City Council gives final OK to amended ProvPort tax agreement

THE PROVIDENCE CITY COUNCIL on Thursday gave final approval to a tax agreement with ProvPort Inc., authorizing the holding company to retain control of, and share tax revenue from, its swath of portside land for another 30 years. / COURTESY PROVPORT INC.

PROVIDENCE – The wave of criticism over the city’s tax agreement with its primary port operator appears to have calmed, with the City Council unanimously approving an amended version of the 30-year tax extension on Thursday.

The 14-0 vote marks the end to a monthslong controversy over the agreement allowing holding company ProvPort Inc. to retain control of, and share tax revenue from, a section of city portside land. (ProvPort, a holding company, bought the land for $16.4 million in 1994 but has since leased it to the city-controlled Providence Redevelopment Agency, which in turn issues tax-free bonds to pay the city and then sublease the land back to ProvPort.)

The initial tax and lease agreements, which extend existing treaties by 30 years, drew mounting objections from area residents, environmental justice advocates and some councilmembers, with concerns over the speed of the council’s consideration, as well as the content of the agreements themselves. 

The port has been a focal point for criticism in recent years, with area residents railing against the heavy industrial operations due to health, safety and environmental impacts. The harshest criticism has been directed at a strip of waste recycling and metal companies along the waterfront section of Allens Avenue, which is separate from the 135-acre swath of land under ProvPort’s control.

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The prior city council gave first passage to the tax agreement, as well as a corresponding lease, in December but the tax treaty needed a second vote to become final. The new City Council, which took office in January, made a series of changes to the agreement aimed at incorporating community concerns.

The version approved Thursday prevents ProvPort from expanding fossil fuel infrastructure within its 135-acre operations, although it can make improvements to accommodate the three fossil fuel companies already leasing space there. The city is also requiring Waterson Terminal Services LLC, which manages the port, to provide regular updates on ProvPort’s tenants: who they are, when their leases expire and if they have violated any environmental laws.

The extra reporting requirements come weeks after one ProvPort tenant, Univar Solutions USA Inc., agreed to an $800,000 settlement with the U.S. Environmental Protection Agency for not following safety protocols for toxic chemicals across four sites, including two in Providence.

Councilwoman Helen Anthony acknowledged that the updated agreements are “not perfect” but added that they “lay the groundwork” for enhanced environmental and safety protections for the community and economic development of a key swath of city land that is expected to become even more crucial as the offshore wind industry grows.

The new tax agreement increases the percentage of revenue ProvPort pays the city from 5% per year to 9%, with an expected payment between $800,000 and $1.1 million in the first year of the new agreement, according to Anthony. In comparison, ProvPort would pay $764,000 in city property taxes based on its current assessed value, Anthony said.

The treaty also carves out 1% of the annual tax revenue for “community needs,” with a specific $25,000 allotment for the Ward 10 neighborhood closest to the port. Another 1% of tax revenue will be set aside for sustainability needs, including air quality and environmental remediation.

Meanwhile, the 30-year lease extension, which already received approval but was not considered official until the tax agreement passed, paves the way for a planned $11 million in capital improvements and expansion, to be paid for through new bonds issued by the Providence Redevelopment Agency. The bond money will also help ProvPort develop a master plan outlining its future growth and expansion plans, which in turn will let it tap into the massive amounts of federal infrastructure and renewable energy funding recently made available, Nicholas Hemond, an attorney for Waterson Terminal Services, said previously.

The new tax and lease agreements run through 2052.

Nancy Lavin is a PBN staff writer. You may reach her at Lavin@PBN.com.

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