Karen Lin, Senior Photographer

Over the past year, Yale and the city of New Haven have worked to cement key components of their landmark voluntary contribution agreement, which aims to create a more equitable town-gown relationship.

Approved by the Board of Alders in April 2022, the city-University deal includes a sharp boost in Yale’s voluntary payments to the city over six years, as well as additional funds to offset revenue lost from Yale’s tax-exempt property. Yale has also committed to the creation of the Center for Inclusive Growth and the conversion of High Street into a pedestrian-only community space. These initiatives came as the product of long term negotiations between Yale and the city government, as well as persistent advocacy efforts by community members and local social justice organizations.

In the ten months since the plan was officially adopted, Yale has completed two annual payments to the city and made some headway in planning the Center for Inclusive Growth in collaboration with city leaders. Progress on other aspects of the plan, however, remain unclear.

“We’re working more collaboratively together, which I think is an additional benefit to the pretty difficult process that it took to get to an understanding,” New Haven Mayor Justin Elicker told the News. “From the city’s perspective, we work very hard to ensure that we grow inclusively and equitably, and there’s a lot of different programs that we have invested in to ensure that that happens.”

Some activists and city government officials have still insisted that Yale do more to contribute to the city in the wake of the deal, calling it only a first step given that several areas of the city still suffer from historic disinvestment and wealth disparities.

Abby Feldman, who is a member of community organization New Haven Rising, spoke in support of further improvements to address these problems.

“The University could take an immediate next step by putting more priority on hiring local and ensuring residents have access to good union jobs,” Feldman told the News.

In the past, Yale has put forth hiring initiatives to recruit employees from the city, with mixed results. In 2015, the University vowed to hire 1,000 residents, including 500 New Haveners from underserved neighborhoods, by the end of 2019; Yale met the goal two and a half years after this deadline. Meanwhile, the University has not addressed the News’ 2022 inquiries into whether another goal — ensuring construction contractors hire at least 20 percent New Haven residents on projects — has been met on recent and upcoming builds.

Increases in Yale’s financial contribution to the city 

The University agreed to increase their existing annual voluntary payments of $13 million to $23 million for the first five years of the plan. Yale’s actual contributions under the new plan exceeded those anticipated, totaling $23.2 million and $23.7 million in fiscal years 2022 and 2023, respectively. 

According to Elicker, the city received more in payments because the University’s contribution is based on calculations that took factors like the city fire budget and number of beds at Yale into account. The funding, he continued, has allowed New Haven to stabilize its finances after facing a “fiscal cliff” two years ago. 

The state’s Payment in Lieu of Taxes program also increased its reimbursements of city tax-exempt properties from a 26 percent to a 50 percent rate in 2022, giving New Haven an extra $49 million in funding. 

The mayor’s proposed budget for fiscal year 2022 planned for two possibilities — a “Crisis Budget” that would have been adopted if Yale and the state had not increased payments and a “Forward Together Budget” prepared in the case they did. The latter was ultimately adopted, with some adjustments. 

“If we had not received the additional Yale funding and a dramatic increase in state funding, we would have had to dramatically cut a lot of programs that are important to the community,” Elicker told the News. “The Yale funding and the state funding have worked to address the underlying historical financial challenges that the city faces.”

The Crisis Budget would have had a “disastrous impact” on the city, the proposal read. It included the closure of a library, firehouse and senior center; numerous public sector employee layoffs; the elimination of vacant job positions and a 7.75 percent property tax increase on residents.

Lauren Zucker, associate vice president and director of New Haven affairs at Yale, noted that since fiscal year 1991, Yale has contributed over $199 million to the city.

“These payments reflect Yale and the City of New Haven’s historic partnership and continues to represent the highest single voluntary payment from a university to a host city anywhere in the United States,” Zucker told the News.

During the sixth year of the plan, added payments will drop to $2 million, and it is unclear what future contribution totals will look like. Elicker told the News that he can guarantee that the city and University will have “lots of conversations well in advance of that last year.”

Ward 1 Alder Alex Guzhnay ’24 told the News that he and his colleagues have agreed it is important to be proactive, “pushing” Yale to contribute more to the city in the future instead of letting the deal “run its course.” 

Beyond these contributions, Yale agreed to help offset lost tax revenue through a declining scale of payments for any new tax-exempt properties. In this system, Yale will contribute the full amount of money that would have been paid in taxes in the first three years after purchase. In the fourth year this figure will then drop to about 90 percent of the lost tax value, followed by continuously declining payments until the 13th year post-purchase.

As a nonprofit university, Yale is exempt from paying real estate taxes for its academic properties, resulting in significant losses of revenue for the city as the University expanded holdings throughout its history. Elicker said he did not know whether Yale had moved any significant properties off of the city tax roll since the agreement was signed, but that some small holdings may have been purchased. 

Yale’s impact on the city budget has long been a point of contention for activist groups and some government officials, with the “Yale: Respect New Haven” movement even developing a calculator for residents to determine the tax break they would receive if Yale paid full property taxes. 

Feldman emphasized that increasing Yale’s contribution to the city will help address decades of “segregated development.” She detailed the impact of redlining on the city’s most disadvantaged communities today.

“Establishing a strong partnership between the city and Yale is one of the most important ways that we can overcome challenges created by this history,” Feldman told the News. “Yale’s revenue deal is an important first step towards establishing this partnership, but much more needs to be done.”

High Street construction and the Center for Inclusive Growth 

Another aspect of the deal involves converting High Street into a pedestrian-only walkway managed by Yale. It remains unclear how far that plan has progressed. In her statement to the News, Zucker did not address inquiries about the status of the conversion plan, but Elicker said that the city anticipates receiving a design submission in the future. 

Guzhnay told the News that he expects the City Planning Commission to review the design once Yale submits it, opening it up to public input. Potential concerns, Guzhnay said, may include a loss of popular street parking spaces and parking meter revenue.

Meanwhile, University and city leaders have shared more about the status of the Center for Inclusive Growth, which seeks to promote social and economic development among the city’s diverse communities. School of Management Dean Kerwin Charles, who is helping launch the Center, told the News that he and other Yale community members involved have spent the past months collaborating with city residents to discuss the Center’s structure and early project plans.

“I have been in conversation with a wide range of New Haven constituents, including community leaders, elected officials, invested residents, and curious students seeking to identify concerns for residents and ensure the Center’s efforts are inclusive and collaborative from inception to implementation,” Charles wrote to the News.

Two weeks ago, Charles spoke with New Haven residents at an event on “Economics and the Black Community,” emphasizing partnership between the University and city. He also outlined specific goals to connect Black local residents with economic and career opportunities that their communities have traditionally been denied.

Charles told the News that community issues that have been discussed thus far often involve race and class inequality, as well as the impact of the pandemic.

“In New Haven, economic growth is not distributed equitably,” Charles wrote. “How can we better understand these economic problems and their root causes? What is holding back inclusive growth? That is where the Center must target its efforts.”

Charles said that the Center’s planning team will announce more specific information on its initiatives and next steps soon. Additionally, Elicker shared that a job listing for the new center’s director will be posted “in the very near future.”

Elicker said that the city aims to address the needs of underserved communities through its involvement with the Center. He hopes that the complete deal between the city and University will positively impact the lives of individual residents and families.

“The most important thing is that people see that it benefits their lives directly,” Elicker said. “That there are more people in New Haven that previously didn’t have the economic capacity to own a home that now do; more people in New Haven who have long term, good-paying jobs.” 

Yale’s endowment for the 2022 fiscal year stood at $41.4 billion.

Correction, Feb. 8: A previous version of this article mischaracterized the Center for Inclusive Growth as a School of Management-run initiative spearheaded by Dean Charles. The article has been updated to reflect that Dean Charles and the SOM are involved in the Center’s creation, but that they will not manage the Center itself.