‘One thing [won’t] fix our economy’

BUILDING BLOCKS: Providence Mayor Angel Taveras says that underused buildings have the ability to generate economic activity if used to their full potential. Chief among those are the Superman Building and the South Street Power Station. / PBN PHOTO/TRACY SHAW
BUILDING BLOCKS: Providence Mayor Angel Taveras says that underused buildings have the ability to generate economic activity if used to their full potential. Chief among those are the Superman Building and the South Street Power Station. / PBN PHOTO/TRACY SHAW

With his city’s fiscal position stabilized, Providence Mayor Angel Taveras has turned toward growing the local economy and redeveloping underutilized properties. That’s brought him up against some of the most difficult and expensive challenges in Rhode Island. They include saving its tallest building, the Industrial Trust Tower, and its most spectacular historic-redevelopment failure, the South Street Power Station (Dynamo House). They also include bringing long-sought streetcar service to the capital city and replacing abundant surface parking lots with productive, activity-generating buildings.
He is preparing to release a fiscal 2014 budget featuring a commercial-property-tax-rate freeze.

PBN: What are you asking the state to do, specifically, to help revive the Superman Building?
TAVERAS: At this time: nothing. I have been waiting for an economic-impact study that should be available within days. Once I have a chance to look at that, I will be in a better position to say whether we will have a specific ask or not. My focus is to make sure we have productive activity going on within that building. That could be office space. That could be apartments. And depending on what makes the most sense, we have to look at what the costs are and that will play a big role in deciding what the most sensible thing is to do there.

PBN: Your legislative agenda included new historic tax credits for the Superman Building revitalization, and some reports attached a price tag greater than $40 million.
TAVERAS: This is all based on an agenda for a meeting I had with the legislative delegation. One of the items on the agenda was the Superman Building and talking about historic tax credits. The same item points out that we were waiting for an economic-impact study and people have run with that to suggest we are making a specific request. … There is no legislation.

PBN: You haven’t made a specific request, but you do support the concept of using state historic tax credits to finance redevelopment of the Superman Building, right? TAVERAS: This is an important building for the city and state, a symbolic building. In the end we will see what makes the most sense. If we need state assistance, we will talk to them about it, be very specific about it and have a very public vetting. I am very interested in something the governor has talked about, which is having state workers in that building. That creates a good opportunity that is good for businesses downtown and is good for our city. A lot of the buildings that have been restored have had some kind of tax credits.
PBN: Brown University announced it will expand its engineering school adjacent to the current one. Is having Brown not spread to other parts of the city a positive or negative?
TAVERAS: I’ve seen the study and spoken with Brown and understand their reasoning with respect to the engineering school. The information we have seen shows a likelihood they will expand, but it is a much smaller expansion beyond College Hill. I look at it as another opportunity to work with Brown, to work with our tax-exempts to attract other businesses to the Knowledge District and Interstate-195 land. I said in my economic-development action plan that we need a diverse economy. We need to realize that no one thing is going to fix our economy. We need everything, from science to scrap. Meds and eds will be important, but in and of themselves they are not going to be the solution. There is not one solution.

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PBN: You’ve singled out the South Street Power Station (the Dynamo House) and Arnold Building (on Washington Street) as redevelopment priorities. Any progress?
TAVERAS: We are working with people who have interests in the buildings and trying to facilitate development, recognizing that we have to get people back to work in our city and state. … These are special buildings and historic buildings in our society, and we need to do everything we can to get them to be productive.

PBN: Was the connection between Brown and the South Street Power Station overblown?
TAVERAS: I don’t think so. Brown, like us, they do their due diligence. I think they looked at it – I know that they looked at it. They looked at it and examined it and came to their conclusion. I don’t think it was overblown at all. There is interest. There may be interest in a different type of use there, a different intensity of use as well. For them this makes more sense.
PBN: On the subject of surface parking lots, and developing them, have you ever considered a split tax rate, where land is taxed at a higher rate than the buildings on it?
TAVERAS: We are looking for a new tax classification for owner-occupied versus nonowner-occupied, so we will be able to eliminate the homestead exemption and our tax rates will be in line with other cities and towns. But taxing land at a higher rate is not something we are looking at.

PBN: General Treasurer Gina M. Raimondo has proposed a state revolving loan fund for municipal road repair, while Gov. Lincoln D. Chafee is pushing an end to borrowing for highway maintenance, and Providence is borrowing $40 million to repave streets. What’s the best approach?
TAVERAS: For us it was important to improve our infrastructure. It was something I felt strongly about so I put it to the voters. I was proud to have 89 percent of the voters vote in favor of it. The bonds were oversubscribed, and we got a better interest rate than we expected.

PBN: Do you think the treasurer’s proposal could be helpful to the city if it happens?
TAVERAS: I don’t know. My understanding of the treasurer’s proposal is that we would not be able to borrow nearly enough money under the general outlines I have seen. It would not allow us to do what we are doing now. That doesn’t mean it will not be helpful to other cities and towns.

PBN: The Providence Innovation Partnership was suspended recently, and you are reviewing the results before starting it up again, if at all. What specifically are you looking for? TAVERAS: You want to see what has happened with the companies. How many have stayed in Providence? Have they expanded their hiring? Are they growing? Is there a path to success? Have they failed? How did they fail and why? But I don’t think you can continue, when you only have a small amount of money – $10 million [of which $1.65 million was directed to PIP] – to continue to make that investment without having an opportunity to reflect on it and how productive it has been.

PBN: How are you going to make the streetcar a reality in Providence?
TAVERAS: We have to determine a funding stream for the streetcar, and that is what we are working on right now. The issue with the streetcar is how you fund it and how you handle the startup costs, which are substantial. You have to look at it from an investment standpoint. It is a good economic-development tool. There are some things we are looking at, and we will have more to say on that, but it is similar to what I said before about doing your due diligence. What are the options you have? What are the options for a public-private partnership?

PBN: Such as a district of property owners served by it that would pay?
TAVERAS: That, but there are some other things I am more focused on. There is something called EB-5 financing – foreign investment coming in for visas – that has been used in other places. I am not sure if they have funded a streetcar, but that is a concept we are looking at. When I say creative, I am not saying putting more burden on the taxpayer, but other streams that people may not have used before.

PBN: Are you happy with how the Interstate 195 redevelopment process is going?
TAVERAS: I think we have really good people on the commission. And certainly I would like to see the pace accelerate. But I would like to see the pace of everything accelerate. It is not just that: I want to see our economic growth accelerate and educational outcomes accelerate. •

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