previously paid $13 million in annual voluntary contributions to its home city. Under this new agreement, Yale will add $10 million per year to its voluntary contribution for the next five years and $2 million in the sixth year. The expected voluntary contribution for the current fiscal year will be $23.2 million, according to a press release.
Negotiations for the details of the agreement started in 2020 and took more than a year, involving a large team of officials from the city and the University. Elicker said the “real lively dialogue” during the negotiations has helped build trust and understanding of each other’s goals and set the stage for future collaborations.
In addition to the specifics of the voluntary contribution and Yale’s property tax exemptions, both sides also focused on how to address long-term issues of inequity in the city. Henry Fernandez, head of the city delegation in joint negotiations with the University, said the work of the newly-created Center for Inclusive Growth could make progress toward this aim.
Kerwin Charles, dean of the School of Management, will preside over the new center, in which a committee of university, city and community leaders will develop initiatives to grow New Haven economically. Yale will invest $5 million a year in the center for the first six years of its life, in addition to its main voluntary contribution increase. University President Peter Salovey said in November that the Center’s programming will be designed to guide “the problems and challenges of urban centers like the city of New Haven in the current age.”
Regarding the proposed Center for Inclusive Growth, Ward 10 Alder Anna Festa noted that the finance committee had not yet received a “rough draft” of the plans, as of April 4. She emphasized that members of the Board of Alders and other city leaders should be included in the decision-making process for the new center.
Although the Board of Alders voted unanimously in favor of the new deal between Yale and the city, some shared reservations about what the future of the town-gown relationship will hold. Five alders spoke in support of the deal at the meeting, although almost all expressed that it is only a first step toward an ideal financial agreement — and a hard-fought one at that.
“The city can use the money, so I’m glad for the cash and grateful to the people who made it happen,” Festa said. “But it’s also upsetting that we must always wheel and deal like this … I feel like our hands get tied when dealing with these types of negotiations. And it’s a take it or leave it type of situation.”
In her speech to the board, Festa shared her concerns about the “loopholes” and unanswered questions in the deal as it currently stands. She said that she was troubled by a lack of clarity regarding what will happen after the set term of the deal is up, “because we still need the money after six years.”
Festa warned of a reversal after the six years back to Yale’s pre-agreement contribution of $13 million annually. That figure increases by $10 million for the first five years and only $2 million in the sixth, and the contribution policy ends after six years, both of which are of concern to Festa.
In response to complaints regarding Yale’s voluntary contribution, University officials have said that Yale’s voluntary payments already were more significant than those of its peer institutions prior to this new deal.
Other alders spoke on the importance of continued activism and collaboration to ensure Yale continues to contribute to the city beyond the six-year scope of the commitment.
Ward 22 Alder Jeanette Morrison, whose ward includes both Yale properties and permanent Dixwell residents, shared that, despite its flaws, this agreement is central to her goal as a city leader to “close the gap between this town and the University.”
“I’m a lifelong resident, 54 years old, and there’s always been the unsaid rule that Yale individuals and city individuals should not involve themselves with one another,” Morrison said. “So to see something like this happen, to see that the University sees the importance of the city … is definitely a step in the right direction.”
Another crucial component of the deal is the conversion of the block of High Street between Elm and Chapel Streets, which passes by Old Campus, into a pedestrian walkway. These renovations will be funded by Yale, but the street will remain under city ownership as a public space.
Ward 25 Alder Adam Marchand reported community feedback from the March 14 finance committee meeting on the deal. Marchand said that the public wants clear communication from the city and University to ensure the “proper implementation” of all components of the deal. Overall, Marchand said, residents urged approval of the commitment, which they saw as “hard-won progress” by community activists.
Yale’s tax-exempt properties in New Haven were recently valued at $4.2 billion.