May 1, 2012
Dear Members of the Brown Community,
I write to report to you that after many months of discussions, we have reached an agreement with Mayor Angel Taveras to increase the University’s total payments to Providence by $31.5 million over the next 11 years. Brown entered into these discussions not only seeking to respond to the city’s current fiscal crisis, but also to position the University for future growth and even greater success. Over the months, we insisted on certain principles that were important to assuring that future: preservation of Brown’s legal status as a tax-exempt institution, restoring a relationship of respect and trust among the negotiating partners, and resisting any attempts to alter the 2003 Memorandum of Understanding (MOU) signed by Brown and other nonprofit colleges in Providence. Thanks to the participation and cooperation of many, we have been able to reach all of our objectives.
Brown is deeply concerned about Providence’s financial situation and is committed to supporting efforts to enhance the city. Naturally, during our discussions with the Mayor, we pursued options that would also benefit the University. As a consequence, we have secured support for the acquisition of streets in several areas abutted primarily by Brown and for the long-term leasing of 250 on-street parking spaces on College Hill for use by Brown employees. However, our agreement goes far beyond these modest benefits to Brown.
We believe that the most significant role that the University can play in contributing to a stronger Providence and Rhode Island to continue to improve as an internationally renowned research environment where scholarship and innovation translate into economic and social benefits for the community. To do so, Brown must have access to the same level of talent, funding, infrastructure, and community support that our competitors enjoy in their home cities and states.
Today, Brown is one of the largest contributors to the local economy and one of the few entities already positioned to support long-term sustainable growth in our city and state. With this significant agreement, Brown has received assurances that the City and State will support and facilitate these efforts. We are grateful for these assurances and can now turn our attention to a renewed, meaningful and vigorous partnership with leaders in the public, private and non-profit sectors to build the vigorous economy that we all need.
Our agreement today builds on a history of commitment to Providence and Rhode Island by Brown. Together with our faculty, staff, students and area alumni, Brown contributes in myriad and significant ways to the vitality of Providence and Rhode Island. In collaboration with the other private colleges and universities in Providence, Brown entered into an MOU in 2003 to provide nearly $50 million over 20 years to the city—a commitment we have and will continue to keep. Brown also pays $1.3 million in real property taxes on properties purchased since 2003 that are used for educational purposes, and $1.6 million in property taxes on property we lease or do not use for educational purposes. In total, Brown pays $4 million each year in voluntary and property tax payments to Providence and nearly $2 million in fees. With this agreement, this amount will increase by an additional $3.9 million per year for five years beginning in June 2012, followed by $2 million annually for six years until June 2022.
During this challenging period, the relationship of nonprofit institutions to their municipalities has been much debated not only in Rhode Island but also around the country. Such questions are valid and must be explored more thoughtfully and deliberately in the coming years to ensure that we are maximizing our substantial assets across the city and state. My hope and expectation is that in the coming years as the city and state address the very substantial structural issues that have led to the current fiscal situation, we will at the same time work collaboratively to develop sound practices that ensure the long term fiscal health and economic growth that benefits all Providence citizens and institutions.
I would like to thank members of the Brown community for their input and guidance during these discussions. As President-elect Paxson begins her tenure, I hope that our renewed pledge to maintain a meaningful and productive partnership with the City will bear abundant fruit.
Ruth J. Simmons