Both St. Louisans and WashU community members are calling for WashU to compensate surrounding communities through Payments in Lieu of Taxes (PILOTs), due in part to WashU’s growing real estate portfolio in the City of St. Louis and St. Louis County. However, WashU does not anticipate changing its stance on PILOTs, stating the University contributes to the surrounding municipalities in other ways. 

“The approach that we’ve chosen is rather than just write a check … we are much more interested in co-investing [with local municipalities] in places where we think that the investments are going to have the biggest impact,” Chancellor Andrew Martin said in an interview with Student Life on Oct. 9, 2023.

PILOTs are voluntary payments universities make to surrounding municipalities to make up for a portion of the money they would otherwise pay in property and federal income taxes. If WashU paid PILOTs, they would likely go to the City of St. Louis or University City. 

Several universities across the country pay PILOTs to their surrounding municipalities, including Harvard, Yale, Stanford, Brown, and Boston University, with Yale contributing the most at $23 million annually. University City Mayor Terry Crow wants WashU to follow their example.

“By law, they don’t have to [pay PILOTs], but the peers that [WashU] likes to compare [itself] to have chosen a different path,” Crow said.

A 2015 report from University City concludes that, in 2018, the university’s tax-exempt properties would otherwise generate almost $2 million annually, and a 2020 report  commissioned by University City finds WashU places a “significant fiscal burden on the City.” 

While University City officials told Student Life they would likely use PILOTs to finance city services such as police and trash collection, some residents of University City and St. Louis said they hope the money would go toward public schools in their respective areas.

What jurisdictions are affected

As WashU has purchased more property in surrounding areas, the issue of PILOTs has become more pressing. WashU owns property in University City, Clayton, and St. Louis. The South 40, West Campus, most of the Danforth campus, and the Fontbonne campus are located in Clayton, while the Medical Campus, some of the East End, and several student housing units are in the City of St. Louis. 

WashU also owns an estimated 500 residential properties in University City as of Feb. 2024 as well as North Campus and several commercial properties. These holdings make WashU the largest landowner in University City. 

In 2014, WashU’s properties in University City were valued at $130 million, and since then WashU has acquired more property in the area. In 2023, WashU bought nine commercial properties on the Delmar Loop, including a tattoo parlor and a bowling alley. Since these commercial properties are not relevant to the mission of WashU as a nonprofit, the University pays property taxes on them.  

Crow emphasized that while he believes WashU takes good care of their properties, the acquisitions still pose a problem for University City. 

”When WashU buys some piece of property, it comes off the tax rolls,” Crow said. “[The] school districts still get the same amount of money, it’s just … our property taxes went up because there’s less units paying property taxes.” 

The St. Louis Mayor’s Office spokesperson Rasmus Jorgensen said that while the city has a good relationship with WashU, the City of St. Louis was exploring their options.

“Our city’s first Long-Term Revenue Advisory Council is charged with exploring and recommending strategies for … sustainability of the City’s revenue,” Jorgensen said. “Whether PILOTs may have a growing role to play may be something for the advisory council to look at.”

Local residents’ response

Calls for PILOTs have come from local governments and individuals who live in these communities. In the past few years a University City Councilman published an op-ed arguing WashU should pay PILOTs, and city residents organized to demand payments from the University. The Nation also published an article calling for the same.

One force behind these efforts has been the St. Louis chapter of Democratic Socialists of America, which organized a protest last fall over PILOTs. Blue Ehrenstrom, a 2021 WashU alum and a spokesperson for DSA, said the wealth disparity between WashU and surrounding communities inspired their efforts. 

“This massive institution that has a $13.2 billion endowment and has an exceptionally nice campus, blocks away from some of the poorest neighborhoods in St Louis, right?” Ehrenstrom said. “That it is such an immediate flip.”

DSA, along with its community partners, advocates for a “Green New Deal for Public Schools,” where WashU would pay $12 million to St. Louis public schools and $3 million to University City public schools annually to support them and help them prepare for climate change. According to DSA, the initiative is supported by the local chapter of the St. Louis teachers union, One U City, the Parent Action Council, and President of the St. Louis Board of Aldermen Megan Green.

The City of St. Louis and University City spent approximately $19,285 and $20,683, respectively, per student in the 2022 fiscal year, which is more than the state average in the 2021 fiscal year. Despite these additional funds, as of 2023, University City and the City of City of St. Louis public schools had graduation rates of 70% and 83% respectively, both below the state average of 90%. Their test scores for Math, Social Studies, Science,, and English, were similarly both well below the state average, with University City consistently scoring higher than St. Louis.   

A parent whose children attend St. Louis public schools, and will be referred to as X, said the Saint Louis Public Schools District (SLPS) desperately needed PILOTs. X noted that 20% of SLPS students are “unhoused or unstably housed, bouncing around, staying in cars.”

“The wealthiest institutions in our city are not contributing to the public schools, and that’s just not tenable,” X said. “[PILOTs] are not just a matter of being helpful. They are a necessity.”

WashU contribution

For its part, WashU argues that it invests in surrounding communities in a variety of ways. WashU estimates its positive economic impact on surrounding communities at $9.3 billion, and notes that it employs over 22,000 people, spending $3.9 billion on salaries alone. WashU also provides police presence in some areas of University City, and offers forgivable home loans to its employees as part of its Live Near Your Work program. 

Additionally, the University often points to numerous mutually beneficial projects, such as a recent investment in the Brickline Greenway, building a pedestrian bridge over Forest Park Parkway, and adding street lights along Skinker, among many others. Chancellor Martin spoke about the impact of one of these projects. 

“I was a graduate student 29 years ago. It was scary walking up and down Skinker at that time,” Martin said. “This University has invested millions of dollars improving the lighting along Skinker and adding security. That’s something which the neighbors appreciate, right? It’s something we’re happy to do.”

Members of the University City government acknowledged these efforts and emphasized the good relationship University City has with WashU outside of the issue of PILOTs. Crow said he appreciated having WashU as part of University City. 

“Do I wish it would change? Absolutely. Do I still want WashU to be a part of our community? Of course I do. I mean, what a phenomenal, phenomenal institution,” Crow said.

However, X felt focusing on projects that were “mutually beneficial” were not enough. 

“Saint. Louis Public Schools is the only system responsible for educating every child in St. Louis,” X said. “The kids who need the most help, who are overwhelmingly found in St. Louis public schools, are not benefiting in any way from the types of investments that WashU is making.

Ehrenstrom also disagreed with the University’s policy of providing investments and services to surrounding communities rather than direct monetary compensation. 

“You will talk to teachers who have tons of really great ideas about how they can improve their school district. And the issue is money. You can talk about housing in St. Louis City. The issue is money,” Ehrenstrom said. “[People] want a lot more than money, but they do also want a dollar amount.” 

University City

Crow expressed that while University City generally has a strong relationship with WashU, PILOTs have been a longstanding source of disagreement.

“[Our relations] have almost always been positive with WashU, but when it comes to PILOTs or even some variation thereof, there’s simply a brick wall,” Crow said.

In 2020, a study commissioned by University City found that WashU places a “significant fiscal burden on the City,” and in response, WashU sent a letter addressed to City Manager Gregory Rose. It argued that University City should look beyond fiscal impact, which only includes direct revenue streams or costs to local governments, and focus on economic impact, which includes jobs created and commerce generated by WashU students, faculty, and staff.

“[There is a] tremendous amount of economic and community development impact supplied by the University compared to other residential properties in the City,” the letter reads.

As opposed to those who want PILOTs to go directly to public schools, members of the University City government including Mayor Crow and City Manager Gregory Rose hoped PILOTs would help fund a variety of city services. 

“I would like this money to go to help with our police department. I’d like this to help to go with our fire department. I’d like to help us with our streets. I’d like to help us with our trash collection,” Crow said. “These are all services that we provide to every other taxpayer [in] University City, and we provide it towards WashU students as well.” 

University City Councilman John Tieman expressed in an op-ed in the Riverfront Times last year that WashU should pay PILOTs. At a recent city council meeting, Tieman said the University needs to be a better neighbor.

“I love Washington University. I’ve attended Thurtene Carnivals, and innumerable readings and lectures and concerts at Graham Chapel. I met my beloved wife, Phoebe, in Holmes Lounge,” Tieman said. “But, sadly, sometimes the university doesn’t feel like a neighbor. Sometimes it feels like we are just carbon-based lifeforms who share a zip code.” 

Student Perspectives

Along with local government officials, WashU students also expressed a desire for the University to pay PILOTs, and in 2022, the Student Union (SU) Senate created a report calling for WashU to pay PILOTs. Junior and former Speaker of the SU Senate Ella Scott said she thought the University could do more. 

“It’s admirable what they have done. I think the ‘In St Louis, for St Louis’ motto is really important, but I’m not entirely convinced that that’s [the] real position of the University,” Scott said.  

She also feels PILOTs could be beneficial to the University, as she believes they can make WashU more well-known to surrounding communities.

“I went to high school 45 minutes down the road, and I didn’t know that WashU existed until I started looking at colleges my junior year of high school,” Scott said. “I think that’s really concerning.”

WashU senior Jonah Zacks said his support for PILOTs stemmed from his upbringing in University City. He spoke about his experience when an elementary school, Del Mar Harvard, closed down and had to be combined with his elementary school, Flynn Park Elementary. Zacks said the merge decreased the quality of his and his fellow classmates’ educations.

“They had to expand the school, and [they didn’t] really have classrooms for a while,” Zacks said. “There was a whole year of kids, myself included, who saw no change in their educational progress.”

Sophomore and SU Diversity, Equity, and Inclusion Chair Saara Engineer said she hoped WashU would follow the example of other universities who pay PILOTS. 

“There’s a lot of other private schools, the [same] status as WashU, who are paying four to five million every year as part of PILOTs, but WashU is not,” Engineer said. “How are we demonstrating the fact that we are in St Louis for St Louis?”

Zacks praised some University initiatives, like WashU instituting need-blind admissions, but nevertheless said that he believed by not paying PILOTs, WashU is not fulfilling its responsibilities to University City and St. Louis.   

“I think as long as that’s the case, as long as WashU just fundamentally does not have faith in the communities that host us, we haven’t really lived up to the promise of the University,” Zacks said. 

Additional reporting by Zach Trabitz

Editor’s Note: This article was updated to reflect the fact that SU created a report and did not pass a resolution in 2022 calling for WashU to pay PILOTs. It was also updated to remove information regarding Net Operating Loss after receiving clarification from Angie Leahy, Associate Vice Chancellor of Finance and Controller, that rental income is not subject to unrelated business income tax and therefore is not involved with net operating loss.