For two years Harvard and the City of Boston have been wrangling over what the University owes its community. They've finally come to a conclusion: $40 million over 20 years.

And the $40 million deal--an increase of some $12 million from what Harvard already pays Boston--may prompt Cambridge to seek more money by renegotiating its own agreement with the University, according to city officials.

Harvard has an understanding with both Boston and Cambridge known as "payments in lieu of taxes." Harvard does not pay taxes on any land used for educational purposes, which constitutes most of the University's property.

Following what is accepted practice for non-profit institutions, Harvard pays Boston what is approximately equal the taxes the school would pay on graduate student housing (which is not technically used for educational purposes) plus an extra voluntary payment related to new construction at the Business School.

Harvard owns a total of 226 acres in Boston.

"During the course of the negotiations it became clear that the voluntary payment would be necessary in order to reach a satisfactory agreement," said Kevin A. McCluskey '76, Harvard's director of community relations.

Similar Hopes in Cambridge

Cambridge, which also has a payment in lieu of taxes agreement with Harvard, has been paying close attention to the talks between Boston and Harvard. Its 10-year agreement with the University is due to expire this year.

Following Boston's lead, Cambridge will try to renegotiate its agreement with Harvard, said Mayor Francis H. Duehay '55. The University owns about 220 acres in Cambridge.