Julia Nagel/Sun Photography Editor

Members of the Common Council overwhelmingly voted to approve a modified memorandum of understanding for Cornell's payments in lieu of taxes to the City of Ithaca.

October 11, 2023

Common Council Amends Memorandum of Understanding With Cornell to Shorter Term

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This article was updated at 10:46 p.m.

Ithaca’s Common Council amended the duration of Cornell and Mayor Laura Lewis’s proposed memorandum of understanding to 15 years from 20, decided in a 9-1 vote on Wednesday, Oct. 11. The decision was met with mixed emotions from the nearly 40 community members in attendance.

“They forced us to choose between eating a terrible deal, continuing to allow Cornell to starve the city and displace marginalized people for 15 more years, and raising taxes and firing public workers — consequences that will affect working class people first — taking food off their tables now,” said Alderperson Tiffany Kumar ’24 (D-Fourth Ward), who voted to approve the memorandum.

This perspective was shared by several members of the Common Council, including Alderperson Jorge DeFendini ’22 (D-Fourth Ward), who asserted that the University had all the leverage in their relationship with the city.

“We are in a hostage situation with Cornell University,” DeFendini said. “The fact of the matter is, we don’t have the ability right now as a city to take on Cornell University with their tax exempt status and their army of lawyers.”

DeFendini ultimately voted to approve the modified memorandum.

Before the MOU was voted on, the Common Council also voted 9-1 to approve an amendment introduced by Alderperson Robert Cantelmo grad (D-Fifth Ward) to adjust the length of the new MOU to 15 years, with an expiration date set for June 30, 2039. The amendment will also oblige the city to “not commence or support litigation seeking a change in that [tax-exempt] status.”

The Common Council also unanimously voted to approve two amendments — one which will include Ithaca’s city manager position in Cornell’s sitting working group, and one which will require Cornell to make their first payment under the new MOU no later than July 15, 2023.

The Common Council also voted against a proposed amendment introduced by Alderperson Cynthia Brock (D–First Ward) to increase annual payments from Cornell to the city to include a two percent yearly increase on top of the inflation-adjusted $4 million for a shorter overall duration of seven years beginning in 2023. The amendment was voted down 8-2, with opponents fearing it would make the MOU unapprovable by Cornell.

Alderperson Cynthia Brock (D-First Ward) was the sole member of the Common Council to vote against the amended MOU with Cornell University. (Julia Nagel/Sun Photography Editor)

Brock was the sole member of the Common Council who voted not to approve the amended MOU.

“The deal is much improved from where we started, so I’m grateful for that and the work of the community and my colleagues to help us get what we have right now,” Brock said in an interview with The Sun. “But I do think that this is a deal accepted under duress and we didn’t have any choice but to accept it.”

Brock mentioned that she hopes Cornell voluntarily modifies their offer to the city to be more in-line with the community’s and Common Council’s goals, specifically adding a reopening clause to make the agreement more flexible.

The amended MOU, which would induce voluntary annual payments of $4 million from the University to the city over the next 15 years, will be sent back to the Cornell Board of Trustees before it is officially approved.

“Cornell greatly appreciated tonight’s vote by the Common Council approving an amended MOU agreement,” wrote Vice President for University Relations Joel Malina in a press statement. “The amended agreement will now be considered by the Executive Committee of the Cornell Board of Trustees, and I will notify Mayor Lewis once that has occurred.”

Wednesday’s vote comes after months of discourse between University officials, City of Ithaca representatives, Ithaca residents and Cornell faculty and students.

Negotiations began in April, as the city and Cornell prepared to replace the existing memorandum of understanding, which was set to expire in June 2024. Under those terms, which were established in 1995, Cornell owed annual payments of $1.4 million.

University and city officials held four negotiation sessions between April and August in which the city presented their proposal that Cornell pay $8 million annually. Lewis said that the city decided on the $8 million figure through calculations of Cornell’s tax-exempt real estate holdings, which equate to approximately $33 million. The city benchmarked their proposals against 25 percent of this $33 million.

The city’s figure was met with Cornell’s own offer of $3.15 million, which is more than twice Cornell’s current annual payment. Malina said in a prior interview with The Sun that this increase in voluntary contribution would “demonstrate Cornell’s deep commitment to the city.”

The city responded with an offer of $5 million, but Cornell indicated it would not move from its previous $3.15 million figure. Negotiations stalled on Aug. 11, as announced by Lewis in a Sept. 7 press release that condemned the University’s stonewalling.

One week after Lewis’s press release, Lewis and Cornell President Martha Pollack released a joint letter announcing that an agreement was reached on an annual contribution of $4 million. Upon approval by the Common Council, Cornell would begin making this increased payment under an MOU set to expire in 21 years.

“This new agreement will further strengthen our critical relationship and partnership for the long-term, for the benefit of the people of the City,” Lewis and Pollack wrote.

The following Monday, Sept. 18, the Ithaca Democratic Socialists of America held a march and rally urging Cornell to contribute higher payments as part of the Make Cornell Pay campaign. Around 70 students, faculty and community members attended, including Alderperson and Ithaca DSA member DeFendini, who has called on the University to both pay more and agree to a shorter contract length.

After Wednesday’s vote, many community members still said their needs were not met. Fay Gougakis has lived in Ithaca for over 40 years and has struggled to pay rent because of high leases driven up by steep taxes. 

“You really can’t separate Cornell from Ithaca because they’re part of the community. And right now, they’re not giving their share,” Gougakis said. “We’re in economic distress and we really need Cornell to help us.”

Gougakis called on the University for increased support.

“Cornell needs to realize that if the city is not doing well, it is also going to affect who wants to come work and live at Cornell,” Gougakis said. “It should be a loving exchange between Cornell and Ithaca, but it isn’t.”

On Oct. 4, over 250 members of Cornell’s faculty published a letter to The Sun in which they reminded the University that they are members of not only Cornell but also residents of Ithaca, Dryden, Lansing and Tompkins County.

“With its $10 billion endowment, Cornell can and should significantly increase its financial contribution to these communities,” the faculty wrote in the letter.

Prof. Risa Lieberwitz, labor and employment law, attended the meeting and was one of the faculty members to sign the letter. 

“When you compare this type of endowment to other universities, this is far from the sort of payment in lieu of taxes other wealthy universities are paying,” Lieberwitz said. “And it’s shocking to me that the negotiating team for the city did not seem to have ever put out the idea of the reopener clause for enabling either the city or the University to reopen the MOU to negotiate the level of payment.”

The Common Council will continue developing the city’s 2024 budget in meetings on Oct. 12, Oct. 19 and Oct. 25 at 6 p.m. at City Hall. A final vote on the 2024 budget is set for Nov. 1.