PROVIDENCE – The pieces of a complex funding puzzle for the “Superman” building redevelopment are falling into place, with the City Council giving the final stamp of approval to a tax treaty Thursday.
The 11-2 vote, with one abstention, was the second of two needed on the 30-year tax agreement for developer High Rock Westminster LLC. The treaty saves the developer $29.4 million, or just over 50% of the property taxes, over the next 30 years in exchange for increasing the property’s value through redevelopment.
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Currently, the empty skyscraper is valued at $14.2 million, which equates to about $500,000 in annual property taxes. After the 30-year, incremental tax discount ends, the developer is expected to pay a $2.2 million annual tax bill based on a projected $63.4 million value.
While the tax treaty is not the largest-dollar piece of the many city and state incentives baked into the $223 million project, proponents stressed that the tax discount was critical to ensure the project can proceed.
However, critics pushed back during a public hearing in October, saying the proposed rents for the affordable housing included in the project were still too high.
The differing perspectives resurfaced again Thursday, with councilmembers opining on the project’s pros and cons after their vote.
“Right now, my heart wouldn’t let me do it because of the people I see who are suffering,” said Councilwoman Mary Kay Harris, who voted against the deal.
Councilman Pedro Espinal, who supported the tax treaty, described it differently.
“I see the value in this investment, but I am not forgetting what my colleagues are saying about affordable housing,” Espinal said. “We can have both.”
Councilwoman Kat Kerwin also voted against the treaty, while Councilwoman Rachel Miller abstained.
The project, which is slated to begin with demolition work this year, would fill the former office building with 285 apartments, 20% of which are reserved for renters below a certain income level, along with office and community space.
The project has already been approved for $21 million in state incentives through the R.I. Commerce Corp., a $10 million loan from the Providence Redevelopment Agency and a $5 million allocation in the city’s fiscal 2023 budget.
Also on Thursday, the council gave second passage to an amended tax treaty for the developer of the former Providence Journal building on Westminster Street and the neighboring Kresge Building. The 20-year tax agreement, approved by a 13-1 vote, with Miller voting against, will save developer Jim Abdo an estimated $4.2 million in taxes on the $52.7 million Hive Life project.
The amendments to the existing agreement, first inked in 2019, were made after Abdo ditched his original plan for a boutique hotel in favor of a residential-focused project featuring 124 apartments.
Currently, the vacant Journal building and the Kresge Building are worth $3.9 million and generate $139,700 in city taxes a year. After redevelopment, they will be worth $20.9 million in 2041, generating $739,000 in taxes a year at full taxation.
Both tax treaties now head to Mayor Jorge O. Elorza’s desk for signature, though Elorza has already indicated his support.
Councilman Michael Correia was absent from the meeting.
Nancy Lavin is a PBN staff writer. You may reach her at Lavin@PBN.com.
Waste of taxpayer dollars. Brown will wind up owning it, just like RISD wound up owning the old RIHT HQ on the next block.