University and Town of Princeton reach 7-year agreement on voluntary contributions

Princeton University and the town of Princeton, N.J., have reached a seven-year agreement under which the University will make voluntary unrestricted financial contributions to the municipality totaling $21.72 million, and will also make one-time contributions valued at $2.59 million to several identified municipal projects.  

In calendar year 2014 the University's voluntary unrestricted contribution will be $2.75 million, an increase of more than 10 percent over its 2013 contribution. In each subsequent year of the agreement, through 2020, the University will increase its contribution by 4 percent per year. 

In 2014 the University will contribute an additional $90,000 for the purchase of a new Free-B vehicle. Over the course of the agreement, the University will also make the following one-time contributions: 

  •  $250,000 toward construction of a new storage facility for the town's Department of Public Works equipment.
  • $500,000 toward construction of a new Princeton First Aid and Rescue Squad facility on municipal land.
  • $250,000 toward the expansion of the Witherspoon Fire Station (in addition to $300,000 already committed to this project under a prior agreement).
  • $500,000 toward the purchase of fire-fighting apparatus.

The University will also donate to the municipality for its use the University-owned parking lot on Franklin Street that has been valued in the range of $1 million. 

Representing Princeton University in the discussions that resulted in this agreement were Vice President and Secretary Robert Durkee and Director of Community and Regional Affairs Kristin Appelget. Princeton University President Christopher L. Eisgruber participated in the initial meeting between the representatives of the University and the town. The town of Princeton was represented by Council President Bernie Miller, Councilman Patrick Simon and Administrator Bob Bruschi.

Princeton Council President Bernie Miller commented that: "The discussions with Princeton University were conducted in an atmosphere of mutual respect and an understanding of the shared interests of the University and the town. The agreement that was reached embodies three important principles; first, it is a seven-year agreement that achieves fiscal stability between the University and the municipality. 

"Second, the unrestricted voluntary contributions by the University will increase annually at a rate greater than permitted for the municipal property tax under New Jersey State law. Third, the University will make one-time contributions to projects that were agreed to be of mutual benefit to the University and the town. In addition, the University has agreed to donate to the municipality for future use real property consisting of the University-owned parking lot on Franklin Street."

Council President Miller thanked Councilman Simon and Administrator Bruschi, who participated in the meetings that led to the agreement. Simon also expressed his gratitude to Council members Lance Liverman, Jenny Crumiller and Jo Butler, who met regularly with the municipal team, and Brad Middlekauff, who provided invaluable assistance as a volunteer.     

Eisgruber said: "We are very pleased to be able to make these contributions to the town of Princeton, and in doing so to reaffirm both our desire to help sustain the vitality and well-being of our home community and our deep appreciation for the many aspirations and interests we share. Through candid, collegial and constructive conversation, we have arrived at a seven-year agreement that provides unrestricted support to the town that will increase 10 percent this year and then grow at a rate greater than the growth in property tax revenues permitted under state law, which means that the relative value of our contribution will increase each year.  

"Our conversations identified a number of specific projects that are important to the University as well as to other residents of this community, and we are pleased to be able to provide significant support to them as well. I believe this agreement reflects a strong spirit of cooperation and mutual respect between the town and the University, and I want to thank the municipal officials, as well as my colleagues at the University, who helped guide us to this agreement." 

The specific year-by-year unrestricted contributions under the agreement are as follows (the 2013 contribution was $2.475 million): 

2014 -- $2,750,000

2015 -- $2,860,000

2016 -- $2,970,000

2017 -- $3,090,000

2018 -- $3,220,000

2019 -- $3,350,000

2020 -- $3,480,000 

In addition to the contributions described in the agreement, the University makes additional voluntary contributions each year by following a longstanding practice of leaving certain properties, such as non-dormitory graduate student housing, on the tax rolls even though they could qualify for exemption from property taxes under New Jersey law. In 2013 the University paid $2.98 million in taxes on these properties that could qualify for exemption, with $659,000 going to the town of Princeton and $1.43 million going to the Princeton Public Schools. The agreement indicates the University's intent to continue this practice, and its intent if it modifies this practice to make additional voluntary payments to the municipality and the schools at the levels they would have received if the properties had remained on the tax rolls.  

The University's total property tax payment in Princeton in 2013 was $8.35 million, with $1.85 million of that total going to the town. The University's property tax payments are expected to increase significantly in future years when its Lakeside graduate student housing and Merwick/Stanworth faculty/staff housing projects are completed.  

A resolution memorializing the agreement will be presented to Princeton Council for its approval on Monday, April 28. The agreement was developed through a series of meetings that began late last fall and, as stated in the agreement, is "entered into in recognition of shared interests and in a spirit of mutual respect." The drafters of the agreement hope that it will provide a useful model for similar discussions between other communities and universities about their contributions.