Yale Increases Annual Payments To New Haven; $52M Over 6 Years

NEW HAVEN, CT — In a joint statement issued Wednesday afternoon, Yale University and the City of New Haven "reconfirmed their historic, three-century partnership for a new generation," by announcing a six-year commitment that increases the university’s annual "voluntary financial contribution" to the city.

In a news conference at City Hall, Yale President Peter Salovey, New Haven Mayor Justin Elicker, and Board of Alders President Tyisha Walker-Myers announced the four-component partnership, calling it "nationally unique:"

• A significant increase in Yale’s voluntary payments to the City, totaling $52 million in new money over six years. When combined with Yale’s existing voluntary payments, Yale will contribute approximately $135 million to the City over this six-year period. This amount is unprecedented nationally.
• A new Center for Inclusive Growth to be established at Yale, to which Yale will contribute an additional $5 million in the first six years. The center, guided by an advisory committee that will include university, City, and community leaders, will develop and implement strategies to grow the city economically in a way that benefits all of New Haven’s residents.
• The conversion of High Street between Chapel and Elm streets into a City-owned walkway without vehicular access. Yale will provide to the City a design and then fund its renovation. Yale’s and the City’s goal is to make this a beautiful public space.
• A new commitment to offset the City’s loss in tax revenues for any properties Yale takes off the tax rolls in the next six years.

Voluntary payments

Yale will increase its voluntary payments — which currently stand at $13 million annually and are already the highest of any American university to its host city — by adding $10 million for each of the next five years and $2 million in the sixth year.

The $52 million is in addition to the current annual payments that include the annual fire services payment calculated based on the 1990 agreement, voluntary payments based on the 2005 letter and indexed at 2.5%, and additional voluntary payments provided to the City annually starting in 2019.

Taken together, Yale’s payments to the City of New Haven over this period will amount to approximately $135.4 million.

These voluntary payments usher in a new era for New Haven. The combined revenues from the state’s new Payment in Lieu of Taxes (PILOT) program, federal contributions, continued investment by the private sector, and Yale’s new commitments make possible tremendous opportunities. In the coming years, the City can build a strengthened inclusive local economy, make needed neighborhood improvements, create effective programs for young people, ensure that schools address children’s needs arising from the COVID-19 pandemic, spark entrepreneurship and small business initiatives, build affordable high-speed internet access, and combat climate change through cooperative City and Yale projects on renewable energy, sustainability, and pedestrian and bicycle access.

Center for Inclusive Growth

A new Center for Inclusive Growth, to be established at Yale, will seek to identify economic and social development initiatives that will bolster growth throughout our community. The center will benefit from an advisory committee consisting of members from the City, community, and university. Elicker and Salovey asked Kerwin Charles, the Indra K. Nooyi Dean of the Yale School of Management, to help launch this effort.

Charles is one of the world’s foremost experts on wealth inequality, race and gender labor market discrimination, intergenerational transmission of economic status, and the impacts of job loss. Yale and the City are looking forward to working collaboratively to create and build upon equitable growth strategies designed to overcome structural barriers for New Haven residents.

The center’s structure and initial projects will be developed in the coming months. Yale will contribute $5 million to the work of the center over the next six years. This amount is over and above Yale’s increased voluntary payments.

The center will do much to ensure that economic growth benefits all in New Haven, Charles said.

“I look forward to the ways in which the Yale School of Management, with its mission of educating leaders for business and society, will engage with the center’s work,” he said. “Our students and faculty are eager to contribute their rigorous thinking and passion about improving the lives of those around us to a range of projects aimed at enhancing economic development and job growth.

“Likewise, I fully expect that we as a school will learn from our partners in the community. This center will be a source of insight, experience, and knowledge for the whole Yale campus. The stronger the connection between Yale and New Haven, the more we all benefit.”

Elicker agreed.

“New Haven is experiencing significant growth at this moment and we are harnessing this growth in a way that should benefit all — through additional affordable housing, increased job opportunities, and expanded access to educational and career pathways. The Center for Inclusive Growth will build on the work our city is doing to confront inequities and build opportunities and wealth in communities of color.

“We are enthusiastic about our partnership with Yale in the creation of this center and that Yale has shown such commitment with this significant investment to start the center.”

Conversion of High Street block

The City and Yale are excited to create a new public walkway on High Street between Chapel and Elm streets. This stretch of High Street will remain a City thoroughfare open to pedestrians and cyclists but will no longer allow vehicular traffic, other than emergency vehicles.

Yale will lead the development of the design, subject to the approval of the City Plan Commission and New Haven Traffic Authority. After design approval, Yale will fund and manage the establishment and maintenance of the public space.

The partners’ goal is to create a beautiful public space that will welcome students, New Haven residents, and people from around the world.

Exempt properties

In an innovative approach that ensures Yale’s growth creates immediate value for the City and its taxpayers, Yale will voluntarily offset the City’s loss of tax revenues for any properties that Yale takes off the tax rolls in the next six years.

Specifically, for any real property in New Haven converted by Yale to tax exempt property, Yale will voluntarily pay to the city an amount equal to the amount of taxes that otherwise would have been paid for three years, and then pay diminishing amounts for the next nine years according to the following schedule.

This creative methodology works hand in hand with the state’s new PILOT program, which provides state funds to cities like New Haven so that they can fully enjoy the benefits of being home to tax-exempt non-profit charitable organizations like Yale. These two initiatives will help ensure that Yale can continue to thrive in a global arena and spur broader, long-term economic expansion in New Haven, all without affecting the City’s ability to deliver public services.

New resources

The new partnership initiatives described here are over and above Yale’s current commitments to the New Haven community.

Yale will continue its dedication to a wide variety of other efforts that invigorate the civic and cultural well-being of New Haven. These initiatives include public education and youth partnership programs such as the Yale Pathways to Science program, community investment projects, the Yale University Homebuyer program, cultural events, support of the downtown business improvement district, neighborhood projects, and significant contributions to New Haven Works and New Haven Promise. Yale’s contributions from these programs are expected to total more than $100 million during the six-year period, in addition to Yale’s new $140 million investment over that time.

Salovey, Elicker and Walker-Myers' remarks:

“Yale and New Haven have a bond that has been tested by time and strengthened by shared purpose,” Salovey said. “As a New Haven anchor institution and the city’s largest employer, the university is proud to do its part in building a community that creates sustained inclusive growth across every neighborhood in the city. New Haven is poised for accelerated growth with increased funding from the federal government, the state, and the university. New Haven’s growing population and its support for innovation, as evidenced by new developments such as 101 College and burgeoning residential, commercial, and research space, will continue to position the city for a bright future.”

“This is an historic moment for the relationship between the City of New Haven and Yale University. Yale has contributed in many ways to the city, but with today’s announcement, Yale has committed to contribute more financially over the next six years than it has over the last twenty combined. This funding, in addition to the creation of the Center for Inclusive Growth, will help the City make more investments in the New Haven community, continue to stabilize our financial footing, and improve opportunities for residents. For years people have been calling on Yale to deepen its commitment to our city. With today’s announcement Yale takes a meaningful step in this direction. I’d like to personally thank Peter Salovey for his partnership and leadership and I look forward to working with the entire University community to put this agreement into practice,” Elicker said.

Board of Alders President Tyisha Walker-Myers she's "pleased to see Yale take this important step."

"For years, unions have organized, community members have testified, and elected officials have advocated for the University to do more — today is a testament to their work and a robust statement by the University that they’re committed to New Haven’s long-term success," she said. "The Center for Inclusive Growth and the increased voluntary payments will both have a profound impact on the city and its’ residents.”

Salovey said that “Yale loves New Haven."

“The new commitments we make today are informed by decades of engagement and service offered by members of the Yale community, and they are given purpose, shape, and energy by the good people of our wonderful city. The work ahead matters. Together, we must build an exciting and prosperous future for all.”

Here's the full press conference: