“This is not a gift,” Vice Mayor Marjorie C. Decker said at the time. She contended that the University would owe $33.3 million annually if its property were fully taxed.

But Mayor Michael A. Sullivan said at the meeting, “We can all say it could be better, but this is what we got.”

The agreement with Harvard came a month after the city reached its first formal PILOT agreement with MIT. MIT increased its voluntary payment to $1.5 million with a 2.5 percent annual increase for the next 40 years. MIT also agreed to restrict the amount of its commercial property that can be converted to tax-exempt use.

The PILOT agreement with Harvard also specifies that if the University converts currently taxable property to educational purposes, it will continue to pay the city as much as it would have paid in taxes, with a 3 percent annual increase.

City Councillor Anthony D. Galluccio, who co-chairs the council’s University Relations Committee with Decker, says he wishes the often-contentious discussions of PILOT agreements could focus on the city services provided to the University rather than on dollar figures.

“Money should not be the issue. We provide all kinds of services to Harvard’s tax-exempt property and there’s a cost,” Galluccio says. “If we could have an intelligent conversation with folks about the subject, there would not be an ongoing debate.”

BY THE CHARLES

This summer will witness the beginning of construction of the University’s properties in Riverside, a neighborhood historically fraught with tension.

At Harvard’s Commencement in 1970, protesters mounted the stage to publicly oppose the construction of Mather House and Peabody Terrace. In 2002, Harvard’s plans to build a museum on Memorial Drive were scuttled amidst neighborhood concerns about parking and noise.

Finally in October 2003, Harvard planners and city representatives came to a compromise, enabling the University to construct a six-story graduate student housing complex between Leverett and Mather Houses, another large complex at the corner of Memorial Drive and Western Avenue, and smaller houses throughout the neighborhood. In exchange, the University will provide 36 units of affordable housing and a public park for city residents.

This past December, the Planning Board unanimously approved Harvard’s designs for the buildings, and preliminary construction is already underway on one of the sites.

“We’re really proud of this agreement,” Power says. “It’s an important one for Harvard, it’s an important one for the city.”

But though some residents say they are resigned to the development, they are still suspicious of the University’s intentions in the neighborhood.

“I think that Harvard has used every opportunity to interpret the agreement to its benefit,” says Carol Bankerd, referring to the University’s plan to extend an underground parking garage beyond the blueprint of its building near Mather, which will result in the removal of a number of trees.

Harvard’s plans for its Memorial Drive site also recently came under attack in a suit filed by Kevin Hill, whose mother’s home abuts the property. On May 26, a Middlesex Superior Court judge dismissed the suit, saying that Hill—neither an attorney nor a trustee of the land—had no legal standing to protest.