After months of negotiations, Harvard has finally purchased the Arsenal property in Watertown, marking the University's growing influence in neighboring communities.

The 30-acre property, which sits between North Beacon Street and Arsenal Street in Watertown, was renovated by the town in 1998 in order to attract tax revenue. Harvard purchased the building and land for $162,641,000.

The sale, finalized Tuesday, brings to the forefront numerous issues surrounding the repercussions of Harvard's status as a non-profit, and thus non tax-paying, organization.

Mary H. Power, senior director for community relations at Harvard, said Watertown may be apprehensive, but the University plans to do everything it can to be a "good neighbor."

"There's concern in the [Watertown] community that tax-exempt space means the city will forgo economic growth on the site," Power said. "What's likely to occur, as in Cambridge and Boston, is that Harvard will be a stable employer with large purchasing contracts and a community that supports vitality."

In February, when Harvard first started making negotiations, Watertown Town Manager Michael K. Driscoll said the community was worried that the University would provide less-than-adequate revenues for the site.

Driscoll said the Arsenal site provides for $3.5 of Watertown's $15 million annual budget. Without adequate revenues from Harvard's tax-exempt status, Watertown may be unable to proceed with many capital projects--such as school and library renovations and road repairs.

"This is a big hit for a small community," said John S. Airasian, chair of the civic group that developed the Arsenal from a 200-year-old military base into a corporate campus for high-tech and consulting firms.