Where will MIT be in 20 years?
MIT 2030 plan underscores academic and commercial tension
Source: www.Sixtenmit.com
Courtesy of the mit investment management company
Novartis Institutes for Biomedical Research
MIT unveiled a long-term vision for the next 20 years of its development — “MIT 2030” — this spring. Though not a concrete plan in itself, MIT 2030 is essentially a collection of campus renovations, new construction, and real-estate development projects, some of which have already started.
MIT 2030 can be thought of as a “compilation of the best thinking” on how MIT’s physical campus can meet its academic vision over the next 20 years, then-Executive Vice President and Treasurer Theresa M. Stone SM ’76 told The Tech in June. The 2030 framework in its current form outlines several major off-campus developments, including the construction of new research complexes for pharmaceutical giants Pfizer and Novartis just north of central campus and a overhaul of the Kendall Square area near the eastern edge of campus.
MIT also hopes for two new research facilities of its own: one for nanoscale research, and another for energy and the environment. The Institute is currently in the process of selecting sites for those new buildings. Existing academic structures, including Building 2 and Walker Memorial, are anticipating renovation within the next 10 years. From 2020–2030, most of the Main Group buildings could see renovation, in addition to several dormitories and residential buildings.
But the 2030 vision is not uncontroversial. The November/December 2011 Faculty Newsletter asserted — in the form of a coordinated set of columns and editorials — that the administration and the MIT Investment Management Company (MITIMCo) were pursuing a 2030 vision without adequate consideration of academic requirements.
“The plans in MIT 2030 involving the revitalization of the existing campus have had limited direct faculty involvement,” said the newsletter’s editorial. “This is regrettable, as it deprives the planning process of potentially significant inputs from a supportive and important constituency.”
MITIMCo, which manages MIT’s extensive real estate holdings in Cambridge, was a particular focus for criticism. O. Robert Simha, director of MIT’s now-shuttered planning office, wrote in the FNL that 2030 gives MITIMCo the ability to lease properties which were initially earmarked for academic use. Recovering properties after long-term leases (at least decades) — like ones being hashed out with pharmaceutical giants in the area — could be expensive for MIT.
“There is no reference in the 2030 plan to the long-range implications of the creation of high-value real estate in areas earmarked for ultimate academic use,” wrote Simha. “Implications that would include the cost to the academic budget to buy from the MIT Investment Management Company buildings needed for academic use at market prices, and the parallel implications of the loss of tax revenue to the City of Cambridge.”
MITIMCo has often justified its real estate ventures by arguing that commercial development attracts scientific talent, preserves Cambridge’s global competitiveness, and ultimately benefits MIT. This year, both MITIMCo and President Susan J. Hockfield have repeatedly called for the creation of an “innovation cluster” in the Kendall Square area.
But — when it comes to academic development and campus renewal — where does the money for MIT 2030 come from?
The first decade of new construction and renovation is expected to cost $1.5 billion ($500 million for new construction, and $1 billion for campus renovation and capital renewal). To finance half of that, MIT sold $750 million in 100-year taxable bonds last year, which yield 5.6 percent interest.
People or organizations who purchased these bonds have effectively loaned MIT money. In return, the Institute promises to pay back the loan, with interest, within 100 years. Stone said the investors tend to be “very high-quality” institutions, including large insurance companies and money managers in the United States and Europe.
MIT 2030 ties in to the ongoing efforts of the City of Cambridge to enhance Kendall and Central Squares. MITIMCo owns a substantial amount of real estate in the area, and its plans for those properties have faced scrutiny from the city. MITIMCo’s emphasis on new office and lab space is often countered by the City’s interest in more residential property than MIT tends to initially offer in new developments.