Boston University signs first PILOT deal in 25 years

Why it matters: Boston leans on property taxes for most of its budget, but nearly half the city's land is tax-exempt, with hospitals and universities as some of the biggest landowners in town.

• The tax gap has left officials pressing universities and hospitals for voluntary payments in lieu of taxes (PILOT) to help cover services like police and fire.

By the numbers: The $104.3 million deal includes $37.5 million in cash payments and $66.8 million in community benefits like scholarships for Boston Public Schools graduates.

• BU's annual cash payment would rise from $6.3 million in FY26 to $8.3 million by FY30, roughly a third above its FY25 amount.

State of play: PILOT compliance varies widely. Hospitals generally pay closer to what the city requests, while universities lag.

• Boston College has drawn particular scrutiny for contributing a small fraction of the city's request and declining to file community benefit reports.

What's next: City officials hope the BU agreement raises pressure on other schools to sign similar multi-year deals.

Bottom line: The BU deal gives Boston a larger and more predictable revenue stream, but it doesn't resolve the entrenched tension between the city's reliance on property taxes and colleges' large tax-exempt footprint.