ITHACA, N.Y. (WHCU) – Negotiations between the City of Ithaca and Cornell University have hit a brick wall.

According to Mayor Laura Lewis, there’s been no movement on talks to increase the amount of the school’s payment in lieu of taxes to the city since August 11. If Cornell did not have tax-exempt status, the tax on its assessed property would be $33 million dollars. The city sought 25% of that value. Cornell offered $3.15 million, up from $1.6 million, and moved to end negotiations when the city countered with $5 million. There is currently no agreement in place for 2024. Read Mayor Laura Lewis’ full statement below.

Statement of Mayor Laura Lewis

The City and Cornell’s ongoing negotiations over Cornell’s financial contribution to the City-often referred to as a PILOT or payment in lieu of taxes-have ceased to progress as of August 11. The city entered the process motivated by a core belief that despite the tremendous overall economic impact the university community brings to the region and the city, Cornell’s direct financial contributions to the city are fundamentally lacking and fail to demonstrate a commitment to the needs of Cornell’s host city. 

Cornell’s tax-exempt real estate holdings in the city represent nearly half of the city’s assessed property value (roughly 45% as last calculated). This would equate to approximately $33 million in property taxes paid to the city if Cornell did not enjoy tax-exempt status. The University’s now lapsed agreement contributed $1.6M to the city in 2023. 

The need and time-sensitivity of the negotiations to date was clear: the city sought–and ultimately obtained an offer of–increased payment beginning now, in 2023. And there is currently no payment at all scheduled from Cornell in 2024, representing a $1.6 million decline from Cornell’s 2023 contribution to the city.

The city and Cornell held four negotiating sessions between April and August, and the Common Council received multiple briefings on the progress of those negotiations. the city benchmarked its proposals across those negotiations against 25% of approximately $33 million in property taxes that Cornell would pay were its property taxable, or roughly $8 million.

Despite a good faith effort to negotiate an amount compatible with the city’s needs, Cornell ultimately failed to offer a financial commitment reflective of its leading role in the community. Specifically, Cornell’s final offer was approximately $3.15 million. The city’s response was to propose approximately $5 million, to which Cornell indicated that it would not offer any additional increase from the $3.15 million proposal and moved to end the discussions.

This is a lost opportunity for Cornell to invest in and garner the support of its community. With no future payments to the city scheduled, Cornell is unique among its peer institutions in its lack of support for its host municipality. As the city enters the 2024 budget cycle, it will need to plan for a budget without Cornell’s support, and so will start the 2024 budget process with a $1.6 million hole in the budget.