Councilman seeks to expand tax agreement for I-195 redevelopment district

PROVIDENCE – An ordinance that would expand the minimum, standardized tax reduction available to developers in the I-195 redevelopment district to all locations within Providence has been introduced by a Providence councilman.
The 2016 Property Tax Predictability Act, introduced by Councilman David Salvatore, would provide two classes of tax stabilization agreements. One would apply to projects of new construction that exceed $10 million, while a second would apply to renovations of commercial and multifamily projects that exceed $5 million, or which exceed 50 percent of the assessed valuation prior to improvements.
Under both classes, property taxes would be frozen for the first three years of development activity, during which the owner would pay a base tax on pre-improvement values. In the fourth year, the increased taxes would begin to kick in, through annual increases of 10 percent.
The full taxation on the improved properties would come in the 13th year.
Introduced by Salvatore on March 17, the ordinance has been referred to the councils’ Committee on Finance. In an interview, Salvatore said he was inspired to expand the uniform TSA by the experiences of developers, some of whom have waited several years for approval for tax incentive approval.
The Procaccianti Group, which in December secured a tax incentive package for its redevelopment of the Fogarty Building downtown, originally requested the TSA two years ago, Salvatore said.
“Unfortunately, some of the development proposals that have been brought to the city’s attention have been [slowed] for a number of reasons,” he said. The standardized plan, he said, will create predictability for developers and remove some of the obstacles to development in Providence.
In July, the council approved a standardized TSA for the I-195 and Capital Center districts that includes a 20-year tax stabilization agreement for projects that exceed $50 million, as well as a 15-year deal for projects larger than $10 million.
A more modest tax stabilization agreement, with smaller financial thresholds, also is available in low-income city neighborhoods.

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