Cornell will pay the City of Ithaca $4 million annually, adjusted yearly for inflation, as the Cornell Board of Trustees approved the revised memorandum of understanding in an executive committee on Friday, Oct. 13. On Wednesday, the Common Council passed the MOU after amending the term length to 15 years, a five year decrease from a prior proposal.
The University last negotiated the MOU in 2003, which stipulated that Cornell provide voluntary payments in lieu of taxes of $1 million annually until June 2024, adjusted yearly for inflation. Cornell is exempt from paying property taxes as a higher education institution, but instead offers the city voluntary PILOT contributions.
The agreement comes after months of negotiations over Cornell’s yearly contribution. In September, Mayor Laura Lewis announced that negotiations halted on Aug. 11, as the City of Ithaca proposed an $8 million contribution while Cornell gave their offer for $3.15 million. Seven days after Lewis’s office released the statement, President Martha Pollack signed a joint statement with Lewis that committed Cornell to pay $4 million annually.
Following the informal agreement, the Ithaca Democratic Socialists of America held a rally on Sept. 18 at Ho Plaza to demand an increased contribution from the University. Common Council members Jorge DeFendini ’22 (D-Fourth Ward) and Tiffany Kumar ’24 (D-Fourth Ward) joined in support of the increased contributions.
The Common Council approved the $4 million annual contribution MOU 9-1 at a meeting on Wednesday, after tense discussion about the position the city was under. On Oct. 4, the Common Council passed a budget that relied on the University’s $4 million PILOT payment contributions.
“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.”
The agreement took effect immediately until the year 2039, as the Common Council decreased the term length from 20 to 15 years.
Eighty percent of the funding is unrestricted, allowing the city to use the funds with broad discretion. The remainder will support city infrastructure and other priority projects of mutual interest, according to a University press release.
The University will provide an additional $100,000 annual grant for a Cornell faculty member to collaborate with the city on issues such as sustainability, according to the press release.
“I’m extremely grateful to the Common Council for approving this agreement and appreciate all who were involved in the negotiations that enabled us to reach this historic moment,” Vice President of University Relations Joel Malina said in the statement. “This hard work and dedication strengthens the relationship between the city and Cornell, and these growing resources will benefit Ithaca residents for years to come.”