Boston University has reached a payment in lieu of taxes agreement with the city of Boston, committing to contribute $104 million in cash and community benefits over the next five years. The deal marks the first written PILOT agreement between the university and the city in more than 25 years and represents the largest such arrangement in Boston’s history.
Under the terms of the agreement, BU will make annual cash payments beginning at $6.7 million for fiscal year 2026, with the amount increasing incrementally to reach $8.3 million by fiscal year 2030. In addition to direct payments, the university will provide community benefits valued at $12.7 million in fiscal 2026, scaling up to $14 million annually. Combined, these contributions will total approximately $22.3 million per year by 2030, representing a 19 percent increase compared to what the institution paid during fiscal year 2025.
The agreement underscores the financial pressures facing Boston, where approximately half of all land is tax-exempt due to institutional holdings. City officials have long sought increased voluntary contributions from major anchor institutions, including Harvard University and Massachusetts General Hospital, to offset budget constraints. Mayor Michelle Wu characterized the deal as reflecting a broader partnership philosophy, stating that thriving institutions and a well-resourced city are mutually dependent.
Advocates for increased PILOT payments have emphasized the burden that tax-exempt properties place on city residents and taxpayers. Members of organizations such as the PILOT Action Group have called for greater participation from large institutions in supporting municipal services and infrastructure.
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