Critics Raise Questions Over New 195 Tax Break Plan for Providence
Wednesday, July 01, 2015
Kate Nagle, GoLocal Contributor
Community leaders -- and real estate professionals -- were among those who raised questions about Providence's stake in the newly brokered plan for a standardized tax stabilization agreement (TSA) for development of the 195 land on Tuesday night.
In a joint statement released just before the City Council Finance Committee meeting, city and state leaders including Governor Gina Raimondo, Providence Mayor Jorge Elorza, City Council President Luis Aponte, and General Assembly leadership lauded the proposal which calls for a two-tiered TSA for projects above $10 million and $50 million respectively, after a proposal at the State Senate to give the state full control of 195 negotiations fell flat at the end of the General Assembly session.
“We all agree that the I-195 land is a once-in-a-generation opportunity for both Providence and Rhode Island, and we need to work together to foster investment and put people back to work. This ordinance provides powerful tools that will encourage development, drive our economy forward, and help get shovels in the ground soon. These TSAs will offer a streamlined and predictable process for developers and will open opportunities for companies across the globe to invest and create jobs in Providence.”
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John Jacobson, a Providence real estate professional who has been an outspoken critic of the city's past handling of TSAs, questioned the benefit to the state's capital city - versus the state itself.
"I think that the majority of the tax benefits will go to the State as they see the income tax and sales tax in the first 5 years. Of course there will be some trickle down," said Jacobson. "The good news is that a $10 million project is significant and the 195 commission still has the ability to vet the projects and shape the development."
"In the end the State should be compensating Providence more in the form of PILOTS. This may be happening," continued Jacobson. "A new law passed that will help offset the TSA by 10%. And there is a 25 million fund to help the 195 projects go."
Nuts and Bolts
Under the agreement announced Tuesday, projects over $10 million would be eligible for a 15-year tax stabilization agreement that with no taxes in the first year, base land tax only in years two through four, a 5% property tax in year five, and then a gradual annual increase for the remainder of the term.
Officials also announced five 20-year TSAs for which projects over $50 million will be eligible on a first come, first served basis, saying that offering this limited number of 20-year agreements for large projects would "provide incentive for early and expeditious development."
"We'll make the 195 land more attractive, put it [where it] will push developers over the decision point and come and invest money and resources in Providence in way that invests in our future," said Elorza before the Finance committee.
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Supporters -- and critics -- of the newly proposed TSA deal for 195 packed the City Council chamber on Tuesday.
TSAs had come under scrutiny last year, as the City Internal Auditor along with the City Council conducted a comprehensive review of the current TSAs in the city -- and opponents to new tax breaks on the 195 land
began voicing their concerns.
At the finance committee meeting, Chris Marsella with Marsella Development Corporation, raised the issue of the new deal applying only to 195 lands for the new tax treatment -- as opposed to the including the whole city.
"We support the tool for the 195 land, [but] there should be a citywide plan," said Marsella before the committee. "Yes 195 is a once in a lifetime plan, but there's been a thirty year testing ground in the city. We've had three million square feet in property [developed] at Capital Center, and three million more to go. Consider including Capital Center, and recognize that Providence is open for business citywide."
Labor Support, Social Groups Call for Benefits
Supporters of the new TSA deal who came out to the packed city hall chamber included union leaders, who praised the potential of the tax breaks to incentivize construction downtown -- and create jobs.
"This ordinance is so important," said Paul MacDonald, a Teamsters official with the Providence Central Federated Council. "We suffer from thirty to forty percent unemployment. Many of our members haven't seen good work in a long time."
The joint release by city and state leaders on Tuesday said that the new agreements "include women and minority business enterprise incentives as well as apprenticeship requirements for construction and use of the City’s First Source requirements to encourage employment for Providence residents."
During the hearing, however, community groups and labor organizations called for enhanced community benefits in any I-195 tax breaks.
Among their requets are that all companies receiving public subsidies in the city of Providence "provide good, living wage jobs, hire local residents from in need areas of the city, and negotiate the construction of community benefits projects with local residents."
"We've been working with the Council President," said Jesse Stricker with Jobs for Justice on Wednesday. "We want living wage of $15, health benefits, and affordable housing."
RI Building and Construction Trades Council, Direct Action for Rights and Equality (DARE), UNITE HERE Local 217, IUPAT Local 195, DC 11, District 1199 SEIU New England, RI Progressive Democrats of America, Teamsters Local 251, Fuerza Laboral / Power of Workers, Environmental Justice League of RI, RI Carpenters Local 94, Restaurant Opportunities Center RI (ROC United), Mount Hope Neighborhood Association, American Friends Service Committee, RI Jobs With Justice, Occupy Providence, Olneyville Neighborhood Association (ONA), Fossil Free RI, Providence Youth Student Movement (PrYSM), Prosperity for RI, and the Brown University Warren Alpert Medical School Prison Health Interest Group signed on to the letter calling for the actions.
Related Slideshow: Current Tax Stabilization Agreements in Providence
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130 Westminster St.
The Arcade - 103 Westminster St. Associates, LLC
Approval Date: 12/31/2012
Assessed Valuation: $1,826,200
Actual Tax Prior to TSA: $44,137
2013 True Tax: $67,113
2013 Stabilized Tax Payment: $16,742
Tax Status: Current
End Date of Agreement: 12/31/2022
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122 Fountain St.
Sportsman Inn - HM Ventures, LLC
Approval Date: 4/20/2012
Assessed Valuation: $1,607,800
Actual Tax Prior to TSA: $77,010
2013 True Tax: $59,087
2013 Stabilized Tax Payment: $9,601
Tax Status: Past Due
End Date of Agreement: 12/31/2022
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244 Oak St. + 33 Magnolia St.
Roger Williams Brewery, LLC
Approval Date: 1/1/2012
Assessed Valuation: $496,800
Actual Tax Prior to TSA: N/A
2013 True Tax: $18,257
2013 Stabilized Tax Payment: $18,140
Tax Status: Past Due
End Date of Agreement: 12/31/2024
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1 AT&T Plaza
Hasbro - Empire LaSalle, LLC
Approval Date: 7/1/2012
Assessed Valuation: $25,092,400
Actual Tax Prior to TSA: $547,553
2013 True Tax: $922,146
2013 Stabilized Tax Payment: $47,568
Tax Status: Current
End Date of Agreement: 12/31/2024
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100 Weybosset St.
Providence G Building - Providence Capital, LLC
Approval Date: 3/20/2012
Assessed Valuation: $2,575,400
Actual Tax Prior to TSA: $129,610
2013 True Tax: $94,609
2013 Stabilized Tax Payment: $32,557
Tax Status: Current
End Date of Agreement: 7/1/2025
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11 Dorrance St.
The Biltmore
Approval Date: 3/15/2012
Assessed Valuation: $20,162,400
Actual Tax Prior to TSA: $694,575
2013 True Tax: $740,698
2013 Stabilized Tax Payment: $124,506
Tax Status: Past Due
End Date of Agreement: 12 Years from Commencement
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1 Park Row West
Johnston & Wales University Dorms - Capitol Cove, LLC
Approval Date: 3/11/2005
Amendment Date: 3/8/2010
Assessed Valuation: $2,252,500
Actual Tax Prior to TSA: $518,247
2013 True Tax: $82,779
2013 Stabilized Tax Payment: $968,606
Tax Status: Current
End Date of Agreement: 12/31/2023
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125 Washington St.
Mercantile Block Assoc., LLC
Approval Date: 11/16/2009
Assessed Valuation: $1,758,000
Actual Tax Prior to TSA: $59,851
2013 True Tax: $64,607
2013 Stabilized Tax Payment: $34,248
Tax Status: Current
End Date of Agreement: 12/31/2020
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1 Sims Ave.
Milhaus LLC - The Steel Yard
Approval Date: 1/8/2007
Assessed Valuation: $323,400
Actual Tax Prior to TSA: N/A
2013 True Tax: $11,885
2013 Stabilized Tax Payment: $19,641
Tax Status: Current
End Date of Agreement: 12/31/2016
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60 Valley St.
60 Valley St. LLC (c/o Armory Revival)
Approval Date: 9/26/2006
Assessed Valuation: $2,797,000
Actual Tax Prior to TSA: $14,333
2013 True Tax: $102,790
2013 Stabilized Tax Payment: $11,730
Tax Status: Current
End Date of Agreement: 12/31/2016
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160 Niantic Ave.
160 Niantic Ave. Morvco Realty LLC
Approval Date: 5/27/2004
Assessed Valuation: $1,305,300
Actual Tax Prior to TSA: $50,612
2013 True Tax: $47,970
2013 Stabilized Tax Payment: $38,550
Tax Status: Current
End Date of Agreement: 12/31/2015
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50 Holden St.
Promenade Building Assoc. - The Foundry
Approval Date: 5/17/2004
Assessed Valuation: $4,238,200
Actual Tax Prior to TSA: $42,802
2013 True Tax: $155,754
2013 Stabilized Tax Payment: $104,814
Tax Status: Current
End Date of Agreement: 12/31/2015
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21 Gordon Ave.
South Providence Development Corp. (Keith Fernandez)
Approval Date: 1/16/2004
Assessed Valuation: $1,042,600
Actual Tax Prior to TSA: $5,708
2013 True Tax: $38,316
2013 Stabilized Tax Payment: $10,984
Tax Status: Past Due
End Date of Agreement: 12/31/2016
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10 Memorial Blvd.
GTECH Corp. Headquarters
Approval Date: 7/15/2003
Assessed Valuation: $54,767,800
Actual Tax Prior to TSA: $236,619
2013 True Tax: $2,012,717
2013 Stabilized Tax Payment: $1,100,000
Tax Status: Current
End Date of Agreement: 12/31/2026
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65 Eddy St.
Peerless Lofts
Approval Date: 11/22/2002
Assessed Valuation: $12,843,700
Actual Tax Prior to TSA: $80,100
2013 True Tax: $472,006
2013 Stabilized Tax Payment: $33,407
Tax Status: Current
End Date of Agreement: 12/31/2016
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235 Promenade St.
Promenade Building Assoc. - The Foundry
Approval Date: 11/22/2002
Assessed Valuation: $15,810,300
Actual Tax Prior to TSA: $58,201
2013 True Tax: $581,029
2013 Stabilized Tax Payment: $30,345
Tax Status: Current
End Date of Agreement: 12/31/2015
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236 Westminster St.
Alice Building LLC c/o Cornish Associates
Approval Date: 12/28/2001
Assessed Valuation: $3,680,500
Actual Tax Prior to TSA: $25,531
2013 True Tax: $135,258
2013 Stabilized Tax Payment: $13,439
Tax Status: Current
End Date of Agreement: 12/31/2014
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100 Providence Place
The 903
Approval Date: 12/21/2001
Assessed Valuation: $68,573,700
Actual Tax Prior to TSA: $200,000
2013 True Tax: $2,520,083
2013 Stabilized Tax Payment: $620,474
Tax Status: Current
End Date of Agreement: 12/31/2015
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95 Chestnut St.
Hacht Development, LLC
Approval Date: 4/15/2012
Assessed Valuation: $3,091,300
Actual Tax Prior to TSA: $110,665
2013 True Tax: $113,605
2013 Stabilized Tax Payment: $20,453
Tax Status: Past Due
End Date of Agreement: 12/31/2022
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265 Oxford St.
Institute for Non-Violence
Approval Date: 1/1/2012
Assessed Valuation: $1,393,700
Actual Tax Prior to TSA: $32,928
2013 True Tax: $51,218
2013 Stabilized Tax Payment: $1,000
Tax Status: Current
End Date of Agreement: 12/31/2021
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145 Globe St.
Victory Square - JAG Investment Realty, LLC
Approval Date: 7/18/2011
Assessed Valuation: $7,234,800
Actual Tax Prior to TSA: $294,485
2013 True Tax: $265,879
2013 Stabilized Tax Payment: $252,750
Tax Status: Current
End Date of Agreement: 12/31/2013
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25 Eagle St.
Butcher Block Mill, LLC
Approval Date: 1/1/2011
Assessed Valuation: $590,500
Actual Tax Prior to TSA: $23,469
2013 True Tax: $21,701
2013 Stabilized Tax Payment: $11,431
Tax Status: Current
End Date of Agreement: 12/31/2023
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50 Agnes St.
50 Agnes, LLC
Approval Date: 1/1/2012
Assessed Valuation: $521,800
Actual Tax Prior to TSA: $21,422
2013 True Tax: $19,176
2013 Stabilized Tax Payment: $16,807
Tax Status: Current
End Date of Agreement: 12/31/2024
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103 Dike St.
Music House, LLC - Fete
Approval Date: 1/1/2012
Assessed Valuation: $589,700
Actual Tax Prior to TSA: $17,555
2013 True Tax: $21,671
2013 Stabilized Tax Payment: $5,417
Tax Status: Current
End Date of Agreement: 12/31/2024
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41 Central St.
Yet Another LLC - Art Recreation Center
Approval Date: 4/16/2007
Assessed Valuation: $287,100
Actual Tax Prior to TSA: $12,879
2013 True Tax: $10,551
2013 Stabilized Tax Payment: $5,862
Tax Status: Past Due
End Date of Agreement: 12/31/2024
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200 Allens Ave.
200 Allens Ave. LLC (Capstone Properties)
Approval Date: 1/8/2007
Assessed Valuation: $1,834,300
Actual Tax Prior to TSA: $74,754
2013 True Tax: $67,411
2013 Stabilized Tax Payment: $23,537
Tax Status: Past Due
End Date of Agreement: 12/31/2016
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35 Hylestead St.
65 Pavillion LLC
Approval Date: 8/1/2005
Assessed Valuation: $675,500
Actual Tax Prior to TSA: $13,345
2013 True Tax: $24,825
2013 Stabilized Tax Payment: $9,752
Tax Status: Current
End Date of Agreement: 12/31/2016
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203 Weybosset St.
Zampalis Realty (Zampalis Realty LLC)
Approval Date: 8/1/2005
Assessed Valuation: $547,900
Actual Tax Prior to TSA: $12,565
2013 True Tax: $20,135
2013 Stabilized Tax Payment: $31,300
Tax Status: Current
End Date of Agreement: 12/31/2024
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166 Valley St.
Rising Mills Project (166 Valley St. LLC, Struever Bros)
Approval Date: 12/1/2003
Assessed Valuation: $16,749,900
Actual Tax Prior to TSA: $91,763
2013 True Tax: $615,559
2013 Stabilized Tax Payment: $80,535
Tax Status: Current
End Date of Agreement: 12/31/2011
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100 Exchange St.
Intercontinental Fund IV F/K/A Cap Hill Prop
Approval Date: 1/16/2004
Assessed Valuation: $107,237,400
Actual Tax Prior to TSA: $1,888,763
2013 True Tax: $2,910,464
2013 Stabilized Tax Payment: $1,086,829
Tax Status: Current
End Date of Agreement: 12/31/2023
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5 Avenue of the Arts
Masonic Temple - RP Providence Owner LLC
Approval Date: 7/15/2003
Assessed Valuation: $45,974,100
Actual Tax Prior to TSA: $79,072
2013 True Tax: $1,689,548
2013 Stabilized Tax Payment: $215,843
Tax Status: Current
End Date of Agreement: 12/31/2025
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532 Kinsley Ave.
Monahasset Mills LLC
Approval Date: 11/22/2002
Assessed Valuation: $10,857,600
Actual Tax Prior to TSA: N/A
2013 True Tax: N/A
2013 Stabilized Tax Payment: $12,836
Tax Status: Credit
End Date of Agreement: 12/31/2017
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210 Westminster St.
Harrisburg Assoc. LLC and Lerner Assoc. LLC
Approval Date: 11/8/2002
Assessed Valuation: $1,188,300
Actual Tax Prior to TSA: $19,404
2013 True Tax: $43,670
2013 Stabilized Tax Payment: $6,349
Tax Status: Current
End Date of Agreement: 12/31/2016
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220 Westminster St.
Harrisburg Assoc. LLC and Lerner Assoc. LLC
Approval Date: 11/8/2002
Assessed Valuation: $2,004,800
Actual Tax Prior to TSA: $10,302
2013 True Tax: $73,676
2013 Stabilized Tax Payment: $10,302
Tax Status: Current
End Date of Agreement: 12/31/2016
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100 Fountain St.
Steelwood (Palmer Building) (LAF Realty LLC Inc.)
Approval Date: 4/25/2002
Assessed Valuation: $503,300
Actual Tax Prior to TSA: $48,935
2013 True Tax: $18,496
2013 Stabilized Tax Payment: $22,970
Tax Status: Past Due
End Date of Agreement: 12/31/2016
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77 Reservoir Ave.
Mashpaug Associates LLC
Approval Date: 11/9/2001
Assessed Valuation: $6,953,300
Actual Tax Prior to TSA: $113,538
2013 True Tax: $255,534
2013 Stabilized Tax Payment: $108,829
Tax Status: Current
End Date of Agreement: 12/31/2015
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