City trades streets for budget fix

Taveras
Taveras

At the start of 2012, Providence’s colleges and universities were at loggerheads with Mayor Angel Taveras over his demand for a $7 million per-year increase in their combined payments to the city.
City-university relations hit a low point last January after a tentative agreement between Brown University and the city fell through and sparked a series of combative exchanges between Taveras and then-Brown President Ruth Simmons. But before the year was out, all seven major nonprofits, including Brown, had had agreed with the city on a combined $6.25 million in new annual payments in lieu of taxes.
What changed?
Threats the state would strip the nonprofits of their property-tax exemption may have given the city some leverage, but also important was the decision to offer the schools something they really wanted in exchange for their money: public streets.
In a February agreement that became the model for subsequent deals with the four other schools, Johnson & Wales University agreed to add $670,000 to its annual payment in exchange for control of three streets serving its Harborside campus (and the land downtown where one “paper” street exists on city plans).
Four months later, Brown received ownership of four blocks of streets that cross through its campus in College Hill in exchange for an additional $3.9 million annually, plus exclusive rights to 250 on-street parking spaces.
The deal differed from the earlier Brown agreement that fell through by centering on streets and parking instead of sales of former Interstate 195 land.
While Johnson & Wales’ deal also included I-195 land considerations, they were setting a price for parcels already reserved for the university in state law.
Last month, Providence College received sections of three streets either adjacent to or crossing its Elmhurst campus in exchange for an average annual payment increase of $384,000.
Steven Maurano, assistant vice president for public affairs at Providence College, said acquiring the streets in the deal with the city had not been a priority for the college until the other schools started getting streets. “The city sort of set the precedent earlier this year for doing transaction-oriented agreements and we saw what came before us with Johnson & Wales, Brown and RISD,” Maurano said. “Once we realized the city was interested in proposals with mutual benefit, it made it different than the city coming in and asking you to write a check.”
The only college that didn’t get any streets in exchange for a higher PILOT payment was Rhode Island School of Design, which settled for 70 parking spaces in exchange for a $250,000 annual payment increase.
But was the burst of street sales part of a growing trend or an isolated phenomenon spurred by Providence’s fiscal crisis and the recent physical expansion of higher education institutions?
At least one major Providence landowner, Joseph Paolino, managing partner of Paolino Properties, sees significant potential for street privatization, especially in some of the small, lightly traveled downtown side streets and alleys.
As Providence mayor back in the 1980s, Paolino helped pioneer the practice of getting payments for city streets with the sale of roadways crossing through the Regency Plaza apartment complex.
The Regency proposal spurred Paolino to push for a change in state law allowing payment for municipal street abandonments.
“There wasn’t a lot of thought about [getting money] for abandonments back then,” Paolino said. “When a request for an abandonment came before me, I said ‘this is real estate. I don’t want to give it away for nothing.’”
Since that time, street transfers have been relatively rare. In many cases, property owners prefer to have their local government own the streets around them and cover the costs of maintenance and snow plowing. Paolino said the recent street purchases by colleges and universities has raised his interest in putting in a bid to acquire the spot of Middle Street between Dorrance Street and Eddy Street, possibly in a group with other abutters.
“If you look at it, it’s a filthy, dirty, publicly owned street,” Paolino said. “I am very impressed with what [Cornish Associates President] Buff Chase has done to Fulton Street. I have been talking to architects about a plan and would talk to abutting owners to see if they would join with me to make it complement the buildings, throw out the dumpsters, put in gas lamps and make it an attractive place.”
Whether the city is open to such deals or sees expanding the sale of streets to commercial enterprises as a tool to close Providence’s persistent budget shortfalls are less clear.
At City Hall, Taveras spokesman David Ortiz said the city’s approach to street abandonments has not changed in the last year and the deals with the four schools happened to fit within a larger, long-running dialogue about ways the city and tax exempts could help each other.
As far as the value of the streets, Ortiz noted that PILOT payments of all the schools involved in deals this year far exceed the appraised value of the streets they acquired.
Not everyone thinks selling public streets is a good idea.
Northeast Collaborative Architects Principal J. Michael Abbott, whose recent work has included the design of PPAC Square in downtown Providence, offered the urban-renewal closure of Westminster Street at Cathedral Square as a cautionary tale of what can happen when a city gives up a public street.
“The west side has been cut off and people have been trying to get that part of Westminster Street back for decades,” Abbott said. [Selling streets] is not always a good thing if you cut off access for the future. … Some of the streets within the campuses are minor streets and probably not a big deal, but you have to be careful.” •

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