WITH AN AGREEMENT with Johnson & Wales University to increase its payment in lieu of taxes to the city, Providence Mayor Angel Taveras is closer to solving the city's fiscal 2012 budget deficit.
PBN FILE PHOTO/FRANK MULLIN
By Patrick Anderson PBN Staff Writer
PROVIDENCE – Johnson & Wales University has agreed to triple its annual contributions to the city in a new 10-year payment-in-lieu-of-taxes agreement announced Wednesday that allows the school to purchase two former Interstate 195 properties.
The deal will boost Johnson & Wales’ annual payment to Providence from the $308,890 it is paying this year under a 2003 agreement with the city, to at least $958,000 each year.
In addition, Johnson & Wales receives an option to buy a third, undetermined parcel of I-195 land, which would require an addition payment of $5 million (over a decade), which would bring annual payments to the city to $1.45 million. The university also takes ownership of two city streets within its Harborside Campus as part of the deal.
Over 10 years, the agreement will see Johnson & Wales pay at least $6.4 million more than it would pay under the current agreement. That amount would increase to $11.4 million if the university buys the third I-195 parcel.
The agreement is the first between the city and its four private colleges and universities since Mayor Angel Taveras asked the city’s seven major tax-exempt institutions to increase their contributions by a combined $7.1 million per year to close a mid-year budget deficit that could send Providence into bankruptcy.
“Johnson & Wales and all of our city’s major tax-exempt institutions provide great economic and cultural value to Providence,” Taveras said in a news release. “At the same time, our tax-exempts cannot thrive if our city is in continual fiscal crisis. This agreement helps to address an unsustainable structural imbalance in our city’s finances caused by the great and growing percentage of tax-exempt land in Providence.”
The deal with Johnson & Wales will likely increase the pressure on Brown University, the city’s largest nonprofit landowner, to increase its contributions.
Earlier this year, a tentative deal between Brown and the city that would have seen the school increase its payments - now at $1.2 million annually – by $4 million, fell apart.
The two former I-195 properties Johnson & Wales is buying as part of the deal abut Friendship and Pine Streets, Johnson & Wales spokeswoman Lisa Pelosi said, and are needed as the school continues to expand.
“This goes beyond a land deal. It is Johnson & Wales coming to support the city,” Pelosi said.