, Salem, MA

December 16, 2013

Selectman wants Prep to contribute in lieu of taxes

Thorny issue in Danvers, where school has strong ties


---- — DANVERS — Selectman Bill Clark says Danvers should seek a voluntary payment in lieu of taxes from its largest landholder, St. John’s Preparatory School, to help pay for services such as street paving, snow plowing and emergency response.

“They are the largest landowner in Danvers,” Clark said of St. John’s Prep, which has more than 175 acres, “and their property is probably worth the most of any outside the mall. And, yet, they don’t pay a thing.”

Clark also hopes to seek PILOT — payment in lieu of taxes — agreements with other large nonprofits in town.

Clark said that he has been a longtime, outspoken proponent of seeking a voluntary payment from the Prep, a Catholic day school for boys, but said there has been strong push-back from those with ties to the more than 100-year-old school.

“We just have to look at diversified revenue, because they are a big impact on the town,” said Clark, who added that he has no interest in pursuing payments from churches or synagogues that may be struggling.

St. John’s Prep is an Xaverian Brothers-sponsored school with 1,150 students from more than 80 communities. Tuition is $19,950 a year, and roughly a third of students receive need-based tuition assistance, said Elizabeth Forbes, managing director of marketing and communications for the Prep.

Its property includes holdings of the American Northeast Province of the Xaverian Brothers, according to the assessors office. The 177.83 acres have a combined assessment of $28 million.

If taxed at the commercial rate, the Prep would be paying about $585,000 in taxes. Because it is a nonprofit educational and religious institution, however, it is exempt from taxes.

The town has no plans in the near future to implement a townwide PILOT program for tax-exempt entities, a notion that selectmen rejected three years ago, Town Manager Wayne Marquis said.

But Clark brought up the issue as part of a discussion last week about the town’s budget policy for the upcoming year. The town has not developed a PILOT policy, but Marquis said the town would seek opportunities for them as they arise.

“In most cases, nonprofit entities — the YMCA, churches, St. John’s Prep, private schools, what have you — are exempt, and there is no requirement we can impose on them to pay to us,” Marquis said.

Still, many cities and towns are seeking contributions from large nonprofits as municipal budgets are squeezed. Salem, for example, negotiated payments from Peabody Essex Museum, Salem State University and Northeast Animal Shelter when those nonprofits purchased formerly commercial properties that would have been lost to the tax rolls.

Communities like Boston, Cambridge and Brookline have PILOT policies with formulas to figure out what a nonprofit entity should contribute based on its demand for services, Marquis said. In most cases, it works out to be “25 cents on the dollar,” he said, when it comes to covering costs of the services they use.

But such agreements are “strictly voluntary,” he noted.

Danvers has PILOT agreements with the owners of two large medical facilities. Partners Healthcare, which owns the Mass General/North Shore Center for Outpatient Care on Endicott St., paid the town $93,249 last fiscal year, according to Chief Assessor Marlene Locke. At its assessed value of more than $74 million, this property would have generated $1.5 million in property taxes.

Northeast Hospital Corp. paid Danvers $37,324 for the Lahey Outpatient Center on Maple Street. At its assessed value of nearly $27.3 million, the facility would have generated almost $552,000 if taxed commercially.

“We now receive a considerable amount of money annually, and those amounts go up each year as a result of voluntary PILOTS that we negotiated with those institutions,” Marquis said.

Over the years, St. John’s Prep has contributed in other ways, including serving as a polling place for voters until a few years ago, when the town decided to consolidate polling places.

“We value our relationship with the town of Danvers,” said Edward Hardiman, headmaster of St. John’s Prep, in a prepared statement. “We’ve always worked closely with town officials, and we are committed to being a positive presence in the community.”

Danvers Youth Soccer uses the field at Brother Linus Athletic Commons in the spring and summer, and Danvers High’s theater program used the school’s auditorium while Danvers High was under construction in recent years. The school has collaborated with Danvers High faculty on professional development programs. And the Prep’s campus serves as the evacuation site for Smith Elementary School, which is near the campus.

In the past, the Prep’s facilities have been used for such events as a firemen’s ball, a location to take police promotional exams and the annual Hospice Walk. Forbes said the school is willing to entertain requests from the community to use its facilities.

“If we are asked, and if we can do it, we will,” she said.

Students also contribute volunteer time, visiting residents of Putnam Farms Senior Living on Summer Street and volunteering for Northeast Arc, which serves people with disabilities. Proceeds from concerts by the Prep singing group Swingtown! benefit the Danvers People to People Food Pantry.

But Clark said the town could use money. And with the Prep’s planning to add a middle school, he thinks the school should help pay for a traffic light at the busy intersection of Summer and Maple Streets (Route 62).

“I think it’s time they step up a little bit, especially if they are going to expand and put another school up there,” Clark said.

Still, it’s not an easy issue in town, where the Prep has many ties — ties that reach even to the Board of Selectmen.

“I’m afraid of the issue because I love that place; it’s my school,” said Selectman David Mills, an alumnus of St. John’s.

He feels conflicted speaking about it, he said, but added that “St. John’s is not a money-making entity.”

Unlike hospitals that often act more like for-profit entities than nonprofit ones nowadays, Mills said, “The Prep has no endowment. The Prep is a genuine nonprofit.”

Staff writer Ethan Forman can be reached at 978-338-2673, by email at or on Twitter at @DanverSalemNews.




Other large tax-exempt landowners in Danvers Annuciation Cemetery on Hobart Street (27.9 acres) Danvers Alarm List Company and its cemetery (26.3 acres) Walnut Grove Cemetery on Sylvan St. (25 acres) Sons of Jacob Cemetery on Buxton Road (two parcels, 17.7 acres) New England Homes for the Deaf on Water Street (16.1 acres) Danvers Historical Society's Glen Magna Farms on Ingersoll Road (11.2 acres) Discalced Carmelite Nuns on Mt. Carmel Road (11.4 acres) Roman Catholic Archbishop of Boston/St. Richards Church on Forest Street (11.21 acres) Temple Sinai Memorial Park (8.6 acres) Source: Danvers Assessors Office