Providence’s $6.7 Million Bailout of WaterFire is a Dangerous Precedent - McMahon
Bob McMahon, Columnist
Providence’s $6.7 Million Bailout of WaterFire is a Dangerous Precedent - McMahon
Without question, WaterFire is a unique Providence experience that draws hundreds of thousands of visitors to the Downtown every year. Downtown restaurants, hotels, and parking lots particularly benefit significantly from these visitors, raking in millions of dollars a year from WaterFire nights.
While WaterFire is a community artistic success and provides financial benefits to Downtown businesses and the state, it is in financial trouble. In fact, the WaterFire organization’s finances are underwater. The WaterFire organization is reportedly over $2 million in debt. This debt represents the remaining mortgage on the WaterFire Arts building and operational overspending in 2023 and 2024.
WaterFire has now come to the Providence Mayor’s Office to bail out its finances. Mayor Brett Smiley has asked the City Council to approve a city purchase of the WaterFire Arts building at 475 Valley Street for $3.5 million. The $3.5 million is intended to enable WaterFire to modify its debt.
This $3.5 million would come from a city bond to be floated by the Providence Public Building Authority later this calendar year. By the time the bond is paid off in 2046, the total cost to Providence taxpayers, with interest and other fees, according to the City’s financial advisor Hillside Securities, will be $6.7 million.
We all love WaterFire, but spending $6.7 million of Providence taxpayer funds is not commensurate with WaterFire’s debt.
The proposed bond issue is not sensible municipal finance. Here are the reasons it is a mistake.
The city's purchase of the WaterFire Arts building as a fiscal solution sets a dangerous precedent if other nonprofits in the city in the future run into fiscal problems. The city has certainly helped other Providence nonprofits, such as Trinity Theatre and PPAC, through difficult financial situations. But the solutions didn’t involve buying their buildings and using costly bond issues.
Time is of the essence. The proposal is now before the city council. The city is planning on pulling the trigger soon on a bond issue package that will allow the city to purchase an office building on 444 Westminster Street, as well as purchase the WaterFire Arts building.
GoLocal unveiled the purchase of 444 Westminster - a building owned by top Democratic Joe Paolino.
Taxpayers should contact their city councilors and the Mayor’s Office immediately to have them delete the WaterFire Arts building purchase from the proposed bond issue.