This is the argument that always seems to get trotted out whenever Payments In-Lieu of Taxes (PILOTS) are proposed for big non-profits like colleges.
“But we do so much great stuff for the city blah blah blah.” It’s crap.
Lots of businesses do great stuff for the city. Santucci’s Pizza makes my neighborhood a great place to live. They give people jobs, they have nice outdoor seating that makes the streetscape look great, they draw people to the neighborhood, they probably donate some profits to charity at the end of the year, and they make me delicious pizza. They do so much great stuff and they also pay taxes.
Simply pointing to all the good spillover benefits your institution delivers to the city isn’t a persuasive argument. You need to show that the marginal value of those spillover benefits is higher for the city than what they’d get if you were paying property taxes. That has to include the opportunity cost from your land use too.
Non-profit universities and other institutions eat up a ton of prime land, and they should at least pay taxes on the land value, since there’s an opportunity cost to the city there: maybe somebody would decide to build an office building in University City that would contribute property taxes if Penn wasn’t building another untaxed dorm in that spot.