City Council panel backs 15-year tax deal for proposed Paolino hotel

PROVIDENCE, R.I. (WPRI) – Former Providence Mayor Joseph Paolino’s request for a tax break to build a boutique hotel and restaurant downtown cleared the City Council Finance Committee Tuesday, putting the proposal on track for approval from the full council by next month.

The committee quickly voted 3-1 to approve the 15-year tax stabilization agreement at 59 Westminster Street for Paolino’s 30 Kennedy Partners, LLC, with only Councilwoman Carmen Castillo opposing the ordinance.

The full council must approve the ordinance twice before it is forwarded to Mayor Jorge Elorza’s desk.

The proposed 48-room hotel and restaurant would be built on 34,000 square feet of space inside the former Exchange Bank downtown. Paolino has already been approved for $4.25 million in tax increment financing by the R.I. Commerce Corporation and has said he wants to break ground early next year. He is calling it The Hotel Beatrice, named after his late mother.

But the hotel project has come under criticism from several City Council members who say Paolino initially requested the tax break for office space. The ordinance’s original sponsor, Councilman Luis Aponte, has withdrawn his support.

The project is also opposed by Unite Here Local 26, the union that represents hotel workers at three city hotels. Jonah Zinn, an organizer for the union, told the committee the proposal doesn’t “necessarily guarantee good jobs for residents of the city of Providence. Zinn also raised concern about tax stabilization agreements “eroding the tax base” in the city.

Castillo, a member of the hotel workers’ union, said the city needs to do more to ensure the “jobs they are offering are good jobs.”

The fiscal note for the tax break shows the company would pay $2.7 million in property taxes over the life of the deal, approximately $904,000 less than it would pay without a tax break. The annual taxes would be phased in over 15 years, starting at $107,523 for the first three years and gradually increasing to $272,871 by year 15.

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Dan McGowan ( covers politics, education and the city of Providence for Follow him on Facebook and Twitter: @danmcgowan