Clubs Follow Many Roads To Arrive at Lower Taxes

The year 1984 wasn't a great one for George Orwell, and it wasn't so hot for the University's nine all-male final clubs.

Four years ago, Harvard severed its ties with the clubs, depriving them of the right to use low-priced University steam heat and Centrex phones.

At nearly the same time, the clubs--as well as many other Cambridge property holders--were informed that their taxes were going up.

Starting with fiscal year 1984, Cambridge changed the way it taxed property, establishing separate tax rates for residential property and commercial holdings. The commercial rate was made significantly higher than the residential rate.

The city also decided that the nine all-male clubs should be taxed at this commercial rate, currently about double the residential rate.


Unlike businesses, which can pass on a change in their tax payments to customers, the clubs' endowments had to absorb the additional losses.

Records obtained by The Crimson show that since that time, the clubs have used a variety of means to lower their taxes. They include: seeking permanent and annual tax adjustments, trading the promises not to change the facades of the clubhouses for lower estimated values upon which property taxes are based.

The clubs also appealed the city's decision to call the properties commercial but lost their case in 1986.

And in the past two years, the clubs appear to have stepped up such efforts, which often translate into thousands of dollars in savings each year.

Some of the clubs have agreed not to change their facades--a promise which is called an easement--in order to be permitted to rent out part of the building to private businesses. The four clubs which received the easements are the Spee, D.U., Phoenix and Fox. (See chart.)

Two clubs have gotten their assessed value--which serve as the basis for tax charges--lowered because of them.

Easements, however, do not always lower the value of a property and may actually increase it, some experts say.

In part, the experts say, the reason why the easements do not necessarily lower value is that the Cambridge Historical Commission has the power to postpone the demolition of any building more than 50 years old.

One local realtor, though not an expert on this type of property, says, "I think it's pretty difficult to tear down a building." The realtor said both the historical commission and the neighborhood would probably act to prevent such a demolition.

Two of clubs that signed easement agreements received in exchange for permission to house a profit-earning business in their basement. A former trustee of one of the clubs has said that the business brought in "a lot" of money.