Taveras backs freeze in commercial property tax

INTELLECTUAL PROPERTY: Providence Mayor Angel Taveras’ fiscal 2014 budget proposes freezing the commercial property tax rate in the city for seven years. / PBN FILE PHOTO/FRANK MULLIN
INTELLECTUAL PROPERTY: Providence Mayor Angel Taveras’ fiscal 2014 budget proposes freezing the commercial property tax rate in the city for seven years. / PBN FILE PHOTO/FRANK MULLIN

In his first year in office, Providence Mayor Angel Taveras just wanted to survive the “category 5 fiscal hurricane” brought about by the recession and years of city policy decisions.
Year two was dominated by municipal pensions.
Now three years after taking office and weighing a run for governor, Taveras has a plan to jump-start economic growth in the city and bring development to numerous tracts of underutilized land.
The plan, released as a prelude to his fiscal 2014 budget proposal this month, would freeze the city’s sky-high commercial property tax rates for seven years and introduce incentives aimed at replacing parking lots with buildings.
“We have to do more to accelerate the pace of economic growth,” Taveras told business leaders at the Providence Foundation gathering where his plan was released March 27. “The goal that I have is to improve our business climate, improve our infrastructure and invest in human capital in our city.”
Perhaps predictably, Taveras’ attention on growth and development has found strong support in the business community.
William F. Hatfield, Rhode Island president for Bank of America, called Taveras’ economic-development priorities “phenomenal” and a “great plan” that will “really create a very strong and sustainable future” for the city.
Greater Providence Chamber of Commerce President Laurie White, who served on Taveras’ transition committee, said she was happy now to see the return of many ideas suggested in that process but set aside because of budget crises.
“The freeze in tax rates is very important when Providence is compared to other cities,” said White, who particularly liked Taveras’ call for a combination of “innovation and grit” to propel the economy.
In addition to seeking the commercial property tax freeze, which will need the support of the City Council, Taveras’ plan includes four other “immediate action” priorities based on objectives developers and urban-growth advocates have been working on for years. They include making progress on the long-planned transformation of Kennedy Plaza from a vast highway and bus-parking area into a vital public square.
And they include speeding the notoriously slow city permitting process for building projects.
A statewide priority that Providence Economic Development Director James Bennett has been wrestling with for the past two years, speeding permitting should take a step forward this summer with the launch of an entirely online application system.
Taveras also promised to add money in his budget for new hires to speed up application processing, especially for projects worth less than $100,000.
To encourage development on the acres of prime downtown land now used as surface parking lots, Taveras wants an ordinance forgiving, for three years, the additional property taxes incurred by putting buildings on empty lots. After those three years the additional assessed value would then phase in to the full tax bill over the next nine years.
The low taxes landowners pay on empty lots is a reason so many tear down old buildings, an incentive many urban planners would like to see eliminated by taxing land at a higher rate than the structures on it.
Instead, Taveras seeks incentives for building once lots have already been cleared, including fast-tracked demolition permits for projects that promise to finish a replacement structure within 18 months.
Asked what the city will do if an owner fast-tracks demolition, but doesn’t build, Taveras said officials would put unspecified “protections” in place to prevent it.
In the same quest to spur growth, Taveras wants an aggressive push to redevelop certain prime properties that have languished in deteriorating neglect for years.
In particular, his plan mentions two vacant buildings on the Providence Preservation Society’s “Most Endangered List,” the former South Street Power Station off of Eddy Street (once called the Dynamo House) and the George C. Arnold Building at the corner of Washington and Mathewson Streets downtown. More controversially, the plan suggests seizing such properties through eminent domain as a potential option for places where private ownership has made little progress.
Asked whether his office has taken any steps toward an eminent-domain taking of the South Street Station or Arnold Building, Taveras said no.
Without discussing any particular property, Providence Foundation Executive Director Daniel Baudouin said Taveras, in general, is wise to keep eminent domain on the table as an option “if an owner refuses to develop and it drags down the neighborhood.”
“Eminent domain hasn’t been used in a while, but it is a tool,” Baudouin said.
Along with the five “immediate-action” priorities, Taveras’ plan includes 15 more “additional action steps for economic growth,” which include:
• A Providence Economic Development Partnership program to reimburse shop owners for storefront improvements.
• Unnamed reforms to the city zoning code to promote transit-oriented development.
• Back-office support, for a small fee, from city staffers to small businesses.
• A regional marketing campaign of Providence development opportunities, including the former Interstate 195 land.
• Support for the creation of a new nursing school in the city (the institutions that would run it were not named.)
• Pursue a “sustainable funding strategy” to develop a streetcar system.
So far it’s not clear how many of the items outlined in the new plan will be reflected in Taveras’ budget for next year or how much support they have on the City Council.
One potential area for conflict created by the proposed commercial-tax-rate freeze is the possibility that it will be accompanied by an increase in residential rates.
Last year Taveras and the council kept rates for homeowners flat, but the mayor has not promised the same this year.
“We will do everything we can to try to hold the line on taxes and as we finish the budget we will make clear where we are on that,” Taveras said. •

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