Harvard has long had an important influence on the city that surrounds it. In fact, when the University was founded in the early settlement of Newtowne, the town changed its name to Cambridge in honor of the English university Harvard hoped to emulate. Three hundred fifty-two years later, the University, as the city's largest employer and its biggest landlord, still plays a major role in shaping the surrounding community.

Critics complain that Harvard makes excessive demands on city residents because while it gives many of them jobs, it also raises the cost of living in Cambridge. Even those city officials who have bitterly criticized the University concede that Harvard contributes prestige and jobs to the community, as well as indirect economic boosts that have grown from practical applications of its research.

Of Harvard's 11,500 workers, about 3200 live in Cambridge. According to University releases, Harvard adds more than $100 million to the city's economy annually.

"A lot of Cambridge people work at Harvard, and for that we appreciate it," says Cambridge Mayor Alfred E. Vellucci, who has suggested using Harvard Yard as the site for a parking lot, a city carnival and emergency homeless shelters.

Although it is a non-profit institution and therefore exempt from most taxes. Harvard is still the city's largest taxpayer. The University pays millions of dollars in property taxes on its non-academic land holdings--including property managed by Harvard Real Estate--and also makes a voluntary tax payment of approximately $950,000 on its academic land and buildings.

"Harvard has an overall positive impact, but on a specific issue by issue basis we do better on some issues than others," says Harvard's Director of Planning Kathy A. Spiegelman. She acknowledges that the University "makes it hard for people to live and work here" by pushing up the local cost of living.

But Jacqueline O'Neill, associate vice president for state and community relations, says, "The presence of the University is on balance a major plus."

Vice Mayor Alice K. Wolf says Harvard hurts the city most in its role as a real estate developer by raising property values. "Its interests to make money conflict with the interests of the city," she says.

Without Harvard, adds Vellucci, "we'd have plenty of room to build housing for the people."

O'Neill describes battles over issues such as housing as "surface tensions." She says community criticism is often particularly bitter because the University's high academic standing encourages them to apply inordinate standards.

The presence of Harvard's world-renowned science faculty in Cambridge has encouraged many technology, research and professional firms to locate in the city. In addition, the University attracts many talented students to Cambridge, many of whom stay to work in the area after graduation.

The Genetics Institute, a Cambridge-based biotechnology firm, was founded by two Harvard biochemistry professors, Thomas A. Maniatis and Mark Ptashne, in 1980. The company employs approximately 400 people, many of whom are Cantabridgians.

The company chose its Cambridge office in order to be close to Harvard so the founders "could run back and forth" between the two locations. "Cambridge's proximity to Harvard's academic and scientific resources" was one of the major reasons the company chose the city, Maniatis says.

"Cambridge is a very good place for high-tech," he says. "Virtually every biotechnology company in Cambridge is affiliated in some way with Harvard or MIT."

Maniatis says the company "has a direct impact on the city."

"The Genetics Institute has generated 400 jobs in Cambridge, in part from the fact that Harvard is here," he says.

"We and MIT attract people that stay in Cambridge and incubate research companies," says O'Neill. "The University attracts a lot of research money which in turn employs people."

Another example of Harvard's ties to the corporate world is the Polaroid Corporation, which grew out of Harvard in 1930. As a Harvard student, Edwin H. Land invented a type of plastic filter that polarizes light and later founded the company.

Noted Bauhaus architect Walter Gropius founded. The Architects' Collaborative, the firm that has designed Copley Place and many other projects. At the time of the founding, Gropius was serving as dean of the Graduate School of Design. Because of his affiliation with the University, he wanted to stay in Cambridge, says Elizabeth M. Pietrzak, a marketing assistant with the company.

The University also helps the other employees in the city by sharing its scholarship with the public schools.

The University's support for the Cambridge school system includes the Graduate School of Education's Contant Fellowship program, where public school teachers and administrators are given the chance to work toward advanced degrees at the school. Other efforts range from a Principals' Center to a reading center and writing courses taught by the Expository Writing Department.

"I'm very pleased about Harvard's support of Cambridge's public schools," says Wolf, a former School Committee member.

Since a large number of Cambridge residents work for the University, city officials occasionally thrust themselves into Harvard's internal labor disputes. This spring, the City Council became involved in the Harvard Union of Clerical and Technical Workers' (HUCTW) fight to unionize the University's support staff. The Council passed a resolution in March that supported the would-be union and urged the University not to conduct a campaign against HUCTW.

The Councillors said at that time that it was important for the city to take an interest in Harvard's role as an employer.

"It's important that the city have good labor relationships at its largest employer, Harvard," Councillor David E. Sullivan said in March. "If we have labor strife at Harvard, it's going to spill over into the city of Cambridge--and that's not good for anyone."

While the city has been able to take an interest in Harvard issues that effect Cambridge residents, it sometime finds that providing services and inspecting such a large institution is more than it can handle.

According to state law, all buildings of public assembly are required to have safe methods of egress and city authorities are responsible for enforcing these codes. But because Harvard is so large--it includes more than 240 buildings--Cambridge's two inspectors are not up to the task.

Instead, an "informal, working agreement" exists between the University and Cambridge inspectional services by which the city gives the university the responsibility of ensuring several hundred buildings meet state safety codes. Under this arrangement, Cambridge officials conduct routine fire inspections accompanied by Harvard officials.

But this informal arrangement has proved problematic. This spring a small child fell through a Carpenter Center railing that a state inspector had cited as unsafe in 1985.

Thus, even though Cambridge is officially in charge of making sure that Harvard provides a safe working environment for its employees, the city struggles to cope with such a large entity.