7-Year City-Yale Deal Heads To Alders

by Thomas Breen The New Haven independent

Yale’s proposed new voluntary payments to the city.

The Elicker administration has formally submitted to the Board of Alders a proposed new seven-year deal that would see Yale increase its voluntary payments to the city by roughly $5 million each year — bringing the university’s total annual contribution to New Haven to more than $33.6 million by 2033.

The proposal would also tee up a block of Cedar Street between York Street and Congress Avenue for potential conversion into a pedestrian-only space.

That proposal is included as a communication on the agenda for Monday’s full Board of Alders meeting. It will next head to an aldermanic committee for a public hearing and review before the full board takes the matter up for a final vote later this spring.

The submission comes a month after Mayor Justin Elicker and Yale President Maurie McInnis gathered with several dozen city and university leaders on the second floor of City Hall to announce the new accord, which extends from Fiscal Year 2026-27 (FY27) through FY33.

The proposal builds off of a six-year agreement struck by Elicker and former Yale President Peter Salovey in November 2021 that increased Yale’s voluntary contributions to New Haven by roughly $10 million each year.

In addition to preserving the last deal’s annual bump in Yale payments to the city, this new agreement adds another roughly $5 million on top to partially compensate for the university’s extensive tax-exempt property holdings.

The proposal itself calls on the Board of Alders to accept voluntary payments from Yale “in a manner consistent with” a letter from McInnis dated March 6.

That letter states that, including fire-service payments, Yale will contribute to New Haven a total of $29.8 million in FY27, $30.6 million in FY28, $31.5 million in FY29, $32.3 million in FY30, $33.2 million in FY31, $33.4 million in FY32, and $33.6 million in FY33. Yale’s current annual voluntary payment to the city is around $24.2 million.

Those dollar amounts do not include what Yale currently pays in property taxes for non-exempt properties; nor does it include Yale’s various contributions to other programs, like the Yale Teaching Fellowship and New Haven Promise.

The 2021 agreement included a provision that would have seen Yale’s annual voluntary payment drop by $8 million in its final year, creating a funding cliff in FY27. As part of this new agreement, Yale has agreed to scrap that planned $8 million drop. Yale will also be making a one-time $8 million payment to the city at the start of this new deal to set straight the city’s two-decade-long practice of applying one fiscal year’s voluntary payment to the previous year’s budget.

In separate letters submitted to the alders as part of this submission, Elicker and McInnis each point out that Yale would contribute to New Haven roughly $232 million in voluntary payments over the course of this seven-year deal.

“In a time of widespread uncertainty across the world, this agreement represents the certainty of a desire shared by the City and University to expand partnerships with each other for the benefit of the different communities in New Haven,” Elicker wrote in a March 23 letter to the alders in support of the proposal. “This agreement accomplishes this by not only expanding funding to the City, but also by nurturing collaborations and knowledge-sharing spaces between the City and University on a variety of different issues.”

As was the case with the 2021 city-Yale deal, Henry Fernandez — a former top city economic development official, 2013 mayoral candidate, and long-time director of a youth academics-and-sports nonprofit — was the city’s lead negotiator, while Yale’s lead negotiator was Jack Callahan, a recently retired university vice president.

In addition to the increased voluntary payments to the city, Yale has also committed to maintaining a portion of the 2021 agreement that sees the university pay New Haven tax-equivalent payments for properties the university newly acquires and takes off the tax rolls.

For such properties, Yale must pay the city the full tax-equivalent amount for three years, and then a sliding scale for the next decade. These payments are in addition to the state’s Payment in Lieu of Taxes (PILOT), which the city receives to partially offset tax revenue it loses out on through its abundance of tax-exempt local land.

One of the parts of the 2021 city-Yale deal that the university never followed through on was a plan to convert one city-owned block of High Street between Chapel Street and Elm Street to a pedestrian-only plaza.

This new deal affirms Yale’s continued interest in that delayed downtown project — while extending the university’s sights to another block near the medical school.

The relevant portion of McInnis’s letter reads: “To beautify our city, enhance pedestrian mobility, and increase community connectivity, the city and university will work together to convert specific streets to pedestrian/community spaces on both a permanent and seasonal basis. Likely candidates for consideration include High Street between Chapel Street and Elm Street and Cedar Street between York Street and Congress Avenue.”

Click here to read the proposal — including Elicker’s and McInnis’s letters — in full.