ITHACA, N.Y.— Cornell University’s offer to contribute $4 million a year to the city was called “insulting” and “disrespectful” by members of the public at a special Common Council meeting Wednesday.
Nearly 100 people filled the council chambers at City Hall Wednesday on a night that featured few face masks and an air conditioning system not accustomed to servicing more than a handful of individuals in a given night. Most came to urge members of council to reject the proposed deal that was announced last week in a joint statement from Ithaca Mayor Laura Lewis and Cornell President Martha Pollack.
Speakers collectively called on council members to do “whatever it takes, for as long as it takes,” to get a fair deal from Cornell.
The meeting was scheduled to hold a vote for council members to either accept or reject the proposed Memorandum of Understanding (MOU) agreement that outlines Cornell University’s annual financial commitment to the city.
But the terms of the deal were met with public criticism and council trepidation so great that council postponed the deciding vote until Oct. 11, giving the public more time to share their thoughts and council members more time to sit with the deal. (Read the full MOU proposal here)
Lewis announced the postponement, moved by Alderperson Robert Cantelmo, during her opening statement before the start of Wednesday’s public comment period. This special meeting on Oct. 11 is scheduled directly before a budget meeting.
Negotiations came to a halt in early August when representatives from the university declined to offer the city more than $3.15 million a year in the new MOU, up from the $1.6 annual voluntary contribution currently. After a month-long stalemate, Mayor Laura Lewis wrote in a statement Sept. 7 that this was a “lost opportunity for Cornell to invest in and garner the support of its community.”
After returning to the drawing board, details of a proposed final agreement were released Sept. 14 in a joint statement from Lewis and Pollack, which announced the $4 million annual voluntary contribution as part of the 21-year proposal. The deal is contingent on approval from both the Common Council and Cornell’s Board of Trustees.
Vice President of University Relations for Cornell University, Joel Malina, addressed members of council more than halfway into the meeting, which lasted a little under four hours. He was joined by Jared Pittman, associate general counsel at the university and member of its negotiating team early on in the process.
Malina fielded a series of questions from council members in a discussion that was more reminiscent of a courtroom cross-examination than a typical Common Council meeting.
“We recognize the financial challenges the city faces,” Malina said. “That’s why we sought an agreement, why we’re putting dollars to this and why we’re choosing to make an extra payment of $2.4 million within 30 days of council accepting the offer.”
At any time, with six months notice, the city or the university have the ability to cancel the MOU. Lewis said if the city determines it would be in its best interest to cancel the agreement, “then we can do that.”
Among plenty of complaints about the duration and contribution amount in the proposed MOU, members of the public, as well as council members, expressed near unanimous distaste for section 6 of the MOU. That section, which was leftover from the initial 1995 MOU, effectively bans the city from lobbying, on a state or federal level, for changes in the tax-exempt status of institutions like Cornell.
Asked directly by Alderperson Rob Gearhart, Malina was explicit that the university largely will not amend the agreement as it is written, but said they would be open to certain changes to section 6 if it meant the approval of the entire deal. He agreed the school should not be interfering with legislative action of council, such as lobbying.
“What is important to us is that the clause around judicial action remains,” Mailna said. “We do not think it is appropriate for us to be in this relationship only to have the city turn around and sue us for our tax-exempt status.”
Outside of section 6, Malina said, “the agreement is not open for amendment.”
At present, the financial details and other stipulations outlined in the MOU document will not be up for renegotiation until it expires in 21-years in 2044. A handful of council members said prior to the meeting the duration of the MOU is problematic for them and their constituents.
Predictability was “very much at the forefront of Cornell’s concerns” when deciding on the length the MOU will remain active.
Council members criticized Malina, as a representative of the university, about the duration of the agreement and the university’s reasons for drawing the line at $4 million per year.
Alderperson Phoebe Brown asked Malina several times if he would be willing to participate in a town hall-style event for the public to share their thoughts, which Malina hesitantly said “he would consider.” But the decision, he reiterated, has to be made by council.
“It is not Cornell’s desire to make this a popular vote. This is a decision for elected officials to decide,” Malina said.
Alderpersons Jorge DeFendini and Tiffany Kumar jousted with Malina over why Cornell’s offer increased after Lewis’ office released a statement announcing negotiations stalled.
To them, this was evidence Cornell was not “acting in good faith,” since the university’s new offer of $4 million proved there was more room to budge.
DeFendini insinuated the timing of the offer was purposeful, as it came just weeks before the city’s 2024 budget was due to be discussed and finalized. The absence of a financial commitment from Cornell to the city would create a significant budget shortfall that could result in a “radical increase” in property taxes for residents.
“Everyone at this table is concerned about the budget,” DeFendini said. “To me, that sounds less like a partnership and more like a hostage situation.”
Malina assured council members that the university is “not imposing a deadline” and that this is “not a power play.”
Lewis reiterated her support for the agreement throughout the meeting and said the increase to voluntary payments is “significant,” along with the university’s offer to contribute an additional $2.4 million to the city’s 2023 budget.
“I don’t view that as pressure on the part of Cornell,” Lewis said. “I understand others might view it differently, but I do support this.”
The size of Cornell’s endowment, which reached a record $10 billion at the end of the 2021 fiscal year, and how it’s factored into the university’s offers during negotiations has been a point of contention among electeds and residents.
Malina said that while the university does have a large endowment, it is not “by any means the largest” among other similar institutions.
He said universities are required by law to use endowment funds for the specific purpose the entity donating asks they be used for. Cornell has a 5% payout, which means out of their endowment, 5% of those funds are used by the university for financial aid and other elements of its budget.