Date October 5, 2023
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With pacts approved, Brown to contribute $175 million in direct voluntary payments to Providence

The Providence City Council approved two agreements that establish Brown and Providence’s other colleges and universities among the nation’s most generous voluntary financial contributors to the city in which they operate.

PROVIDENCE, R.I. [Brown University] — A vote by the Providence City Council at its Thursday, Oct. 5, meeting approved a set of agreements that establish Providence’s four colleges and universities among the nation’s most generous voluntary financial contributors to the city in which they operate.

Through two approved agreements, Brown University, Johnson and Wales University, Providence College and the Rhode Island School of Design will contribute $223.5 million in direct payments to the City of Providence from 2024 to 2043, as well as annual community contributions valued at a total of an additional $177.5 million.

Brown University’s contributions of nearly $175 million in direct payments over 20 years will more than double its annual payments to the city, strengthening its commitment to supporting the well-being of the local community through education, research, community engagement, climate resilience and economic development.

In addition, the University will provide community contributions valued at an average of $6.4 million annually, which support investments in priorities such as K-12 education, community programming and scholarships for local residents. The combined financial impact of voluntary payments and community contributions from Brown will total $303.3 million in benefits to the city between 2024 and 2043.

“The approval of these landmark agreements marks an extraordinary moment for the city and its higher education institutions, and we’re proud to have cemented Brown’s investments in the success of Providence for decades to come,” said Brown President Christina H. Paxson. “The agreements are rooted in a spirit of partnership and a commitment to helping the city and its residents thrive. We’re excited to expand significantly upon the myriad ways in which Brown makes a meaningful and positive impact in our local community.”

On Sept. 5, Providence Mayor Brett P. Smiley joined Paxson and leaders from the city’s other colleges and universities to unveil two proposed agreements — one between the city and all four schools and a separate agreement in which Brown pledged additional financial commitments. The agreements followed months of research, engagement and collaboration between the mayor’s office and four higher education institutions. Smiley prioritized new voluntary payment agreements with the city’s colleges and universities in his first year in office, with the payment schedules for prior agreements culminating in 2023. After review by the City Council’s finance committee and a late-September public hearing, the full City Council approved both agreements in a 9-1 vote on Oct. 5, marking the final step required before the city and schools formally execute the agreements.

“This new agreement sets Providence on a stronger financial path forward and it makes our city a national example of what is possible when communities and their major anchor institutions work together,” Smiley said in an announcement after the vote. “Together, we are laying the foundation to make Providence the world-class city that the brightest students, faculty, doctors, researchers and employees want to live, work and learn in. I want to thank the Providence City Council for their careful consideration of this agreement, and I want to thank each of the institutions for choosing to make these investments that will positively impact Providence for generations to come.”

Brown’s increased financial commitment reinforces the University’s ongoing impact as the largest voluntary financial contributor to the city. In the last decade alone, Brown has made more than $80 million in direct payments to the City of Providence and has served as an invaluable community partner, both through voluntary financial support and myriad services, public health initiatives, educational programs for local kids, and more.

Financial contributions detailed in two formal agreements

Brown’s commitments are spelled out through two comprehensive, multi-year agreements approved by the Providence City Council.

The first is a memorandum of understanding (MOU) between the City of Providence and the colleges and universities in the city: Brown University, Johnson and Wales University, Providence College and the Rhode Island School of Design. Over the duration of the 20-year agreement, the institutions will directly contribute more than $177 million to the city, of which Brown will provide $128.7 million.

Brown’s additional financial commitments are outlined in a separate memorandum of agreement (MOA) with the city, through which the University has committed an additional $46 million in voluntary payments to Providence over the next 10 years. With the two agreements, Brown is committed to contributing $174.7 million in direct voluntary payments to Providence between 2024 and 2043, increasing its current average annual investment in city finances to $8.7 million.

The new MOU between the City of Providence, Brown, Johnson and Wales, Providence College and RISD bolsters the long-standing partnership between the city and its four institutions of higher education. The MOU outlines five areas that the city and the colleges and universities will address collaboratively, with all or a substantial majority of the voluntary payments earmarked for city investment and expenditure in the following areas of priority:

  • pre-K-12 education;
  • equity, diversity and inclusion;
  • community safety and well-being;
  • promotion of the City of Providence as a safe, vibrant and inviting place to live, work and learn;
  • and climate change and resiliency and adaptation infrastructure and policy.

Over the course of the 20-year MOU, Brown will contribute $128.7 million; Providence College will contribute $18.4 million; and RISD and Johnson and Wales will each contribute $15.2 million.

Improving quality of life, climate resiliency and more

The agreements also create channels for identifying and addressing key areas of concern among city residents, including a Quality of Life working group through which city leaders and the higher education institutions can proactively partner on bringing resources and expertise to bear on developing and implementing solutions.

When the proposed agreements were unveiled in September, Russell Carey, Brown’s executive vice president for planning and policy, noted that the city’s growth and financial sustainability is critically important to the Providence colleges and universities — and Brown, as a vital anchor institution, is committed to positioning the city for prosperity.

“The health and vitality of Providence and that of Brown are deeply intertwined,” Carey said at the time. “We are committed to working with and in support of city leaders to keep Providence as a welcoming, safe, diverse and fiscally stable city, and that impact radiates through the entire community.”

The direct financial contributions outlined in the MOU demonstrate a shared commitment to supporting the long-term fiscal health of the city, marking a substantial increase in voluntary payments compared to the previous 2003 MOU.

In addition, introducing a community contributions component to the new agreement recognized that Brown and the other schools do and will continue to make a significant social and economic impact beyond voluntary financial payments, Carey said. The four schools will match the dollar amount of their direct financial payments to the city through community contributions, which can include both financial and non-financial support for programs, services and activities that benefit city residents and students. Community contributions may involve voluntary services provided to city employees, scholarships awarded to Providence residents, and support for K-12 education.

The MOU also commits the city to retaining its current zoning ordinance standards for institutional districts and maintaining the current Institutional Master Plan process, a formal planning process required preceding new phases of physical development for higher education and health care institutions across Providence.

Per the MOU, the city will report annually on the impacts to the Providence community of the institutions’ voluntary financial payments.

Advancing the unique partnership between Brown and Providence via an MOA

Brown’s exclusive MOA with the city to contribute the additional $46 million in direct voluntary payments — beyond the terms of the joint MOU —  aligns with the University’s ongoing investment in local community engagement initiatives.

The University has a longstanding commitment to initiatives focused on the educational needs of the children of Providence. Brown awarded $1.7 million in scholarship support to Providence high school graduates in 2022 and also contributes an average of $1 million in support to the Providence Public School District each year, in addition to tutoring and mentoring up to 5,000 students annually in K-12 public schools.

In the last decade, Brown also has invested millions of dollars in financial and in-kind donations to support dozens of local organizations, including the United Way of Rhode Island, Family Service of Rhode Island, Progreso Latino and the Providence Public Library. In addition, the University invests generously in ongoing infrastructure improvements that revitalize streetscapes, create new open spaces for public use and increase the tree canopy in local neighborhoods.

The terms of the MOA between the city and the University include a 10-year payment schedule, with Brown contributing $6 million in the first two years, $5 million in the following two years, and $4 million in the remaining six years of the agreement.

The MOA has a “contribution credit” provision that recognizes Brown’s activities that create a positive economic impact on the city through incremental tax revenue. The MOA stipulates that the city may award Brown a credit toward its annual voluntary payment for direct investments in development projects done in collaboration with the city or with a public or private-sector partner, such as workplace housing, childcare facilities or the creation of new public plazas and parks. In addition, the MOA contains a provision that Brown may reduce its annual voluntary payment should the city realize new tax revenue generated by either Brown’s development projects, or through the sale of University-owned tax-exempt property that places property back on the commercial tax rolls.

As part of the agreement, the city will support Brown’s acquisition of four blocks in the Jewelry District: two blocks of Richmond Street and two blocks of Elm Street. A section of Cushing Street in College Hill was initially included in the proposed MOA, but an amendment before the City Council vote removed that provision. Plans for these blocks, including opportunities for pedestrian-friendly green spaces, will be developed over time in consultation with neighborhood and community partners. The city will extend a parking agreement — included in the 2012 MOA, which leases on-street parking spaces on College Hill for use by Brown employees — through 2053 (a change from the original date of 2043 included in the proposed MOA).

Funds from the MOA will enable the city to relocate the Providence Police Department substation on Cushing Street in Providence to another permanent location.

The terms of the multi-party MOU agreement also preserve the tax-exempt status of the four colleges and universities and stipulate that the city will refrain from additional requests for financial contributions, among other terms.