NU resumes Boston payments

Did Mayor Walsh play hardball?

NORTHEASTERN UNIVERSITY STOPPED making in-lieu-of-tax payments to the city of Boston last year, but now the school is back on board, possibly because of some hardball tactics by Mayor Marty Walsh.

In 2011, Boston revamped its program for issuing bills to larger nonprofits to help cover the cost of city services. In the program — known by the acronym PILOT, for payments in lieu of taxes — the payments are voluntary because nonprofits are exempt from property taxes. Some nonprofits paid all of what the city said they owed and many paid at least a portion of the amount.

Northeastern paid $886,000 to the city in 2013, just over half of its $1.7 million bill. In 2014, the university stopped making payments, with a spokeswoman noting the decision coincided with the election of Walsh. “A new administration is a reset moment,” Northeastern spokeswoman Renata Nyul said.

City officials said Northeastern recently mailed them a check for $886,000 for 2014. The check represented about 35 percent of the city’s $2.5 million bill for last year. Neither Walsh spokeswoman Bonnie McGilpin nor Nyul would explain what prompted the shift by Northeastern.

Larry DiCara, a former member of the Boston City Council, said he thinks Northeastern probably realized it wouldn’t be wise to halt in-lieu-of-tax payments to Boston at a time when the university needs city approval for various initiatives.

“I suspect that there was something that Northeastern wanted related to its master plan for development that is in the hands of the Boston Redevelopment Authority,” said DiCara, an attorney with the law firm of Nixon Peabody.  “So they paid a visit to City Hall.”

The PILOT program has become an important funding mechanism for Boston, which is tax-constrained because more than half of the property in the city is owned by nonprofits and government bodies, both of which are exempt from property taxes. Boston’s new initiative is bringing in more revenue overall for the city, but some of the nonprofits are paying a declining percentage of what they owe because they are being asked to pay more each year. There has also been an increase in the number of nonprofits paying nothing at all.