Syracuse University, the largest owner of tax-exempt property in the city of Syracuse, has agreed to help its struggling hometown pay for municipal services with a deal worth $2.5 million over the next five years.

Under the voluntary agreement negotiated by Mayor Stephanie Miner, the university will pay the city $500,000 annually from July 1 through June 30, 2016.

The agreement was one of three negotiated between SU and the city shortly after students left for the summer break. The university also agreed to an extension of a 1994 agreement in which SU gives about $368,000 per year to the city, which is then distributed to East neighborhood groups. The agreement, originally for 20 years, has been extended through June 30, 2016. 

The other part of the package is the city’s contract to provide police officers during events at the Carrier Dome. Similar to the controversial contract that expired last year, the new deal calls for the city to pay the first $150,000 per year for officers who provide traffic control. SU then picks up costs after that. The agreement also will last through June 30, 2016. 

Kevin Quinn, SU’s senior vice president for public affairs, said the new Carrier Dome services agreement is closer to an extension of the old contract, as the new deal does not feature any major changes. Like the old contract with the city, SU must provide the city with an estimated attendance for every Carrier Dome event, which the city then uses to approximate how many police officers to assign. After the event, the university gives the city the actual attendance.

The Common Council unanimously approved all three agreements June 20. 

Though the $500,000 annual payment is not currently earmarked for anything specific, the Common Council’s agenda from June 20 says the money is for ‘infrastructure improvements.’

Because SU has tax-exempt status as an educational institution, the university is not legally obligated to pay property taxes. Still, SU’s real estate holdings are approximately $630 million, said David Clifford, the city’s assessment commissioner. But if the property were fully taxable, the university would pay about $24 million per year, he said. 

About 51 percent, or $3.8 billion, of the city of Syracuse’s total property base of $7.5 billion is tax-exempt property, Clifford said, adding that he thinks the $2.5 million agreement with SU is a good example that other nonprofits will hopefully follow. 

Clifford said the heavy presence of tax-exempt nonprofits in the city is both a ‘blessing and a curse.’

‘It’s a blessing in the fact that we have these facilities located here in the city — these educational institutions, these medical facilities,’ he said. ‘They’re obviously big employers; they’re economic engines for the city. But on the other hand, it’s also a burden as far as providing city services to large property owners that don’t really pay any property taxes.’

Eric Spina, the university’s vice chancellor and provost, said the agreement to pay the city $2.5 million over five years can be attributed to SU’s expanding presence beyond campus and into the city. 

‘Our activities and our footprints were causing the city to incur a level of expense that was really unfair for them to do alone without some support from the university,’ Spina said. ‘Many more faculty and many more students are engaged in projects in the city and this is simply a reflection of what we think is a fair approach.’

Spina said the deal came together easily through a series of conversations with Miner, as the mayor did not make a specific monetary demand. 

‘There was never any time when the mayor said, ‘OK. It’s time to roll up our sleeves, and I want X dollars from you because you’re now demanding more services,” Spina said. 

The mayor’s office could not be reached to comment. 

The new $2.5 million services agreement will also help offset some of the costs the city incurs by providing traffic control at Carrier Dome events, said Common Councilor Ryan McMahon. 

The city will still pay $150,000 a year for police services at the events, but the $500,000 annual payment from SU will leave the city with $350,000 to help balance the cost of public safety and aid in the upkeep of roads and other infrastructure expenses, said McMahon, who calls the expired Carrier Dome agreement a ‘joke.’

‘We saved the city a lot of money, and we got a fair deal with the university now, and we’re going to use that as a blueprint to go to other nonprofits to set up these service agreements,’ said McMahon, chairman of the Common Council’s Finance, Taxation and Assessment Committee.

jdharr04@syr.edu

Published on August 22, 2011 at 12:00 pm

Contact Jon: jdharr04@syr.edu