Buy and Swell

Washington University is swallowing chunks of University City, and that may be a good thing

Oct 17, 2001 at 4:00 am
Jack Prindable, a self-proclaimed rabble-rouser, is used to being on the receiving end of establishment ire. Members of the City Council in University City turn the other way when they spot him coming. Others simply pass him off as a crank, but Prindable, a slight man with graying hair, couldn't care less.

Last summer, when Prindable, president of the Lindell Neighborhood Association, asked the City Council to consider a four-month freeze on property sales to Washington University, the council swiftly rejected his proposal. Mayor Joseph Adams defended the university and its working relationship with the city. He told Prindable that Wash. U. was compensating the city by paying the salary of an additional police officer. The university's property was well maintained and an asset to the neighborhood. "I'm not getting into a debate here," Adams told Prindable. "What you're asking us to do would violate the U.S. and state constitutions. You need to check the legal cases."

Prindable seems mystified by the response. "All I was asking was for the university to voluntarily go into a four-month moratorium so a citizens' group could be formed to study the impact of the purchases," he says. "They laughed me out of the chamber. The mayor was bombastic and lectured me."

To Prindable, it was evidence of the city's unwillingness to determine what impact, if any, Wash. U. sprawl will have on the local tax base and the city's public schools. "There has been a failure to engage the total community in a fair and equitable resolution of this issue -- even though it impacts all residents," he says.

Trouble is, most residents aren't complaining. Although there was an initial rumble of concern during the first round of purchases in 1998, it has, for the most part, given way to a welcoming embrace. Housing-advocacy groups have been putting together proposals they hope will make Wash. U. reach into its deep pockets. And University City has been quietly meeting with university officials, including Chancellor Mark Wrighton, asking for contributions that will offset the loss in property taxes.

The requests are akin to pressuring a benevolent older brother to do a little bit more.

University City sprang up in the shadow of Washington University. The city's founder, Edward G. Lewis, named it for "Wash. U. specifically and education generally," says city manager Frank Ollendorff; hence the open book on the city seal. Ever since, the two have been intertwined: Hundreds of Wash. U. faculty and students are city residents, and university volunteers help write grants, donate artwork and give their time for city projects.

In the 1980s, when the northern part of the city was struggling, officials asked the university to purchase blighted properties in the Parkview Gardens area. The university gracefully declined. "At the time, the trend was to build dormitories," Ollendorff says. "They really didn't have a need for the buildings." But Wash. U. helped in smaller ways. While investors like Mike Giger bought properties in the declining neighborhood, students and faculty helped start community gardens and after-school programs. Using state and federal grants, the Parkview Gardens Neighborhood Association purchased and rehabbed blighted properties. Residents, including those on Eastgate Avenue, just north of the University City Loop, helped out, working weekly bingo games to raise funds for streetlights and building renovations. The neighborhood, with its large, affordable flats, has been on a steady upswing ever since. Several years ago, Giger and others went looking for another landlord they believed would build on their past work.

"We were invested in the neighborhood," says Giger, who is also president of the Parkview Gardens Neighborhood Association. "We weren't going to sell to just anybody who wanted to make a quick buck. We wanted to move the neighborhood to the next plateau. We wanted professional management and an ownership we could depend upon." They approached Wash. U., which bought 17 apartments, including some owned by Giger.

Two years later, a walk down Eastgate seems like a campus stroll. Red doors with green trim are covered with fliers advertising upcoming student activities. Brass plates mark 15 buildings on Eastgate alone as Wash. U. student housing. In just four years, Wash. U. has purchased 125 apartment buildings around its campus, 79 of them in University City. Under state statute, Wash. U. pays no property taxes. George Burris, executive director of off-campus housing, says the university started purchasing the property to ensure that affordable off-campus housing would continue to be readily available to students. With more than 6,000 students living off-campus, he says, it is likely that Wash. U. will continue to buy even more properties. Purchase contracts are pending on 20 more buildings in U. City.

"We are always looking," Burris says. "As opportunities arise, we will attempt to buy additional buildings that fit our needs."

Giger says that the purchases stabilize the neighborhood and offset any loss in property tax. "They provide a shuttle, more security, and maintain their property." Giger says. "Overall property values increase for the rest of the buildings on the street. What they are doing is a win-win for everybody."

For University City, $21 million of its assessed value has left the tax rolls because of Wash. U. purchases. "We are eroding the tax base and shifting more of the load to individual tax payers," Prindable says. The university doesn't need the tax break, he adds.

Burris won't talk about whether Wash. U. makes a profit on its apartment buildings. "Our goal is to eventually break even," he says. "We are not trying to lose money or make money. We just want to provide housing that meets the needs of our students." Nevertheless, the university has 514 apartment units with rents ranging from $250 to more than $800 a month and an occupancy rate of 96 percent.

"They are telling me to tighten the belt, and the university is sitting on millions," Prindable says. "There is something so philosophically wrong there, and it really bothers me. They are paying no property tax, and the retired widow on Social Security is seeing her tax bill go up."

Paul Schoomer, a city councilman, feels that all universities, not just Wash. U., should pay their share of taxes but adds that cities are in no position to demand that. "We can ask them," he says. "We can even plead, but we can't twist their arm to make them pay up because, legally, they don't have to. We are basically beggars who have no real recourse."

Ollendorff says that for this reason, polite requests are far more effective, especially when the property-tax revenue the city is losing is not significant. The city loses about $80,000 a year from Wash. U.'s ownership, but Ollendorff can rattle off a list of the university's contributions as well: $90,000 toward an additional police officer and overtime for other officers, at least $2,000 worth of donated sculpture, additional street lighting, work with the University City Children's Center and voluntary payment of property taxes on their commercial holdings on Forsyth and Big Bend boulevards. "They could legally not pay that," he says, "but they do it, and willingly. They provide to the city a lot more than they take off the tax rolls. I guess it is what you would call a mixed blessing."

But at what point does a mixed blessing become more of a curse? "I don't know where the right balance is," says Ollendorff. "I think as long as they remain involved in the community, it will be for the better. If they buy five more buildings and contribute $100,000 more to the city, I would say that is good. If they buy 10 more buildings and cut out all their assistance, I would say that is bad. It is a difficult question to answer."

As far as taking a hit on the property taxes, the School District of University City ought to be doing the complaining, because a large chunk of the taxes go to the district. The city gets only 12 percent of its revenue from property taxes, but 60 percent of the school district's budget comes from property taxes.

But the school district isn't complaining much, mainly because the numbers show that Wash. U. doesn't really have much of an impact on the district's budget. Charles D. Farris, the district's executive director of business and finance, says the Wash. U. apartments would generate $250,000 annually in school property taxes; the school district has a $35 million budget. Moreover, the university helps in other ways, he says.

"If we were losing $1 million or $2 million and not getting any cooperation, I would feel totally different than I do," Farris says. "All the negatives have been offset by the positive cooperation with the university." Superintendent Vern Moore agrees, saying he is more interested in a "very firm working relationship" than in getting property-tax revenue.

If there is a downside to Wash. U.'s purchase of apartment buildings in University City, it is felt by the low-income residents who have seen their rents increase.

Stephanie Topps and her three children used to live in a subsidized apartment on Eastgate Avenue. "I really liked it because it was right on the bus line," she says. "I could catch a bus to anywhere I needed to go." Topps lived there for 11 years.

When Wash. U. started buying buildings nearby, her landlord's property values also increased. Topps' rent skyrocketed from $350 to $800. She had to move. "It was really hard," she says. "My kids were hurt. They had to change schools. They had to leave their friends."

Brenda Stobbe, associate pastor at University Methodist Church, says Topps' story is all too familiar. Stobbe, who runs the church's after-school program for low-income kids, watched 19 children in her program leave, but it wasn't Wash. U. that pushed them out. It was other landlords who realized their properties were in a prime neighborhood and they could get more rent.

Giger says that not all poor people are being driven out. The Parkview Gardens Neighborhood Association used a federal grant to renovate 21 apartment buildings. All have been earmarked for low-income residents and will remain that way for 30 more years. "The diversity of people in this neighborhood is not going to change significantly," he says.

As for the charges of a shrinking tax base, Giger says, "It is a red herring. We have researched this to death. It really isn't that much."

Prindable doesn't argue with the numbers. He still believes cities should demand payments in lieu of taxes from all nonprofit entities buying property. "Proactive cities are going out and aggressively formulating plans and putting demands on these institutions," Prindable says. "Here they want to sit and talk about a police officer and daycare center. That is great, but those things are eyewash for substantive things like real money. The university needs to replace, dollar for dollar, everything they take out of the tax base."

Easier said than done, says Ollendorff. The city could protest, but it would be just a lot of noise. "Wash. U. has the right to buy what it wants," he says. "We could protest, but I would rather go with 'Help us out as part of the community.' It is a much better approach than saying, 'Get out of town.'"