The town council approved a new 15-year payment-in-lieu-of-taxes (PILOT) agreement with Massport last week for the agency’s use of just over 190 acres of land in Winthrop for Logan Airport.
The agreement sees a 42 percent jump in the PILOT payment in the first year of the agreement in exchange for smaller year-to-year increases over the life of the agreement.
Several councilors did question the length of the agreement, as well as the limited time they said they had to review it.
PILOT agreements are ways for towns and cities to collect funds from nonprofit or government agencies such as Massport that utilize land in the municipality, but are not subject to real estate taxes.
Town Manager Tony Marino noted that PILOT agreements are different from mitigation funds, and that mitigation funds for the impact of a project on the town, and those must be negotiated through a specific project, such as the proposed new airport parking garage. Massport’s charter dictates that it must have a PILOT agreement with Winthrop, but does not specify the amount.
The current contract with Massport ran from 2005 to 2025, with a one year extension that was approved by the council for 2026. That contract saw the town initially receive $900,000 annual payments; with the payments increasing to $1.2 million in 2018, $2 million in 2025, and $2.1 million for the one year extension.
“This will be a 15-year deal starting on July 1, 2026 through June 30, 2041; the FY27 payment will increase from $2.1 million to $3 million, which is a 42 percent increase over FY26,” said Marino. “Payments will increase by 1 percent for the first 10 years, and then 1.5 percent for the remaining five years, culminating with a payment of $3,517,217 in FY41.”
Given the length of the contract, Marino said there is one trigger that if inflation goes above 5 percent in the last five years of the contract, the payment will increase by 2.5 percent rather than the 1.5 percent.
“One of the things we pushed for was to try to get the more money up front,” said Marino. “The initial offering from Massport was $2.5 million in the front with a slightly higher inflation rate; but when we did the math on getting additional money up front it ended up being beneficial … that three million is worth more today than it would be in five years and we ended up by doing it this way getting about $2 million more over the long haul of 15 years.”
In addition, Marino noted that the town has received one particulate meter to measure air quality in Point Shirley and is expecting a second from Massport.
“This was a couple of years we were involved (in negotiations) and we are certainly happy with the agreement,” said Marino. “The 42 percent increase is the most it has ever gone up and getting that money now will help.”
Marino said the council has discussed using the PILOT funds not just to roll into the general fund, but to possibly set up a stormwater fund to help pay for stormwater mitigation and infrastructure projects in the town.
Council President Jim Letterie said he supported using the majority of the funds to leverage needed infrastructure projects.
“It would eliminate the need of having to go out for debt exclusions for some of these projects,” he said. “I love the 42 percent increase, but I don’t think that is something where we are going to say, okay, now we have another $900,000 increase in the budget.”
Precinct 1 Councilor Pat Costigan said that he and other councilors only had two brief 30 minute sessions to review and discuss the agreement before it came to the full council for a vote.
“The time the council had to discuss this was very, very limited,” said Costigan. “I feel that tonight, the council can’t really make a very educated decision based upon the limited time and information to review this overall proposal.
Costigan noted that he would have liked to have seen at least an additional $1 million come to the town through the agreement, especially given the potential health-related issues caused by possible air contaminants from airplanes and the airport.
Costigan also noted that the property values and revenue collected by Massport just for the Winthrop property alone can vary from $50 million to $150 million per year.
“It is very, very valuable property for Massport, and they are utilizing Winthrop property for their profitability,” said Costigan. “Frankly, I’m not comfortable with a 15-year contract unless that $1 million is added on to it.”
Costigan, along with Councilors Suzanne Swope and Joseph Romano, voted against signing the new 15-year agreement with Massport.