By Linda Scott
Watertown Resident
This is the second part of three looking at the impacts of the Life Science Industry on Watertown. Part One focused on the impact on housing and the environmental impacts. In Part Two, we’ll look at the costs to the City of Watertown to maintain safe control over the Life Science industry and its effects on our community.
In Part Three, we’ll look at linkage fees and how they could help our community. We’ll also look at how our community got into a position where in Watertown, a city well known for its fiscal responsibility, residential property taxes could soar to 18 percent higher by 2027.
Linkage Fees:
Let’s start with the linkage fees mentioned in Part One. For those of you unfamiliar with this concept, here’s some background. Linkage fees were first established in Massachusetts in 1983.
The concept: large commercial construction projects lead to certain imbalances in a community. Those areas are: affordable housing, infrastructure, and job shifts/demands. To offset the impact of these developments on a community, linkage fees could be charged.
The way it works: an ordinance would be passed in a city or town for large commercial, non-housing construction projects. These projects would be charged a linkage fee based upon the square footage of the project. These fees would go toward funding affordable housing, infrastructure improvement, and job training for the community.
Although linkage fees have been utilized in Boston since about 1986, generating over $200 million for affordable housing and job training, it’s my understanding that the legislation for linkage fees in Watertown came late in the game.
The Watertown City Council unanimously approved the linkage fee ordinance on April 11, 2023. This measure requires new commercial (non-housing) developments of 30,000 square feet or more to pay fees to support affordable housing. The fee back then was $11.12 per square foot. Currently, the fee is up to $11.81 per square foot.
My note: The purpose of Massachusetts linkage fees was not limited to affordable housing. It also included job training for residents and infrastructure improvements. At present, Watertown has chosen to use these funds exclusively for affordable housing.
I haven’t seen any of the specifics of how linkage fees have helped Watertown. How much money in linkage fees has Watertownof 16 20 received since the ordinance’s enactment in 2023, and how have these fees been used? I saw no mention of this in Sam’s report, so I’m guessing the number is zero.
Watertown’s Current Property Tax Problem:
This problem could severely impact Watertown homeowners, with their taxes increasing as much as 18.4% in 2027.
In Part Two, I linked you to a Watertown News article in which Earl Smith, Watertown’s City Assessor, was giving a presentation to the City Council on November 23, 2021.
In this presentation, Mr. Smith explained the complication that was about to have a devastating effect on Watertown’s residential property taxes. It was the first indication that a Watertown real estate tax crisis was imminent. There was no warning.
State Representative John Lawn recently said: “Watertown has experienced a great deal of commercial development, a lot by life science businesses, and it’s put us in a unique situation. We’ve had a lot of success … We now are a bit of a victim of our own success in terms of being stuck with this formula.”
What formula? This is at least the second time a formula has been mentioned: once in 2021, by Councilor Kounelis, and once in 2026 by Representative Lawn. How are we victims? How did Watertown get in a position where it needs to ask permission from the State to change this tax formula?
A State law was passed in the 1980’s that allowed more of the tax burden in cities and towns to be shifted from residential to CIP properties. (CIP = Commercial/Industrial/ Personal Property, which includes assets, goods, and material objects used in the conduct of a business).
The residential tax burden could be at 50 percent, however, there was a catch … a city’s percentage was frozen at what their historical minimum was at that time. For us, that was residential at about 61%, with the commercial tax rate at 39%.
Now, in the past ten years, the total assessed value of Watertown’s commercial property has gone up from18.87% to roughly 28%, and our residential property has gone down from 81% to just under 72%.
Even with this shift, our residential property owners are still, by law, responsible for paying 61% of the total tax bill, making for a large tax hike in the amount our residents pay in property taxes and a large tax break for businesses.
We’ve dodged this bullet once already. Councilors Airasian and Izzo went to the Statehouse with State Reps John Lawn and Steve Owens in 2022 to present a Home Rule petition, asking for the tax rates to be changed so that the residential tax rate minimum was 50% (not 61%).
That petition passed, but is due to expire by 2027. FYI, according to the our City Assessor, Earl Smith, that Home Rule Petition in 2025 alone saved Watertown residential taxpayers $35,903,777. But now, in 2026, that petition is about to expire, and we’re facing the same tax problem again.
An example given by our City assessor, under this formula for 2027: if there is no extension of this Home Rule petition, a large biotech corporation in Watertown (Alexandria) would pay about $2.9 million less in taxes. That $2.9 million would have to be picked up by the residents in their tax bills. And that’s just one large corporate entity in Watertown that would benefit tax-wise.
That’s why a delegation from our City went to the State Legislature for the second time, asking to make the first petition permanent. There’s no guarantee that this will be approved. See this link for a full report on that meeting with the State Joint Committee on Revenue: Citizen Portal AI
Here’s one of the statements made at that meeting: “Proakis said the consequence of that [commercial] growth, under the current statutory floor, is that more of any new tax burden would fall on existing residential taxpayers unless the Legislature acts.” See this Watertown News article for more details: https://www.watertownmanews.com/2025/08/14/watertown-to-request-residential-tax-relief-from-state-legislature/ .
A note: The figure 175% is mentioned. The City uses 100% of the value of the CIP property and then adds 75% more to base the commercial tax on, to alleviate the residential burden.
This is done in many Massachusetts communities, and with the passage of the newest Home Rule Petition, that rate would be codified, so the City doesn’t have to go back each year to ask permission from the State to do this.
We now know what our City leaders and staff presented to the State.
Question: Have large and influential Watertown businesses, life science and others, been lobbying against this petition to the same State Revenue Committee?
During the last Home Rule Petition in 2024, the Charles River Regional Chamber (the same people holding the meeting I referenced in Part One, featuring Sam Ghilardi and his report), wrote a letter to our City Council in opposition to the Home Rule petition, which would provide homeowner tax relief.
Besides an existing unrealistic and resident-punishing tax-sharing formula, what are other ways that residents’ taxes are going up? They’re going up in the traditional ways, city expenses:
Hiring of employees, increased infrastructure needs and capital projects. In the past few years, since our current City Manager has come onboard, our City’s expenses have risen precipitously, while slowing down our pay-off rate for our debts on things like paying off what we owe to fully fund our pension system.
Again, as Retired District A Councilor Kounelis said in a 2024 letter to Watertown City Councilors and then submitted to Watertown News, Entitled: “Time to Rein in Spending”:
“Is this how we advocate for affordable housing? And entice restaurateurs and small business owners to lease storefronts? The domino effect of real estate tax increases equates to higher rents. Rein in spending to stabilize real estate taxes.” For the full letter see: https://www.watertownmanews.com/2024/12/10/letter-time-for-city-to-rein-in-spending-to-stabilize-property-taxes/
So, even if we get this home rule petition passed, we need our City Council and City Manager to plan cautiously in these uncertain times.
One concern: Are we confident that we can definitively rely on our biotech businesses, that have a tendency to come and go, and whose buildings are 45% empty?
My Conclusions: It’s all a balancing act. Life Science/bio lab businesses, in general, are neither totally positive nor negative, but looking at the whole picture is the only way to get a clear perspective on their full impacts on our City.
My Opinion: We are nowhere near the beach, but I can feel the tide coming in, and we are on shifting sands. No offense to life sciences, but Watertown really needs to diversify as well!
We also need to take a serious look at our budgetary plans … We’ve already committed to lots and lots of new City hires (many administrative, not providing direct services to residents), including their raises and benefits, and we’re committed to completion of many infrastructure and building projects. We’ve scaled back our payments to pay for these, putting off fully funding our employees’ pensions.
In these financially and geopolitically fraught times, can we really afford to have a champagne taste on a beer budget? Do we really need to finance very expensive wish list and pet capital items, like “demonstration projects” which include a huge parking garage, that is very unpopular with Watertown residents and doesn’t directly serve our residents’ needs right now?
Thank you Council President Sideris, the Watertown City Council, City staff and City Manager Proakis and also State Representatives John Lawn and Steve Owens for taking the lead on this serious and impending tax problem.
We’ll be awaiting the Legislature’s and Governor’s decision. And if the answer is “No,” what’s Plan B?