Princeton University, the fifth- richest college in the U.S., agreed to increase its voluntary and one-time contributions to the town of Princeton, N.J., to more than $24 million during the next seven years.
Princeton will make voluntary unrestricted payments of $21.7 million over the period and additional contributions valued at $2.59 million for a variety of town projects, the Ivy League college said April 24 in a statement.
Since nonprofit colleges and universities are exempt from most taxes, many municipalities that they are located in have sought to boost voluntary payments as the institutions grow and their demands for public services increase. Under the agreement, Princeton’s voluntary unrestricted contributions will rise more than 10 percent this year to $2.75 million, and will grow by 4 percent annually in the six subsequent years.
Princeton, with an endowment valued at $18.2 billion as of June, is fighting a lawsuit by a group of residents who say the school should lose its exemption from property taxes because it shares royalties with faculty. The school reaped $524 million in license income between 2005 and 2012, mostly from a patent that Eli Lilly & Co. turned into the cancer drug Alimta.
The residents who are suing want Princeton to pay more, claiming it shares the profits with some faculty while not paying enough in local taxes. University lawyers have argued in the litigation that the payments are a sharing of royalties, not profits, and compensate faculty members for assigning property rights to the school.
The university isn’t alone in facing pressure to pay its host city more. Brown University, the Ivy League school in Providence, agreed in 2012 to boost payments to the city by $31.5 million over 11 years.
Bryant University and Smithfield have also been at odds over how best to reimburse the town for emergency-services costs. A 2013 state law called on Bryant to work out a deal with the town. •
PBN's annual Book of Lists has been an essential resource for the local business community for almost 30 years. The Book of Lists features a wealth of company rankings from a variety of fields and industries, including banking, health care, real estate, law, hospitality, education, not-for-profits, technology and many more.