The Mt. Auburn Hospital has decided not to exercise its option to buy the Stillman Infirmary site, thus freeing the University to sell the land to a Washington, D.C. developer for a surprisingly high bid of $391,000.

Fred S. Dupree, the Washington developer who submitted the highest of four sealed bids for the Stillman site, will probably construct a high-rise apartment building on the property, thus producing considerable real estate taxes for Cambridge. Had Mount Auburn bought the land, it would have remained exempt from taxation by the City.

Under a "right of first refusal" agreement negotiated with the University several years ago, Mt. Auburn had until 11 a.m. today to match the highest sealed bid submitted for the property. But the CRIMSON learned last night that the Hospital has decided against purchase.

Daniel Needham Jr., chairman of Mt. Auburn's Board of Trustees, said that "price was the basic factor in the Hospital's action." He claimed that "$400-000 is just more than Mt. Auburn can afford to pay for the land."

Needham noted that "the decision was a difficult one to make, because the Hospital was interested in retaining the land for future use." He stressed that construction on the land by a private developer "will not really interfere with the Hospital."

L. Gard Wiggins, Administrative vice-President of the University, said last last night that, in view of Mt. Auburn's decision, Harvard will complete the sale of the Stillman site to Dupree immediately. He said that "the University is delighted that the land will be developed to provide tax revenue for the city of Cambridge."

Dupree will demolish the present Infirmary before beginning construction on the riverfront property.

Several University and Cambridge officials have expressed amazement at the large amount of money offered in the top bid. The next highest bid was $317,330.