PROVIDENCE, R.I. (WPRI) – After months of preparation, Providence Mayor Jorge Elorza and City Council President Luis Aponte on Thursday finally rolled out their plan to offer special tax breaks to developers on the vacant I-195 land.
The proposal, introduced to the City Council Thursday night, allows developers of projects valued above $10 million would receive 13-year tax-stabilization agreements from the city, paying only the base land tax for the first three years of the deal and then gradually phasing in property tax payments over the following decade.
Elorza and Aponte also proposed a separate six-year tax-stabilization policy for commercial projects valued between $250,000 and $3 million in abandoned properties in “opportunity neighborhoods,” communities identified as being populated with the highest rate of residents with low-to-moderate incomes.
“This is a purely administrative TSA that takes politics out of the process and offers certainty and consistency to the business community, things they have been loud and clear that they need in order to invest here in Providence,” Elorza said during an afternoon press conference.
- Read: The proposed I-195 tax-stabilization ordinance
- Related: Senate leader pushes 20-year tax breaks on I-195 land
- Also: Raimondo wants to help cities pay for tax breaks
- More: Council President Aponte views tax deals as big priority
The latest plan to offer tax-stabilization deals on the I-195 land came on the same day the Senate Finance Committee heard testimony of legislation introduced by Majority Leader Dominick Ruggerio that would establish 20-year tax breaks for any developer on the former highway land. The bill was held for further study.
Elorza and Aponte said they hope their bill would prevent the Senate from moving forward with its legislation, but Ruggerio has not indicated whether he plans to pull his proposal. There is no House sponsor of the bill.
The I-195 tax-stabilization ordinance proposed by Elorza and Aponte would also allow for the possibility of a seven-year extension – for a total of 20 years – for projects that would create at least 150 permanent jobs. The terms for the additional seven years would be negotiated by the mayor and the City Council.
The ordinance also calls for developers to “make a good faith effort” to hire minority workers for construction jobs and would require all developers to hire trade construction subcontractors who are affiliated with an apprentice program in the state.
Separately, City Councilman David Salvatore has proposed a 15-year tax-stabilization policy for projects on the I-195 land, but that proposal is unlikely to move forward now that Elorza and Aponte have introduced their ordinance. In a statement, Salvatore said he was disappointed other members of the council and the General Assembly weren’t consulted for the plan.
“Having members of the City Council learn of this plan through a press conference represents a ‘go it alone’ approach of political alliances that is to the detriment of the city of Providence and its residents,” Salvatore said in a statement.
For the tax-stabilization policy that focuses on smaller neighborhood projects, Aponte said would focus on neighborhood revitalization. The proposal would allow developers to pay a base tax for one year, followed by a five-year phase-in until full taxes are owed.
Elorza and the council still haven’t reached an agreement on a tax-break policy for larger projects in other parts of the city. Several council members have said they do not want the mayor to have complete control over the process.
The mayor’s proposed budget for the fiscal year that begins July 1 keeps the commercial tax rate at $36.75 per $1,000 of assessed value for a fourth consecutive year.