Solomon proposes citywide
15-year tax stabilization plan

City Council President Michael Solomon Thursday proposed a new system for awarding property tax treaties for major land developments that does not include mayoral or council approval. More

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ECONOMIC DEVELOPMENT

Solomon proposes citywide
15-year tax stabilization plan

CITY COUNCIL PRESIDENT Michael Solomon has proposed a 15-year tax stabilization plan for Providence that would include projects on the former I-195 land known as The Link.
Posted 6/19/14

PROVIDENCE – City Council President Michael Solomon on Thursday proposed a new system for awarding property tax treaties for major land developments that does not include mayoral or council approval.

In a news release, Solomon, who is running for mayor, said the new Tax Stabilization Agreement plan, which would include projects on the former I-195 land, would provide developers tax predictability and consistency not available currently.

He said he would submit the proposal, establishing 15-year, administratively-awarded tax stabilization agreements for qualifying projects, at the next city council meeting.

“I want to send a loud and clear message to the development community that Providence is open for business,” Solomon said in the news release. “If we don’t bring certainty to this process we are losing a once in a lifetime opportunity to grow our tax base, grow our population and create much needed jobs. I plan to reach out to the developers who have expressed frustration with the process to assure them my plan will remove the politics and uncertainty that has plagued this city for far too long.”

The new system would be based on recommendations issued earlier this year by an economic development task force formed by the city council partly in response to the continued vacancy of the Industrial Trust building.

The task force recommended tax stabilization agreements lasting 15-years instead of the 12-year structure now favored by Mayor Angel Taveras, who is running for governor of Rhode Island.

Offsetting the greater proposed length of the deals, the task force recommended requiring owners to pay “base tax,” or what they are paying before work begins, for the first five years instead of the current model collecting no tax for the first three years.

Asked if the new proposal would be identical to the task force recommendations, Solomon spokesman Bill Fischer said it would be put forward in an independent piece of legislation that will “mirror” the recommendations.

In the past year, developers, Taveras and councilors have sparred over tax stabilization agreements, which for many years have been granted ad-hoc with unique terms for each project and no predictable structure.

The current rules require council approval for all deals, but in 2011, an ordinance was passed allowing expedited administrative approval of 10 new stabilizations. Some councilors have called that a mistake and insisted on keeping control of the process.

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