What Duke University Owns—and Owes
Duke University owns 3,300 acres in Durham County and pays just over $1 million in annual property taxes while the vast majority of its assets are completely exempt from local property tax.
This BCPI: Open Sources (BCPI.OS) article is written by Lucia Constantine with contributions from Brian Callaway. BCPI.OS stories focus on delivering data-driven discoveries from publicly-available datasets.
Town-gown relationships are never easy, and the relationship between Durham and Duke University has a complicated history. Duke is Durham’s largest employer and has provided strategic investment and support to its development. At the same time, Duke owns a significant amount of property across the city, the majority of which is not subject to property taxes due to its nonprofit status. As the city navigates growth pressures, the relationship appears to be shifting once again with residents, community groups, and some public officials demanding more from the university.
Earlier this year, Duke University put in two requests to rezone 13 of its parcels near East and Central Campus. Many of those parcels are currently zoned for specific uses, which meant the University was limited in its development plans. Rezoning them as University and College would give the university greater flexibility and consequently discretion over what they could build. Burch Avenue neighborhood was most directly affected by one of the requests, and under pressure from the neighborhood, Duke decided to withdraw its request to rezone the old laundry building on Gattis St. However, several parcels, including a large swath of Central Campus, are still up for debate since the City Council postponed their vote until October 7 and asked for more detailed development plans.
At the same time, a campaign, Duke Respect Durham, launched in May with the goal of having Duke University and Duke University Health System make voluntary payments in lieu of taxes or PILOT. Several local unions and community organizations have supported the cause. A petition circulating reads, “No amount of philanthropy, strategic community impact plans, or research-based interventions can replace public institutions available to all, financed by all, and capable of being held accountable through public procedures.” The group is having its first campaign kickoff event this Saturday.
Previous reporting by BCPI examined the possibilities of a Duke PILOT and provided examples of other institutions who already do so. To better understand the extent of Duke’s property holdings and their zoning, BCPI.OS examined county property and tax records.
How much property does Duke own?
Duke University and Duke University Health System combined are one of the largest property owners in Durham. Together, they own 174 parcels with 121 buildings that cover over 3,300 total acres. The combined total tax valuation of these holdings in 2024 was over $675 million, representing the highest of any property owner in Durham. By comparison, the City’s holdings which include 1,120 parcels and 164 buildings across 8,548 acres, are valued at $557 million.
The majority of Duke’s parcels (52%) are zoned UC or University and College. The designation gives Duke flexibility and control when it comes to zoning, allowing them to build everything from dormitories to stadiums. The remaining parcels have a mix of zoning classifications and include health centers, office buildings, two hotels, the golf course, and Duke Forest.
Tax valuation of Duke’s parcels
The vast majority of Duke’s property is not subject to property tax, but it does pay taxes on properties that do not have an educational purpose. This year, 17 parcels had tax bills totaling $1.08 million. However, several of those parcels, most notably the J.B. Duke Hotel, are not taxed at their full value. Tax records show the total appraisal value of the hotel to be $36,147,907 which at the current rate would result in a tax bill of $502,455, but because only $5,783,649 is “taxable”, Duke pays $80,676 in 2024 taxes at the site.
In its 2023 “Annual Report on Impact and Engagement”, Duke reports paying $3.7 million in property taxes across the state. If its current property holdings in Durham were taxed at their current County appraised valuation, Duke would be paying over $9 million in local property tax.
Duke’s West Campus is listed by the Durham County tax administration as a single parcel with an assessed tax valuation of $340,629,108 but an annual tax bill of $0. If the parcel was not exempt from local property tax, the 2024 tax bill would be $4,751,435 based on current tax rates.
But a closer analysis by BCPI.OS shows the Duke West Campus parcel is significantly undervalued—by at least three to four times, meaning the tax revenue potential, if exemptions did not exist, could be more than $16 million for that parcel alone.
BCPI.OS collected tax and other property data for six other commercial and institutional properties across Durham that included sites containing a collection of uses that are also found–granted at a much grander scale–within the Duke West Campus tax parcel: a hospital, a stadium, classroom space, residences and a chapel. The six-parcel sample was comprised of:
Duke Regional Hospital (formerly known as Durham Regional Hospital) and County Stadium, which together form a single tax parcel owned by Durham County
Durham School of the Arts
Residences at Erwin Mill (56 residential units in a repurposed warehouse setting)
Berkshire Ninth Street Apartments (303 luxury residential units built in 2012)
North Carolina School of Science and Mathematics
Duke Memorial United Methodist Church
Collectively, the six-parcel sample has a total tax valuation of $341,586,683, nearly identical to the Duke West Campus parcel. However, the properties in the sample contain 2,008,934 square feet of building space compared to the Duke West Campus total of 6,884,305 square feet of reported building space, as determined by documents reviewed from the Duke Financial Services Budgets & Reporting and cross-referenced with Duke Campus Maps and the tax parcel boundaries. (Detailed summaries of the comparison are available at this link.)
The six-parcel sample has an average tax valuation of $170.03 per square foot of building space, which is 3.44 times higher than the Duke West Campus average of $49.48 per square foot. Of course, not every square foot of building space is identical for tax purposes, but the sample parcels were specifically chosen to provide a variety of age, building materials, parcel densities and use types to provide as accurate and reasonable as possible comparison.
The sample parcels contain 388 beds at Duke Regional Hospital, which is owned by the County but since 1998 has been operated in partnership with Duke University. By comparison, the Duke University Hospital within the West Campus parcel reports having 1,062 beds (2.74 times more) in addition to much more specialized equipment and research facilities within the rest of the Duke Medical Center.
The sample parcels contain 359 residential rental units and additional boarding for 680 students at the School of Science and Mathematics while Duke West Campus reports housing over 3,200 undergraduates in the on-campus quads.
Durham County Memorial Stadium seats 8,500 spectators, which is dwarfed by the 40,004-seat Wade Wallace Stadium on West Campus.
While it is understandable that the Durham County tax appraisal program does not expend its limited resources to provide an accurate valuation of the Duke West Campus parcel which still ultimately has a $0 tax bill, there is most likely an extreme undervaluation of the Duke West Campus parcel, which then strongly understates the amount that Duke “would be paying” in local property tax if they were not exempt.
In fact, this underassessment of tax valuation is not unique to Duke’s parcels. DataWorks NC published research work by Hudson Vaughan that showed commercial properties across Durham are systematically undervalued, resulting in over $35 million per year in lost tax revenue.
Although Duke’s presence in Durham has, like all large-scale activities and industries, brought some measurable economic benefits, it has also come at a cost to the community in forgone tax revenue and ultimately higher tax bills for its residents. The County will be reassessing property values in the coming year–it appears amid the backdrop of new community-based energy behind the concept that its wealthiest landholder should pitch in.
Whenever Duke faces scrutiny, we always hear someone say that without Duke there would be no Durham.
This is backwards.
Without the generosity of Durham citizens there’d be no Duke University today.
It was a Durham citizen who saved Trinity College from bankruptcy more than 100 years ago. (Julian Carr was also a white supremacist who helped fund the white mob in Wilmington in 1898.)
It was Durham citizens who banded together and donated free land and money to move the struggling rural college to West Durham.
A Durham citizen donated the land under East Campus as a gift. Durham citizens pooled money and donated Southgate dorm as a gift.
It was a Durhamite, born and raised in Durham, who donated $40 million to add the brick buildings to the East Campus quad and then buy the land and build the gothic West Campus.
And it was a Durhamite who established the Duke Endowment, filling the university’s coffers for a century.
The Duke administration needs an attitude change because without Durham, there’d be no Duke.
-John Schelp
Old West Durham