By: David A. Smith
Captain: What we’ve got here is failure to communicate.
– Cool Hand Luke
As yesterday‘s Part 6 made clear, in the collapse of a possible era of good feelings between the Town of Hamden and the possibly symbiotic organism growing with frightening rapidity inside its boundaries, Hamden had had plenty of opportunity to see what Quinnipiac was like, both in Quinnipiac’s acquisitive and collegial dealings with poorer North Haven, which embraced university expansion, and in the university’s willingness to rebalance the faculty with only slightly more etiquette than one would rebalance a stock and bond portfolio.
Please be antiseptic when laying people off (excuse me, declining to renew their contracts)
All this failure to see what the other side meant resulted a month ago in a remarkable decision, by QU’s President John Lahey to go on the record with the New Haven Register (October 10, 2015) so it could published his read-my-lips testimony – indeed, perhaps a testament – of the full particulars of what Quinnipiac was doing (quitting expansion in Hamden), and why it was doing that (inability to rely on Hamden as a consistent and accountable counterparty in a multi-year expansion strategy).
Principal sources used in this post
Inside Higher Education (May 14, 2014.; olive font)
New Haven Register (November 19, 2014; turquoise font)
New Haven Register (January 4, 2015; cyan font)
Hamden Patch (March 5, 2015; pink font)
New Haven Register (June 8, 2015; brown font)
New Haven Register (September 15, 2015, olive green font)
Quinnipiac Chronicle (October 21, 2015; buff blue font)
In his hasta-la-vista, baby interview a year and a half later, President Lahey made Quinnipiac’s reasoning crystal clear:
I won’t be back … to Hamden
“The town of Hamden is not happy that we have grown to 10,000 students,” Lahey said. “They told us they didn’t want us to grow, so why do you think we went to North Haven? We wouldn’t have a medical school if we had to go through Hamden,” he said.
To bring home what that conclusion meant for Quinnipiac, let’s do some basic arithmetic.
Quinnipiac’s Frank H. Netter School of Medicine, Quinnipiac’s take from a year’s attendance (tuition and fees, excluding computer, equipment, living allowance, transportation, and loan fees) is $54,310, and last year’s medical school enrollment was 241.
As of right now, assuming all the students pay full tuition (either in cash or via student loans), Quinnipiac’s Medical School is generating $13,100,000 annually in revenue for Quinnipiac, and whatever the overhead and operating costs, that has to be a significant contributor to Quinnipiac’s revenue sources.
AHI posts on town-gown housing and taxation tensions
Moreover, after a first class (2017) of 60, the newest class is 91 (1.5x as large), and over the same period applications quadrupled (from 1,914 to 7,556, basically 4x), meaning that the school is becoming more selective, and strongly implying the medical-school classes can continue to grow. Further, with the school campus already built, each new student will generally be a bit more marginally profitable than the current ones.
Quinnipiac would not lightly have decided to launch a whole second campus in another town; but if staying solely in Hamden meant having no medical school, a university committed to strategic national and potentially global expansion would have had no real choice.
Across the town line!
Quinnipiac came not as a bivouac or an outpost, but as a permanent settlement:
Now the school’s focus will remain on North Haven, he said.
Within five years, the university plans to have more than half of its operations located in North Haven, Lahey said.
The result is a major capital flow to one town and not to the other:
In the last five years, the university has spent $300 million building its North Haven campus and nothing on any Hamden projects, Lahey said.
Room to expand enrollment and classrooms, with housing down the road
In 1916, what was then known as Boston Tech, feeling itself landlocked in its Back Bay location of two buildings, made a bold decision to cross the Charles River and take up new quarters in what was then a largely undeveloped and isolated section of Cambridge.
MIT left these two buildings …
… for this (Charles River Road is now called Memorial Drive)
Next year that new campus will celebrate a century in Cambridge – and Harvard notwithstanding, we’re glad to have it.
MIT’s Great Dome, under construction, 1916
While it‘s many decades too early to put Quinnipiac in that same category, there’s plenty of evidence that President Lahey and his Board of Trustees are thinking big and buying big:
Plans there call for the construction of a new science research facility, engineering labs and office space for the school’s administration, including his office, Lahey said.
And what they’re buying is North Haven land, not Hamden land.
Quinnipiac has recently purchased almost 100 acres of land in the area of Kings Highway in North Haven, which is just over the town line near the Mount Carmel campus, he said. A portion of that property will likely be used for an equestrian center, with the rest could be used for potential university expansion.
Indeed, not only did Quinnipiac buy the land, a full month before Lahey’s breakoff interview, the full details were reported (New Haven Register, September 15, 2015, olive green font):
In June, Quinnipiac paid $4.2 million for 38 acres of land with a seven-bedroom, 7,000-square-foot, single-family residence with a five-car garage located on properties at 999 and 1001 Mount Carmel Ave. in North Haven. The university is located at 275 Mount Carmel Ave. in Hamden.
What has QU bought? 999 Mount Carmel Avenue, North Haven
In December of 2013, Quinnipiac paid $610,000 for a 3,300-square-foot house on 5.2 acres at 1155 Mount Carmel Ave. in North Haven, and in June of that year spent almost $3 million for another 32 acres of land on Kings Highway, which intersects Mount Carmel Avenue. The school is in the process of also purchasing 977 Mount Carmel Ave., a 9-acre parcel with three barns and a 2,500 square foot house.
Bit by bit, in other words, Quinnipiac was assembling land for a big new campus. Equally revealing, in this instance, is what happened after Quinnipiac bought and before it took any action with respect to its new property:
North Haven First Selectman Michael Freda said the university contacted him several weeks ago about the possibility of starting the program on the property purchased in that town.
“I really appreciated the courtesy phone call from Quinnipiac University telling me in advance that this is what they were considering doing,” Freda said. “That helped me address some phone calls I got from residents and I was able to explain what the possible usage will be. In my mind, it’s a good usage and should have no impact on the residents of the area.”
7. University property is generally exempt from real estate taxes, so adding land is a point of tension
Universities that are non-profits are generally exempt from real property taxation, and while there are public-policy justifications for the exemption, the benefit may be felt regionally or even nationally, but the cost is born locally, so universities that are expanding their footprint in a town are usually careful to negotiate PILOTs at the time of acquisition:
Quinnipiac also will continue to pay property taxes on university-owned property not currently being used exclusively for educational purposes. Quinnipiac paid $322,354 in property taxes during the 2013-2014 fiscal year.
The same logic – optimize revenue flows (student to teacher ratio) by business lines (college majors and graduate schools) – also applies to Quinnipiac’s management of its real estate portfolio. Somewhere within Quinnipiac’s administration, therefore, are two actuarial specialists: one projecting the fluctuating growth and mix of interests of the matriculating annual student bodies, the other matching that against projected real estate footprint: classrooms, laboratories, studios, cafeteria and amenity space, and housing.
And this brings us, finally, to an ill-fated Memorandum of Understanding (MoU) between Quinnipiac and the Town of Hamden that became Quinnipiac’s eventual breaking point:
A memorandum of agreement that was supposed to accompany the check was never signed, and Jackson accused the university of expecting a “quid pro quo” — that it would get its zoning approvals in exchange for the payment, Lahey said.
Translated from the ancient Hebrew, it says emm oh yew
As this seemingly innocuous document became a flash point for relations, a full six months before President Lahey’s interview, we will do well to study it in depth. After a preamble full of homilies, the MoU (draft as of October, 2014, pdf; Kelly green font) then recites carefully that the university will make a “voluntary payment to the Town” equal to 40% of “the amount that the Town receives from the State under the PILOT and PEQUOT Programs” up to a cap of 100% of what the Town would have received if all of QU’s property were taxable, which the MoU then stipulates for 2014-15 will be $1,231,934.
It goes on to include these four substantive paragraphs:
2. The University will continue to pay property taxes on university-owned property not currently being used exclusively for educational purposes ($322,364 in 2013-14).
3. Voluntary payment by the University will be inclusive of funding for the following items currently being paid by the University: All police and fire services, including coverage of Quinnipiac athletics, special events, and both regular and special police and fire coverage, including Q1 and Q2.
That is, aside from QU maintaining its own security force (campus police), if QU uses any Town police or fire services, QU will pay these costs on top of the baseline $1.23 million.
Grip, grin, and don’t tear the check, Scott: President Lahey presenting the $1.23 million to Mayor Jackson
Additionally, the MoU provides that:
5. The University will agree to participate in a Community Forum annually to address community concerns, discuss its housing plans and other development projects in an effort to work with all stakeholders to continue to support and improve Town/ gown relations.
So far, all the MoU provisions referenced or quoted are one-way: they provide the Town of Hamden with only benefits, and they present to Quinnipiac only costs. Then comes the clause that caused all the ruckus:
4. To the extent permitted by law, the Town and University will work together to amend the Town’s Zoning Regulations in an effort to streamline the process by which University development applications are proposed to the appropriate boards and commissions.
In conjunction therewith, the parties agree that a new University Zone and/or amendment to the current University use regulation would be considered to promote greater flexibility or University-owned and operated housing located within the University Zone.
A new university zone ‘would be considered’ – not approved, but considered.
Is that orange enough? I’m considering it
When Quinnipiac made the decision to pay the town a yearly $1.23 million voluntary payment, it was made under the guidelines of the memorandum of understanding completed by the town and university in late October in which both entities agreed to work together to amend the town’s zoning regulations.
Personally, I avoid MoU’s wherever possible, because they’re either a contract (in which case they should be called a contract and be contractually accountable), or they’re non-binding, in which case they’re subject to lack of accountability. Nevertheless, people do use them, if only because the MoU, not being a contract, can sometimes be negotiated and signed without lawyers.
But as this document was being finalized, in mid-November, 2014 Quinnipiac got wind of a different action by the Town of Hamden.
Uh-oh, I think the humans have realized we’re tentacular aliens
[Continued tomorrow in Part 8.]