Raucous comparisons being drawn between Princeton University’s ample pocketbook and the dwindling ones of town residents are perhaps inevitable in the midst of a serious economic downturn, as are the demands about the university’s obligation to increase its support of Princeton governments and schools. The university, from its corner, responds to the brewing tax revolt by asserting that even though its mission of education and research entitles it to a property-tax exemption, it is willingly contributing significant sums to the broader Princeton community.

The ire of some Princeton residents is directed not only at what they see as the university’s inadequate financial contribution to their community, but also at the university’s proposal to move the Dinky station, the rail connection between the town and the main Northeast corridor rail line, about 460 feet farther from Nassau Street in order to create an arts and transportation neighborhood. This will be a second time the university has moved the Dinky away from town [its terminus originally was at the base of the Blair Arch steps, behind the University Store], and mass transit-minded residents claim it creates a hardship for people who walk to the Dinky.

Both the university and Princeton residents view themselves as having the interests of the greater Princeton community at heart, but their conclusions are not always the same. When Robert Durkee, the university’s vice president and secretary, was asked what role the university plays as a citizen of the Princeton community, he pointed out that a whole chapter of the university’s 180-page campus plan document is devoted to the university’s relationship with the surrounding community. In fact, he says, one of the five guiding principles of the planning process was to sustain strong community relations, reflecting the university’s desire to be a positive contributor to the community in a variety of ways.

Durkee says he recognizes that the university depends on its surrounding community. “It is an important factor in faculty and staff deciding to come to the university,” he says, “and so sustaining the diversity and vitality of the community is important to us. We’ve been here for more than 250 years and we’re not leaving.”

A recent report by the university, “Education and Innovation, Enterprise and Engagement: The Impact of Princeton University,” details the overall financial impact of the university, estimating that for the fiscal year ending June 30, 2007, Princeton University directly and indirectly accounted for $833 million in economic activity and 8,951 full-time jobs in Mercer County and $1.09 billion in economic activity and 10,655 full-time jobs in New Jersey.

Princeton University, says Durkee, is also the largest taxpayer in both the borough and the township. A report on the Princeton Community Democratic Organization’s website lists the 2006 property taxes paid by Princeton University and compares them with taxes paid by residents. The university paid $816,186 to the borough as against $8,729,551 by borough taxpayers; $894,178 to the township as against $17,247,745 by township taxpayers; and $3,391,528 to the schools as against $15,652,401 by borough taxpayers and $37,190,546 by township taxpayers.

On top of tax payments, says Durkee, the university makes annual contributions to the borough, last year at a level of $1.2 million — far and above its contribution level just 10 years ago of $80,000 a year. The university also donated $500,000 each for the Princeton Regional Schools’ recent construction program and for the new public library, and it has supported the Arts Council, the hospital, and other community organizations. “It’s been a pretty significant financial commitment we’ve made,” says Durkee.

Durkee also suggests some ways the university contributes indirectly to the borough’s annual budget — in addition to what it pays in taxes. The borough profits from parking revenues and hotel fees at the Nassau Inn paid by people drawn to the town by the university, and the town experiences a higher general level of economic activity due to spending by the university community and its visitors. “So the economy of the borough is significantly enhanced by the fact that the university is here,” concludes Durkee.

Next Durkee raises the university’s contributions to Princeton’s quality of life through its cultural, educational, and athletic offerings: a community auditing program, where, for a modest fee, about 800 people audit university classes; free public lectures; theater; the art museum and children’s library; inexpensive football and basketball games; the university’s beautiful grounds; and even the chapel congregation. These offerings are either free or of modest cost, says Durkee, who adds, “All of these are opportunities that in other communities people have to go some distance to experience.”

Recently the university has launched another effort to help the borough with a challenge it has faced — the lack of enough volunteers to support the fire department, particularly during the day. Because the university’s staff includes many who are trained firefighters in their home communities, the university has worked with the borough to develop a program where 20 university staff members will be on call to supplement response to fire alarms during weekdays, and there will be no cost to the borough except providing uniforms. “This was a way we thought we could be helpful to a need the community has,” says Durkee. “It is hard to put a dollar value on it.”

Yet a number of Princeton residents do not view the contributions listed by Durkee as sufficient, and they have been expressing anger that the university, given the size of its endowment, is not paying its fair share.

Raucous might be one way to describe the April 26 meeting of the Princeton Citizens for Tax Fairness, where Kristin Appelget, Princeton’s director of community and regional affairs, attempted to establish a negotiation process with the concerned taxpayers. People who attended the meeting reported that she was greeted with “insults and jeering” — not the normal tenor of town-gown interaction.

Sue Nemeth, a Princeton Township committeewoman and founder of the Citizens for Tax Fairness group, ran for office in part, she says, “to represent folks who feel overburdened by rising property taxes.” Having lost money in their investments and retirement plans, Princeton residents want to be able to stay in their homes, says Nemeth, who believes that the university has an obligation to do more to help them — in combination, she adds, with greater efficiencies in town government and consolidation.

“It is not enough for the university to just pay for the few services they use,” says Nemeth. “Unfortunately taxes are not levied only on the services you use — then I would only pay for one child and my neighbor, whose children are grown, would pay nothing.”

Dudley Sipprelle, chair of the Princeton Republican Committee and a borough resident who settled in Princeton after a career in the State Department, agrees that the university should be doing more and points out that essential services are at risk. “In this state,” he says, “where the government is shutting down hospitals and laying off people, and jobs are being lost, that the university can go its merry way and not pay its fair share for this community and this state is, to my way of thinking, a scandal.”

Sipprelle, who ran unsuccessfully for both Borough Council and the school board within the past year, maintains that having a tax-free endowment of $12 billion imposes obligations. (This number is the amount the endowment is expected to sink to by the end of the of the current fiscal year, according to a March 5 article in the Daily Princetonian, the undergraduate newspaper.) “Princeton’s endowment has more money than the total market capital of the Dow Jones 30 industrials and one-third greater than Starbucks,” says Sipprelle. And even though the endowment has decreased, he suggests that the obligation does not, noting that he personally cannot plead with the tax assessor for lower taxes because his 401(k) is down.

Nemeth states that the town budget does not decrease when the university does not pay what she considers its fair share, and the result is that residents pay the difference, substituting for the university. Referring to the same document cited above, detailing 2006 property tax payments, she says that if all university property had been taxed in 2006, taxes for each borough property owner would have decreased by 24 percent.

The fact that the university occupies so much of the borough’s land, suggests Sipprelle, also imposes an obligation. “Forty-six percent of the borough’s property is tax exempt, and 42 percent of that, by far the largest footprint, is occupied by the university,” he says. “They do not pay property tax although their property is the most valuable in the borough in terms of assessed valuation.”

The result is a tax burden shared by borough taxpayers, numbering slightly over 2,000, whose growth is constrained by the minimal amount of land available for development. Because the university does not pay taxes on all its property, says Sipprelle, “that leaves just shy of 2,500 parcels left in the borough that can be taxed, and someone has to pay for the police, sewers, library, roads, and all those public services.”

Sipprelle maintains that what the university should be paying in taxes is the $30 million it would owe if all its property were taxable, and he is angry at the university’s unwillingness to do so. “They don’t want to pay, and they keep stiffing the local community,” he says. “If they were to pay their fair share of taxes, they wouldn’t have to make donations to anybody. Up to now, they do what they want, throw a few crumbs. The mayor goes over hat in hand, and they say, ‘We will give you $1.1 million.’”

“In my view, the taxpayers are subsidizing the university,” says Sipprelle, who suggests that the ultimate solution is that the university’s property tax exemption must be lifted.

Nemeth has a slightly more positive view. She suggests that the university is well intentioned and is hopeful that it will hear the community’s pain and reevaluate. She cites as an example Yale University’s reconsideration of its contribution to the New Haven community; according to a February 26, 2009, press release from Yale’s office of public affairs, the university increased its annual voluntary payment to New Haven by $2.5 million to a total of over $7.5 million.

Durkee, who has worked as an administrator at Princeton almost from the time he graduated in 1969 [when he served as an undergraduate editor of the student newspaper along with Richard K. Rein, now the editor of U.S. 1] has a different perspective on Yale’s contribution. He maintains that, viewed as a percentage of New Haven’s total budget, it is comparatively smaller than Princeton’s contribution to the local communities. Princeton, he says, determines the appropriate amount it should be paying to the borough and township, given its tax exemption, in part by looking at its peer institutions, the other Ivy League schools. “As a percentage of the municipal budget,” he says, “Princeton University’s contribution far outdistances the contributions of comparable institutions.” Not all of the Ivies make a contribution, he says, although most do, and even those that pay a larger dollar amount are not even close to Princeton’s contribution as a percentage of municipal budgets.

For Durkee it is the university’s tax-exempt status that is the critical factor in determining its obligations to the local community. “The university is a tax-exempt institution,” he says. “Contrary to what some people have said, it is not because we are small or recently founded or lacking resources. We are a tax-exempt institution because our mission is to provide education and research. The fact that we are tax exempt means that not only are we expected to devote all of our resources to teaching and research, but the people who give us money do so with the understanding that that is what we will spend our money on.”

The national and state governments, which grant Princeton a tax exemption because of the importance of its mission, require the university to submit regular reports documenting that it spends its money only for educational and research purposes.

The university does pay taxes on certain properties that are not a direct part of its educational program, and Durkee admits that contributing some funds to the community is appropriate, even within the constraints of the tax exemption. “But you have to be careful to get the balance right,” he asserts.

Sipprelle does not agree with Durkee’s understanding of why higher education institutions have been granted tax exemptions. “It was so they could not be censured, so that they were guaranteed academic freedom and freedom of expression,” he says. “If they were subject to taxation, they could be taxed out of existence.” Clearly, he adds, Princeton University does not have to worry about being taxed out of existence. His conclusion? “The university has got to be brought kicking and screaming into the 21st century; they have to pay their share.”

Nemeth questions the validity of granting tax exemptions to wealthy universities. “A tax exemption applies when an institution is new and struggling or is state funded,” she says, “but when it is a wealthy private institution with billions of dollars in amassed wealth in an endowment, the exemption doesn’t make a lot of sense.”

An important question, Durkee says, is whether the university’s contribution offsets the kinds of services it requires from the community. “Every time we have done that analysis, it shows we have more than offset the cost,” he says.

For more than 50 years the university has, for example, kept on the tax rolls any university housing properties that could produce school children, for example, graduate student housing — even though they could be tax exempt. As a result, last year the university paid $3.4 million in school taxes and had 85 children in the local school system from university-owned housing. “If you do the math,” says Durkee, “the cost of educating those students is about $1.4 million, but our tax payment was $3.4 million. You can do the same analysis for other services provided; every time we’ve done that, it shows the amount we are paying more than offsets the burden.

“We don’t want to have a negative financial impact; we want to have a positive financial impact,” says Durkee. “We do that through paying taxes, making contributions, generating economic activity, and it all adds up to far more than the burden that we put on the community. And that’s before the access to cultural, academic, and athletic life on campus.”

Another issue raised by the tax fairness camp is that high taxes are forcing out the bottom half of the economic scale, in particular the Italian Americans who came to Princeton as bricklayers in the 1890s when Woodrow Wilson began his building program and the African American community that has been in Princeton since the 1680s.

In response, Durkee describes several efforts made by the university to ensure that moderate-income housing is available in the Princeton community. First of all, it provides a fair amount of housing for its own faculty, staff, and graduate students, allowing them to live in Princeton without competing for other moderate-income housing available in the community. “I don’t think there is any university that houses as high a fraction of its graduate students as we do — over 70 percent,” says Durkee.

The university has also contributed to affordable housing programs in the borough and township for a long time, and it is currently, at its own expense, constructing a five-unit structure on Leigh Avenue. The university has also been an active participant in Princeton Community Housing.

Sipprelle is not convinced by Durkee’s arguments. He points out that there may be other mechanisms for getting the university to contribute what he considers its fair share. He cites a recent effort by the mayor of Providence, Rhode Island, to put a head tax of $150 per semester on students at Brown University and three private colleges to make up the city’s budget deficit. “It’s really about a shared commitment to the well-being of your community. Everyone should be doing their part and coming to the table,” said Mayor David Cicilline, according to a May 13 Associated Press article.

Whatever the ultimate resolution of Princeton residents’ attempts to convince the university to cough up more money, the “tax revolt” they are instigating is motivated in part by a perception that Princeton University views the town’s needs as peripheral to its own. Sipprelle, after noting that the university is a wonderful institution that makes Princeton what it is, adds, “Princeton University now has this navel of the universe complex about themselves, that everything revolves around them and everything they want to do should be done.” He suggests this attitude is perhaps inevitable within the walls of what he says is the fourth wealthiest academic institution in the world.

For Sipprelle, the issue of moving the Dinky is ancillary, but one that is “symptomatic and illustrative of the university’s approach to things.” The proposal to move the Dinky farther from the borough downtown, he suggests, is simply for the university’s convenience in realizing its vision for its arts center project.

“If the Dinky is moved,” says Sipprelle, “it should be moved closer, where there is more access for people.” He also raises the issue of the university’s proposal to build a massive parking garage on the east side of the campus as another reflection of the university’s noblesse oblige approach.

The Dinky issue is huge for both sides. The community wants the station as close to downtown as possible, while the university sees its move farther away from downtown as essential in its plan for building an arts and transit neighborhood approximately where the Wawa now sits.

Durkee explains why the new plan would require the Dinky to stop about 460 feet south of where it does now. The move is necessary to create room for a driveway from Alexander Road directly into the university’s Lot 7 garage, which would relieve traffic snarls during rush hour.

Durkee admits that the move would inconvenience those who walk from downtown to the train. For members of the university community, who he says account for a significant number of Dinky riders, as well as for those who drive to the Dinky, Durkee sees little effect. For those who walk from town to the Dinky, but always stop first at the Wawa for a cup of coffee before going, the walk to the new station, which would house the Wawa, would actually be shorter.

To help out the many people who find the distance to the Dinky’s current location to be too great, the university last year covered the cost of the new free shuttle bus service in town, the “Free B,” run by the borough during morning and afternoon rush hours, and the university has an arrangement with New Jersey Transit that will sustain the service into the future. “We’ve said we are willing to talk with the borough and township about possibly expanding both the hours of the freebie and the route so that more people in community could take it,” Durkee says. He adds that if the free shuttle reaches farther into the township, it could take more cars off the road and reduce pressure on parking.

The university’s own shuttle system is also available to community people, says Durkee, and will take them from the Dinky to Nassau Street. These two types of bus service to the Dinky, suggests Durkee, “is the beginning of an integrated transit system and we are interested in thinking about how to make it more robust.

“One reason we were interested in developing a design for the area that creates a real transit plaza,” says Durkee, “is that we can design it in a way that allows for shuttles and other buses and taxis to collect people at the Dinky or drop them off fairly smoothly and move them into the community.”

The university also wants to encourage people to bike to the Dinky, and part of its plan involves improving bike routes to the station, and providing convenient bicycle storage and repair facilities.

The plan for the arts and transportation neighborhood addresses a number of community needs in its five goals, Durkee maintains, including resolving traffic backups, enhancing economic activity, and creating new opportunities for the community to engage in the arts. The goals:

Create a new arts district for the campus and the community. From the university perspective, the district will provide more opportunities for Princeton students to engage in the arts — creative writing; theater; dance; visual arts, including sculpture and painting; filmmaking; and music performance. The side benefit for the community will be more opportunities to attend performances and exhibitions and enjoy the arts.

The plan includes a new arts building, a satellite to the art museum devoted to contemporary art, and an attractive outdoor plaza. The two existing Dinky buildings will be converted to a restaurant and a cafe.

Durkee envisions the plaza as a place where a mix of people will be able to sit and talk and perhaps watch musical performances or participate in chess tournaments. “I see it as a place where people in town, people coming into town for the arts and retail spaces, and students and other university people are all sharing a space,” says Durkee, “and it becomes a very attractive community space where town and gown come together.”

At certain times of the year, particularly during the summer, says Durkee, members of community will not only be able to attend performances and exhibitions but potentially will be able to use the space for community-based artistic activities.

Improve traffic circulation in the area. The plan will separate strands of traffic that now converge in the same area: students crossing the road at Alexander and University Place, traffic backups on Alexander and Faculty Road, cars pulling in and out of the Wawa and dropping people at the Dinky.

A roundabout will replace the light at Alexander and University Place; the Wawa would move to the new station; and the new driveway from Alexander Road into the existing 700-plus-car parking garage will allow its users to avoid the indirect approach to the lot through Faculty Road, which the university estimates will save 350 vehicle miles per day.

Visitors to artistic performances would be able to find the garage more easily and then walk through a nicely landscaped public space to theater performances. Because the newly planned neighborhood will focus on the arts, it will no longer house the university offices there now, thereby reducing the number of people who use that corridor to get to and from work.

The plan will have 433 public parking spaces within a five-minute walk to the station as against 413 at present, and Durkee suggests parking in the lot will replicate the types of parking available now — the permit lot, long-term meters, and meters on the street.

Enhancing the Dinky experience. At the university’s expense, a new Dinky station will be constructed that will be heated, air conditioned, and will have a nice waiting area that includes the Wawa. Access to cars, buses, ride-ons, taxis, and even bicycles will be convenient. Durkee points out that responsibility for the closure of the existing Dinky station falls to New Jersey Transit, which has been responsible for its operation, but as part of the new plan, the university will take responsibility for operating the new station.

Creating attractive lively public spaces, including retail.

Creating a neighborhood that is model of sustainability. The design of the new station will incorporate future capacity for bus rapid transit, as advised by New Jersey Transit. The bus would travel in part on a dedicated roadway adjacent to the Dinky track, where New Jersey Transit owns the right of way, and then might continue on to the streets into downtown Princeton.

“I don’t have any idea whether it will ever happen or when, but we have designed the whole plan in a way that would accommodate that,” says Durkee. In the shorter term, he is hopeful that the arts neighborhood will bring in more people, helping to sustain the Dinky by attracting more riders.

A side benefit of the project for the Princeton community is that the university will have to invest in a lot of new infrastructure before it can build anything. “We’ve been hearing from a lot of local construction companies and unions who are very excited about the plan,” says Durkee. “In a time when there is not a lot of construction activity, it would be an opportunity for a lot of jobs.”

Marvin Reed, chair of the planning board’s master plan subcommittee and former mayor of Princeton Borough, says that although the community has drafted an amendment to its master plan resolving issues around transportation and parking, it has not yet resolved questions raised by the university’s proposed new arts neighborhood.

“From the university’s point of view, it is a nice location for them to have all the performing arts spaces for students, but it is done at the expense of the community and the people who regularly use the train,” says Reed. “They have to walk farther than now to get to the station.”

Reed notes that the Dinky station was originally at the base of the Blair Arch, behind Richardson Auditorium, where the Princeton University Store is now located, and he observes: “People who were a part of that history say, if anything, we need a system where the station is closer to the center.”

In Reed’s opinion the debate about moving the station raises a larger question about whether pressure should be put on the state to accelerate development of an advanced express system, abandon the train line, and convert to a bus-based system that would not require people to change to a new vehicle to continue their journeys. Such a system could also have spokes reaching to the new Plainsboro town center, MarketFair, Quaker Bridge, Carnegie Center, and Forrestal Village.

Reed does not think that converting the Dinky to a bus rapid transit system that would terminate at the Dinky station is the best approach. “If you have to transfer, it tends to discourage development of an effective number of passengers,” he says. If passengers remain on the vehicle they get on at Princeton Junction, which would also stop at other places on Nassau Street and in other parts of town, then the location of the Dinky station, says Reed, is a moot question, or at least not as important, and such a fancy station as currently conceived would not be necessary.

To enable the university to move forward with this project will require zoning changes in both the borough and township, because the proposed arts district would occupy land in both. Right now the issue is with the planning board, which is in the process of updating the community master plan with respect to the whole campus expansion plan. “We have most of the new language drafted except for the part of the arts neighborhood,” says Reed, adding that they are likely to adopt what they have already completed and return to the arts neighborhood at a later date.

At this point, says Reed, the planning board has been suggesting to the university that it revise the plan to leave the station where it is and build the arts neighborhood around it. “Nobody rejects the idea of doing an arts district,” he says. “The question is how it is done and where the buildings for it are placed so that we can maintain the interaction that the community is used to.”

Durkee says that the plan has been extensively discussed with the public for close to three years in various open houses, planning board meetings, and other settings. Recently the discussion has gotten more focused, starting with a presentation to the borough council on May 5, and moving along with one in June to the township, and then one with the planning board.

At the moment the proposed location for the arts and transportation neighborhood covers six different zones, and Durkee suggests the first step might be to think about what the right zoning is for the area and whether the area should include land farther south on Alexander Road in addition to the more limited arts and transit neighborhood. Once the zoning is in place, the university would refine its plans further and begin to seek approvals.

“Even folks who have had different views about the specifics of the plan, particularly the location of the Dinky,” says Durkee, “seem to have agreed with the goals. So I could imagine putting zoning in place to allow those things to happen, and at a later stage a discussion of the specifics of a particular plan.”

So how will the issues between university and town ultimately get resolved? Robert Geddes, president and chair of Princeton Future and former dean of the university’s School of Architecture, would like to see town/gown issues worked out in the context of a community planning process. Princeton Future, says Geddes, was created to initiate discussion between borough and township, community and university, businesses and institutions that would develop a vision of the type of community Princeton wants to be. Both Marvin Reed and Kristin Appelget, the director of community and regional affairs, sit in at Princeton Future’s meetings. “Not as members,” says Geddes, “but it is a very collegial relationship.”

For Geddes, the Dinky issue represents an opportunity for revisiting this process and bringing to the table all the complexities that should be considered. Geddes, as an architect, offers his own personal suggestion for a design that he believes might be acceptable to both sides. His idea includes the university’s proposal with two squares and two plazas side by side — one for the arts and one for transportation. What he adds are two major walkways and additional mixed-use development.

One walkway from the Dinky to Blair Arch would be a beautifully landscaped path into town. The other would be a tree-lined promenade that stretches from the transportation plaza along Alexander Road, along a newly developed area between the rail line and Alexander, which would include housing, offices, research facilities, and lofts for artists, lawyers, and other organizations. Geddes believes this new neighborhood would offer enormous economic benefits for the community.

What Geddes envisions is a very dense and intense development, with buildings as high as five to six stories; it would also include neighborhood convenience stores.

Geddes explains what he means by density and intensity. “You can have density like on a subway car or in a crowd trying to get across 34th Street and 8th Avenue,” he says. But intensity emphasizes casual, face-to-face interactions on the street; the focus is on people coming together, as they do in the downtown plaza next to the Princeton Public Library. A mix of people and activities similar to what he is describing, says Geddes, is why Brooklyn is so successful now.

Durkee suggests that the university itself considers a mixed-use development similar to what Geddes is describing to be essential; it is in fact mentioned at the end of the campus plan as something that may happen beyond the plan’s 10-year horizon. The university’s idea is for a mixed-use neighborhood, with community housing and some additional retail; Durkee muses that it might also be a nice living area for artists teaching for a year in the university’s expanded arts program.

Although the idea is enticing, Durkee says that just the arts and transportation neighborhood itself is ambitious in this recession; the satellite for the art museum, for example, is not part of the initial plan. “We thought it was plenty ambitious to try within 10 years to do the infrastructure, the new station, develop retail, and construct the first arts building,” he says. Later on the university will add other arts buildings and think about what will happen farther down Alexander.

In the end the decision about what is best for the Princeton community will require that both pieces of the community, town and gown, come together with a willingness to listen to each other’s priorities. A genuine dialogue is perhaps the only way to bring all the requirements and their implications to the table, with the hope that a better solution will result.

Perhaps both sides need to assume a dash of humility as they approach each other. On the one hand, Princeton University should remember that, despite its current financial power, it was not doing so well when it came to the Princeton city fathers many years ago looking for a new place to situate itself. Princeton was already a thriving community, and its city fathers decided to give the College of New Jersey 10 acres of prime real estate, 1,000 pounds, and 200 acres for a wood lot. Eventually it was the university that renamed itself after the town and not vice versa.

But on the other hand, Princeton’s residents need to admit to themselves squarely that the existence of the university and all it has to offer is a large part of why they live where they live.

Only then should the negotiations begin.

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