Millions Requested in New Tax Breaks in Providence
Wednesday, May 28, 2014
Kate Nagle, GoLocal Contributor
View Larger +
South Street Power Station, one of the current TSA proposals pending before the City Council.
Developers and property owners are asking the City of Providence for millions in tax breaks, at a time when tax stabilization agreements are coming under increased scrutiny.
The Providence City Council is currently considering tax breaks for seven property developments -- and will soon be looking at proposals for extensions on at least three existing TSAs -- which would amount to millions of foregone tax revenue to enable the economic development projects to move forward.
"Each one is unique, but at the end of the day, the dollars are the same," said Providence City Councilman Luis Aponte of the current proposals before the City Council for 3 TSAs tied to the South Street Power Plant redevelopment, as well as Capitol Cove, Charter Care, the Foundry, and the Kinsley building. "If you take a look at the ten year [agreements], there's a couple of assumptions, which are not quite science, about tax rate increases. 1% a year over 20 years, that becomes a substantial amount. It would be in the millions."
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLAST
"Here's the rub," said Aponte. "There was a warning put out by the City last year under (former Chief of Staff Michael) D'Amico, who called out Cornish [Associates] and developers for their generous tax stabilizations. There was also a linkage of high commercial tax rates due to TSAs."
"Here we are six months later with slew of new TSAs. The question for me, is why we're still doing these as one-offs, as opposed as moving in the direction of a comprehensive strategy," said Aponte. "I've heard that the Procaccianti Group is looking for one for their new hotel proposal, and we expect to be hearing from Cornish [Associates] about their requests for extensions on three of their current TSAs on June 5. TSAs are a great tool to try and enhance economic development. They should try and be part of the tool box, but not the only tool. There's an over-reliance on them."
Providence Mayor Angel Taveras' Deputy Press Secretary Meaghan McCabe told GoLocal the Administration was looking at the merits of each proposal.
"Proposed tax stabilization agreements are considered independently of each other on a case-by-case basis. The Administration will continue to work closely with the City Council to consider all such requests on their merits," said McCabe.
Looking at TSAs
Earlier this year, City Auditor Matt Clarkin issued a review of tax stabilization agreements at the request of the City Council, reporting that the 36 current TSAs in Providence had a total assessed valuation of $429.4 million at end of 2012, and paid $5.2 million in taxes in 2013. Real estate investor and broker Ric Santurri with First Realty noted at the time. "Providence taxpayers pay 3% higher taxes because of the existing TSAs ($10 million in lost tax revenue yearly from existing TSAs on a $330 million tax levy)."
See Existing TSA Properties BELOW
Clarkin said that the economic impact of the latest round of TSA proposals would be done "in committee," meaning in the City Council's Ways and Means Committee where the ordinances are pending. Clarkin said he was "not sure of the status of any requests for extensions."
John Jacobson, a Providence based real estate professional who has been a vocal critic of the TSA process and has testified before the City Council on the subject, said that the city should be "asking the following questions before going forward."
"Are of all the 2001 and 2002 TSAs in compliance with their agreements? How and why were the TSAs given a five year extension by the State in 2010? Are the 2001 and 2002 TSAs planning on paying their taxes? If so, how much? Has the city gone in and done a proper assessment? Are there entities seeking new TSAs that have past violations, got extensions or are seeking extensions for other TSAs? If so, should we be considering them?" asked Jacobson.
Jacobson continued, "Do we have a policy in place? Does it figure into an over all economic development policy & city planning? How much is too much to give away? What are other cities and states doing? If the past TSAs needed 5 year extensions and are seeking more extensions are severely financially threatened by the taxes kicking in in 2016, what does that say about the success of the program? Is it sustainable?"
"Projects approach the Council's Ways & Means Committee on a one off basis for approval. This is very time consuming and politicizes what should be largely dealt with good policy. It creates different market conditions for individual projects which is unfair to tax payers and creates static in the market place," said Jacobson.
"We had the resources of the entire State to vet 38 Studios deal and we got that wrong. It doesn't make sense to entrust a small group of Council members to vet all these projects one by one. Under the current system the economic impacts are an educated guess at best. Furthermore, with Mayor Taveras challenging the compliance of many of the 2011 TSAs and those agreements ending up in court, as a developer I wouldn't want to sign a TSA until the dysfunction in the system was addressed. At present there is a lack of leadership on this issue, at a time when we simple can not afford it."
Moving Forward?
View Larger +
Will 111 Westminster be looking for a TSA from the city?
"We need to think critically about what we're subsidizing, and how does that jive with what we want our city to look like," said Aponte.
Among the supporters of the use of TSAs for economic development include former Providence Mayor Joseph Paolino.
"It's an important tool as there's not much the city can offer," said Paolino. "They're important for job growth." Paolino, who recently acquired 100 Westminster and 30 Kennedy Plaza, said he didn't approach the city for a TSA -- but wouldn't rule it out. "I don't think it was merited...I don't need a TSA. If I do major rehab, I might consider it."
Aponte noted that of the current TSA proposals pending, there was one notable absence -- for now. "The one we haven't talked about is 111 Westminster. The fear that I have is that we get tied up with all these current ones, and the developers of 111 come by and say what about us. That building is the Titanic...my fear is that we're setting ourselves up."
"There is the potential that some of these things, these could be be flipped to a non-tax paying entity, so not only did we lose city taxes then at the end, the city had a stabilized payment, got less than what it was due, then if that property goes off the tax rolls, we've subsidized nonprofit development."
Related Slideshow: Current Tax Stabilization Agreements in Providence
View Larger +
Prev
Next
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
View Larger +
Prev
Next
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
View Larger +
Prev
Next
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
View Larger +
Prev
Next
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
View Larger +
Prev
Next
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
View Larger +
Prev
Next
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
View Larger +
Prev
Next
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
View Larger +
Prev
Next
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
View Larger +
Prev
Next
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
View Larger +
Prev
Next
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
View Larger +
Prev
Next
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
View Larger +
Prev
Next
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
View Larger +
Prev
Next
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
View Larger +
Prev
Next
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
View Larger +
Prev
Next
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
View Larger +
Prev
Next
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
View Larger +
Prev
Next
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
View Larger +
Prev
Next
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
View Larger +
Prev
Next
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
View Larger +
Prev
Next
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
View Larger +
Prev
Next
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
View Larger +
Prev
Next
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
View Larger +
Prev
Next
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
View Larger +
Prev
Next
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
View Larger +
Prev
Next
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
View Larger +
Prev
Next
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
View Larger +
Prev
Next
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
View Larger +
Prev
Next
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
View Larger +
Prev
Next
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
View Larger +
Prev
Next
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
View Larger +
Prev
Next
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
View Larger +
Prev
Next
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
View Larger +
Prev
Next
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
View Larger +
Prev
Next
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
View Larger +
Prev
Next
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
View Larger +
Prev
Next
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
Related Articles
Enjoy this post? Share it with others.
