JWU Steps Up: Will Other Tax-Exempts Follow Suit?
Thursday, February 16, 2012
Johnson & Wales University will triple its voluntary payments to Providence over the next decade, becoming the city’s first tax-exempt institution to answer Mayor Angel Taveras’ call for the nonprofits to help the city avert bankruptcy.
At a press conference Wednesday, Taveras and Johnson & Wales University Chancellor John Bowen announced that the school with payment in lieu of taxes of $6.4 million, with the potential for an additional $5 million, for a total of $11.4 million in additional payments over 10 years. The city will receive at least $958,000 in annual contributions from the school.
Taveras said he was feeling better about the possibility of the city obtaining the requested $7.1 million in additional annual voluntary payments from the city’s seven largest tax-exempts, but he did not elaborate on any discussions his administration is having with the other institutions.
“I am pleased to announce this new agreement with Johnson & Wales, and am grateful to the university for being a strong partner to the City of Providence,” said Mayor Taveras. “Johnson & Wales and all of our city’s major tax-exempt institutions provide great economic and cultural value to Providence. At the same time, our tax-exempts cannot thrive if our city is in continual fiscal crisis. This agreement helps to address an unsustainable structural imbalance in our city’s finances caused by the great and growing percentage of tax-exempt land in Providence.”
Meetings this Week
The Taveras administration said earlier this week that it was planning to meet with the heads of all of the hospitals this week to talk about the possibility of increasing their payments to the city. On Wednesday, he also met with Brown University President Ruth Simmons.
The Mayor was far more upbeat during the new conference than he was Monday night, when he delivered a grim State of the City address that singled out the tax-exempts and city retirees for not sacrificing to help the city stay afloat. Taveras has conceded that a supplemental tax increase or bankruptcy are options for the city if it can’t close a $22.5 million deficit and solve its structural problems.
“Collectively, our large hospitals, colleges and universities own nearly $3 billion of property across Providence — land that would be worth $105 million in tax revenue per year,” the Mayor said Monday night. “We will always support the investment in jobs and economic development that their continued growth brings to the state. However, we must also recognize that the system as it currently operates means their expansion lays an increasingly heavy burden on those of us who do pay taxes in Providence. It’s a system that’s unfair and simply unsustainable.”
Bowen “Bullish” About Providence
It does not appear an agreement with any of the other nonprofits is on the horizon and Taveras said he would rather not negotiate in public.
As for the agreement with JWU, the Mayor said it represents a significant commitment to Providence from JWU at a time when Providence faces an uncertain future. The university has campuses in Miami, FL., Denver, CO. and Charlotte, N.C., and could have made the decision to make further investments elsewhere.
Bowen said he was “bullish” about the capital city and is committed to helping in its darkest hour.
“I am pleased to announce this new agreement under which Johnson & Wales University will increase the support we provide to the City of Providence,” he said. “Johnson & Wales is committed to a strong and vibrant future in Providence, and we recognize that we cannot be successful in a failing city.”
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