Harvard Will Pay More To Cambridge in Accord

Breaking fresh ground in town-gown relations, Harvard University has entered into a 10-year agreement with the city of Cambridge that will substantially increase the university's payments to the city in lieu of taxes and will calculate a portion of those payments at current tax rates.

In a pact signed here on Monday, Harvard agreed to pay $100,000 a year more in voluntary payments to the city. It currently pays just under $1 million each year.

In addition, city officials said, the university has also agreed to make payments in lieu of taxes on five properties that it is removing from city tax rolls for academic use. The payments will be equal to the last tax bills issued by Cambridge and will generate an additional $179,000 each year.

Sheldon Steinbach, general counsel for the American Council on Education, which represents 1,600 colleges and universities around the country, called the agreement "quite a novel approach for collecting revenue and one I don't believe has been undertaken elsewhere." Quieting Complaints

In 1929, Harvard became the first nonprofit institution in the United States to make payments in lieu of taxes to its host community, university officials said.

Since then, other colleges and universities have tried to quiet complaints about their tax-exempt status by making contributions to local governments in the form of services, fixed amounts of money or tax-size payments on commercial properties, like bookstores.

In April, Yale University reached an agreement with the city of New Haven to contribute more than $2 million over the next five years to pay for Fire Department services and improvements to streets that run through the campus.

In September, the City Council in Evanston, Ill., caused a stir when it adopted a tuition tax of $15 a quarter on students at Northwestern University and three other colleges to help pay for city services. The Mayor vetoed the measure. Now Northwestern University officials are meeting with City Council members to devise other ways the university might help share city costs. Major Property Owner

Harvard and Cambridge signed their first 10-year agreement in 1968. In it, Harvard agreed to provide payments in lieu of taxes based on a percentage of the rental income from special housing for graduate students, staff and faculty members. That agreement was renewed in 1978 for 10 more years.

For the past two years, while Harvard continued its payments at the same rate, city officials have been eagerly pressing for more money. In addition to being one of the largest employers in the city, Harvard is also one of the largest property owners. City officials estimate that Harvard's tax-exempt property is worth about $71 million.

The city's other major university, the Massachusetts Institute of Technology, pays $767,000 a year to Cambridge in lieu of taxes.

"Cambridge has long been concerned about the loss of taxable property to the educational institutions," said Robert W. Healy, City Manager in Cambridge.