Council rejects TSA extension request on downtown condos

PROVIDENCE – City Council members have pushed back against additional tax incentives for luxury condominiums in the Palmer Block, or Cosmopolitan Building.

A request for a five-year extension on an existing tax stabilization agreement for 100 Fountain St. was rejected by the council’s Finance Committee Tuesday. The recommendation now heads to the full council, which is expected to take up the issue on Feb. 11.

The extension of the tax stabilization agreement originally granted in 2002 was sought by Steelwood Realty LLC. The project involved the renovation of the historic building into condominiums. In 2010, the condominium owners applied for state permission to extend the city’s TSA by another five years, and it was granted, according to Council President Luis A. Aponte. Those incentives will end in 2017.

Aponte was among the council members who questioned whether the redevelopment needed any more assistance from the city. As with three other developments that have requested TSA extensions in recent months, the applicant cited unanticipated setbacks caused by the economic recession, according to city records.

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The Cosmopolitan building was the first of the four redevelopments to receive a review by the Finance Committee. All will be evaluated on their own merits, Aponte said Wednesday.

On Tuesday, he emphasized the TSA process is intended to be a tool to breathe back life into neglected properties suffering from disinvestment.

“The TSA was always meant to be an inducement to investment to begin to re-establish the tax base for private investment,” he said. “It was never intended to be a long-term subsidy to keep taxes down.”

Councilman Kevin Jackson said the project has generated taxes per unit that are less than what some of his constituents pay on car taxes. “Look at the comparisons. Some of our constituents probably pay more in car taxes,” said Jackson, who represents the Mount Hope area. “It’s not right. It’s not fair.”

Rental prices in the condominium building include $3,000 a month, according to John Igliozzi, the committee chairman. “These are pretty high-end apartments,” he said.

In a statement released Wednesday, Igliozzi noted other units in the building were listed for sale at a half-million dollars. “This project was a rousing success,” he said.

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