Worcester, Clark University ink PILOT agreement

Worcester in September established a payment-in-lieu-of-taxes agreement with Clark University, the third such arrangement the city has negotiated with a local college or university over the past two years.

Under the terms of the agreement, Clark will make annual voluntary payments to the city at an initial amount of about $262,000 a year, with the annual payment increasing by 2.5 percent per year over the next 20 years.

The agreement also calls on the city and the university to work together to convert a short stretch of a street in the area into a pedestrian zone, a project connected to federally funded streetscape improvements. Clark has agreed to pay an additional $1.5 million during the 20-year period in support of the project.

Clark’s total voluntary payments over the 20-year-period will exceed $6.7 million.

In late 2008, Worcester signed an agreement with the Massachusetts College of Pharmacy under which the city will receive more than $1.25 million in voluntary payments over a 25-year period. One purpose of the PILOT agreement is to help support the Worcester Public Library, which is near the college campus and often used by its students.

A PILOT agreement with Worcester Polytechnic Institute that took effect in July 2009 also is designed to support the public library. Worcester Polytech now pays more than $450,000 a year in lieu of taxes, an amount that includes $180,000 the school already was paying in real estate taxes on property that qualifies for tax-exempt status.

There are 10 colleges and universities in Worcester, as well as three other colleges in the area that have classroom space in the city. The city is interested in eventually exploring PILOT agreements with all of these schools as well as with other nonprofit institutions in the city, according to Christine Andrioli, the city’s communications director.