In budget crisis, eyes turn toward Endicott

BEVERLY — With its scenic oceanside location, $25 million endowment and $100 million in new buildings over the last 10 years, Endicott College looks like the picture of economic health.

Meanwhile, the city it calls home just closed a school and eliminated 30 jobs due to budget problems.

The contrast between a struggling public school system and a thriving private college has come into sharp relief in recent weeks. Speakers at public hearings have wondered why an institution that pays no property taxes on prime real estate cannot contribute more to the city. The City Council is forming a committee to investigate whether Endicott and other nonprofits should pay more.

"There's starting to be momentum to do something," said Willow Street resident Toni Musante, who has advocated for years for Endicott to contribute more to the city. "The people know (Endicott) can't just be sitting by while everyone else is suffering."

Endicott College President Richard Wylie has heard the rumblings and admits he gets "a little discouraged and frustrated" when his school becomes a target.

Endicott has an agreement — referred to as a PILOT, or payment in lieu of taxes — to pay the city $43,393 in cash every year. That payment will increase to $110,000 in December, according to the college. Included in that figure is a $25,000 donation that Wylie said equals the property taxes the city is losing on a piece of land the college recently purchased.

The numbers can be dizzying, but Wylie says the public doesn't fully understand how much the college contributes to the city, not just in direct cash payments but in many other forms. That list includes everything from money spent by its students, employees and visitors — $5 million in Beverly, $19 million on the North Shore, according to the college — to the $250,000 it pays the city in construction fees.

Wylie also spoke philosophically about the role of nonprofit institutions and the reason they are tax-exempt in the first place. If there were no private colleges, he said, taxpayers would have to foot the bill for even more public colleges to accommodate the overflow.

"We literally save the taxpayers a lot of money," he said. "If we had to create double the public institutions in Massachusetts because we weren't here, imagine what would happen."

The college's critics, however, point to the fact that Endicott is no longer an entirely nonprofit operation. The college has built an inn and a conference center and rents out an oceanside estate for weddings.

"I feel they should step up to the plate and pay taxes on their revenue-producing activities," Musante said.

Wylie said the college does pay taxes, including state room taxes on the inn and income taxes on business profits.

"For anything like a wedding, we end up paying taxes," he said. "There's a lot of misinformation out there."

But the college does not pay local property taxes, and that's the issue that grates on some residents. Endicott's 230 acres, much of it on the ocean, is assessed at more than $130 million, according to the city assessor's office. If it were a private business, Endicott would pay more than $2 million per year in property taxes, making it the highest taxpayer in the city.

No one expects that to happen, but some communities do assess partial property taxes on nonprofits when those organizations slip over to the profit-making side. Salem Assessor Frank Kulik said he assesses property taxes on a "prorated" basis to nonprofits like the Peabody Essex Museum, The House of the Seven Gables and the Knights of Columbus when they rent out their buildings for weddings.

Kulik said he didn't know how much those nonprofits end up paying in property taxes, but he did say it's not much.

"If you get $5,000 rent for a day, 3 or 4 percent in real estate tax for the day is nothing," he said.

Beverly City Councilor Judith Cronin, who came up with the idea of forming a PILOT committee, said the group will research successful programs in other communities and wants to work cooperatively with nonprofits.

Cronin said the committee will be talking to all of the city's major nonprofits, not just Endicott College. North Shore Music Theatre and Montserrat College of Art make voluntary annual payments of $30,000 and $15,000, respectively. Beverly Hospital does not have a PILOT agreement, but it is still the city's 17th largest taxpayer, at $173,000, because some of its property, such as doctors' offices, is taxable.

Beverly formed a similar committee 10 years ago and got few results. Musante, who served on that committee, thinks there's a better chance of success this time around.

"The political will was missing before," she said. "Now we're in such dire straits, the public eye is on it more."

Photos

Endicott College recently opened an inn and conference center on its campus. Staff photo

Endicott College students walk along campus during a break from classes. File photo