City to grant 10-year TSA for retail-residential redevelopment

PROVIDENCE CITY COUNCIL is set to consider a 10-year tax stabilization agreement with developers who want to create a ground-floor retail space and 10 upper-floor apartments for this 19th-century office building at 32 Custom St. downtown. If passed, it will be the first TSA under the Mayor Jorge O. Elorza administration. / PBN PHOTO/MARY MACDONALD
PROVIDENCE CITY COUNCIL is set to consider a 10-year tax stabilization agreement with developers who want to create a ground-floor retail space and 10 upper-floor apartments for this 19th-century office building at 32 Custom St. downtown. If passed, it will be the first TSA under the Mayor Jorge O. Elorza administration. / PBN PHOTO/MARY MACDONALD

PROVIDENCE — A project that will convert a vacant office building downtown into rental apartments will come with assistance from a city tax stabilization agreement that defers full taxes for 10 years, under a plan approved Thursday by City Council’s finance committee.
The structure, at 32 Custom House St., was built in 1875. It is now owned by New York-based HM Ventures Group 7 LLC, which includes three of the four partners who renovated the Dean Hotel.
The full City Council is expected to consider the proposal next week. If approved, it would be the first tax stabilization agreement to come through the city under the administration of Mayor Jorge O. Elorza.
The new owners plan to invest $1.4 million in improvements through the renovation, which will create a ground-level retail space for a restaurant, and 10 apartments on the upper floors, according to attorney Nicholas Hemond of Darrow Everett LLP, who represents the owners.
The building has been vacant for five years, and now generates a tax bill of $29,984. Under the proposed TSA, that tax level would be continued for the next two years, while renovations are taking place, and the taxes on the improvements would gradually kick in over the next eight years.
At full value, the project is expected to generate $103,231 in city property taxes, according to an estimated schedule.
HM Ventures Group 7 LLC purchased the building in November 2014 for $800,000, according to the city assessor’s office.

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