Cities, developers eye smoother TSA review

IN PROGRESS: Don Pelletier, left, and Nick Terrnova work on getting materials to the roof of the former Narragansett Electric power plant station at the South Street Landing construction site. Providence in recent months has reviewed a series of tax-stabilization agreements, including a technical adjustment for agreements concerning the redevelopment of the power plant. / PBN PHOTO/MICHAEL SALERNO
IN PROGRESS: Don Pelletier, left, and Nick Terrnova work on getting materials to the roof of the former Narragansett Electric power plant station at the South Street Landing construction site. Providence in recent months has reviewed a series of tax-stabilization agreements, including a technical adjustment for agreements concerning the redevelopment of the power plant. / PBN PHOTO/MICHAEL SALERNO

Are financial incentives a prerequisite for economic development? In most urban areas of Rhode Island, the answer appears to be a qualified yes.

Developers interested in investing have traditionally sought property tax relief, with the full tax burden on improvements phased in over a set number of years. But some have recently started requesting additional incentives, including discounts on taxes for purchases of equipment.

With property tax breaks available in several Rhode Island locations, two cities have made efforts this year to create an easier review process, promising a standardized deal for any development that meets the criteria.

Both Pawtucket and Providence have approved standardized plans for builders who construct new projects or redevelop existing buildings. Both promise an administrative review for projects that meet certain criteria, with the length of the tax phase-in dependent on the size of the project.

- Advertisement -

For Providence, the standardized tax breaks are available in the Capital Center and I-195 Redevelopment districts. Tax breaks for development in other areas require City Council approval.

In Pawtucket, the state’s fourth-largest city, the standardized tax stabilization is available citywide for any project of at least $250,000. Larger deals, of $5 million or more, require City Council review.

Tax-stabilization agreements that are efficient and predictable are essential for attracting business development, said Pawtucket Mayor Donald R. Grebien.

“The question is, is it enough?” he said.

To that end, he said, the city has tried to be as efficient as possible in reviewing applications, approving permits and answering questions that developers may have, Grebien said.

Warwick, the state’s second-largest city, has traditionally eschewed property tax stabilization agreements, although it has used state-approved enterprise zones in selected areas, according to Mayor Scott Avedisian.

And it is now positioned to take advantage of new state incentives.

The City Centre Warwick district, near T.F. Green Airport, is among the areas of the city that could benefit from new state incentives aimed at economic development. The Rebuild Rhode Island Tax Credit, for example, will provide a state tax credit of up to 30 percent of a project cost for development near public transit hubs or freight-transit-development areas.

Tax-stabilization agreements, the go-to incentive in Providence and Pawtucket, have traditionally not been made available in Warwick, in part because of concern that it would be unfair to established businesses, Avedisian said.

“There are many businesses who have been here a very long time, who have paid their taxes through thick and thin,” Avedisian said.

The new state incentives focused on transit-oriented developments have caught the eye of a developer who is considering a “major project” in Warwick, the mayor said. In this area, incentives make sense, he said.

Providence in recent months has reviewed a series of tax-stabilization agreements, including a technical adjustment for agreements concerning the long-sought redevelopment of the former electric power plant, South Street Landing.

The project, now under construction, will include three major components: the renovation of the power-plant building into administrative space for Brown University and a home for the combined Rhode Island Nursing Education Center, an effort of University of Rhode Island and Rhode Island College.

The City Council also recently started to review TSAs for renovation of The Providence Journal building, a deal to allow construction of an extended-stay hotel to replace the empty Fogarty Building, and a TSA for improvements at the Port of Providence intended to accommodate a new, $22 million cement-distribution facility. •

No posts to display