Providence’s top commercial taxpayers may surprise you

7 	50 Park Row WestADDRESS: 50 Park Row Westowner: Avalon Properties Inc.Valued at: $34,149,800 in 2016This is a high-rise apartment building, built in 1991. Its assessment increased 7 percent. / PBN PHOTO/STEPHANIE EWENS
7 50 Park Row WestADDRESS: 50 Park Row Westowner: Avalon Properties Inc.Valued at: $34,149,800 in 2016This is a high-rise apartment building, built in 1991. Its assessment increased 7 percent. / PBN PHOTO/STEPHANIE EWENS

Providence hotels, top-flight office buildings and luxury apartments are among the most valuable properties in the city, based on the latest reassessment, which indicates a strengthening of commercial sales and income.

Overall, the commercial tax base of the city rose nearly 8 percent since the last revaluation three years ago, according to Vision Government Solutions, a company hired by Providence to conduct the required reassessment.

Based on its research and analysis, the assessed value of Providence commercial and industrial properties rose from $3.06 billion to $3.28 billion in 2016, driven more by increasing rents and occupancies than by comparable sales.

Downtown hotels, in particular, enjoyed robust growth in valuation. The Omni Providence Hotel, now worth $74.3 million – the largest, single commercial taxpayer – increased 11 percent in value.

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Several of the Class A office towers of Providence also helped boost the city’s coffers.

The most valuable among them saw increases ranging from 12-13 percent, according to data provided by the Providence Tax Assessor’s Office.

The most valuable is 100 Westminster St., a 20-story tower that also fronts Kennedy Plaza, owned by Westminster Partners LLC.

The single most-valuable property in the city is the retail behemoth Providence Place mall, now assessed at $698,109,800, $52 million more since the last measurement. But that valuation will not dramatically help the city’s ailing finances.

Like many of the city’s largest commercial properties, the mall is subject to a tax-stabilization agreement, which has substantially cut its payments to the city.

Providence Place mall will pay the city $500,000 in a “reinvestment payment” in 2016, part of a 30-year tax-stabilization agreement authorized when the development was approved in 1994.

Were it subject to the full commercial tax rate in Providence, proposed in Mayor Jorge O. Elorza’s recently released budget plan to be $36.50 for each $1,000 of assessed value, Providence Place would pay $25.5 million in taxes this year instead.

The property will not start generating full taxes until 2025, according to information provided by the city tax assessor’s office.

As part of its TSA, the retail property does not pay the city’s tax on tangible goods, which is $55.80 for each $1,000 owned in inventory, equipment and furnishings.

The city’s most valuable industrial property, the electrical power station owned by Dominion Energy Manchester Street Inc., is another site that has had a substantial break. Its 10-year payment plan, approved through a court decision, is set to expire at the end of this year’s tax cycle, according to the agreement. The property now worth nearly $272 million will pay $5.2 million in city taxes this year, according to the assessor.

Based in Northborough, Mass., Vision Government Solutions has captured contracts for several revaluations in Rhode Island in recent years. This year, it also is conducting revaluations in communities that include Burrillville, East Providence, North Kingstown, South Kingstown and Warwick.

Steve Ferreira, the company’s district manager for Providence, said the capital city’s commercial values were derived based on comparable sales, where available, and income and expenses reported by building owners. The data is compared to other communities, as well as historical trends. The evaluations also take into account ads placed by property owners seeking tenants.

“We are confident these are appropriate values,” he said. “Downtown has always been pretty strong. The hotels bring a lot of people into town. There’s a lot going on in the city, and that’s reflected in the value of the real estate.”

Others are more skeptical.

Former Mayor Joseph R. Paolino Jr. has been critical of the new revaluation, which he thinks overstates the downtown’s emergence from recession-era conditions. He is managing partner of the commercial real estate company Paolino Properties, and the registered agent of the limited liability company that owns 100 Westminster. The value of the latter has increased by 12 percent since 2013. He doesn’t understand why, he said, given the loss of a major tenant and the absence of tenants around him downtown.

“Vacant buildings do not increase the value of your property,” Paolino said.

Gilbane Development Co., which manages the limited-liability company that owns the 257 Thayer apartment building, also disagrees with the new valuation. Although he declined to be interviewed, Gilbane Development CEO and Chairman Robert Gilbane said in a statement: “We’ve contested their assumptions and feel their valuation is incorrect.”

According to the Providence tax assessor, the numbered photos in this article are the Top 10 commercial properties in Providence that are paying a full tax load. •

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