City Council approves tax deal for Providence hotel

HOTEL HIVE PROVIDENCE, the proposed $39 million reuse of two vacant downtown buildings, was approved for a tax break by the Providence City Council, after a subcommittee opposed it. / COURTESY ABDO DEVELOPMENT

PROVIDENCE – The City Council on Thursday approved a $2.7 million tax break for a developer planning to turn two vacant downtown buildings into a boutique hotel, restaurant and coworking space.

The 20-year tax-stabilization agreement for the Hotel Hive Providence was approved by an 8 to 6 vote, despite vocal opposition in the audience from union members concerned about the city’s monitoring of other TSA agreements.

The council still must give a second vote of approval for developer Jim Abdo’s $39 million project, but yesterday’s support overrode a finance subcommittee’s earlier vote not to advance the TSA request to the full chamber.

Finance Committee Chairman John Igliozzi compared the proposal to the 1996 tax treaty for the Providence Place mall, according to WPRI-TV CBS 12.

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“That tax treaty that we voted 8 to 7 started the ball rolling,” Igliozzi said. “From the IGT building to the Blue Cross building … none of that existed.”

But Councilwoman Carmen Castillo, who has helped unionize fellow hotel workers, opposed the TSA request, according to WPRI-TV.

“What are we doing? We have yet to support people from Providence,” she said. “That money is for the people from Providence.”

Abdo’s project includes the former Providence Journal building and adjacent Kresge building on Westminster Street.

It has the support of Mayor Jorge O. Elorza, the Providence Preservation Society and others who think it can serve as a catalyst for additional development. It’s already won approval for design plans and received a $6 million tax-increment-financing deal from the state.

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