PROVIDENCE – After previously postponing a decision on controversial tax and lease agreements with the city’s primary port operator, Providence officials reversed course and approved the deals after all.
The Providence City Council’s unanimous votes Thursday authorize 30-year extensions to tax and lease agreements with ProvPort Inc. The tax treaty requires a second vote which will come before the council – including a host of new members – in 2023. The lease extension will not take effect if and until the tax treaty passes for a second time.
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The agreements give nonprofit ProvPort Inc. control of the 135-acre swath of portside land through 2052, laying out a revenue-sharing agreement in lieu of annual property tax payments to the city and authorizing the Providence Redevelopment Agency to issue bonds for portside capital improvement and expansion projects. (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 proposals drew criticism from community residents and environmental advocates, who slammed the city council for “ramming” the deals through in their final weeks in office. There were also concerns that the agreements were too vague, with critics contending they lacked necessary details about the types of businesses that can occupy the port and did not specifically require compliance with the city’s separate Climate Justice plan.
A vote scheduled for the council’s Dec. 1 meeting was put off amid these concerns.
The versions of the agreements approved Thursday sought to incorporate this feedback, with amendments banning fossil fuel expansion in ProvPort and defining the types community projects that will be funded through a portion of the tax revenue, among other changes.
Councilman Pedro Espinal, who previously opposed the deals, praised the updated versions for taking community concerns into account.
“This really sends a message that people’s voices here are heard,” Espinal said.
Councilwoman Jo-Ann Ryan touted the tax agreement as “the best tax treaty this council has ever passed,” noting that the revenue-sharing model adopted for the next 30 years has ProvPort contributing more than it would otherwise pay based on property taxes.
The new tax treaty increases the percentage of port profits paid to the city from 5% to 9%, including specific allocations reserved for sustainability and neighborhood needs. According to Nicholas Hemond, the attorney for Waterson Terminal Services, which manages the port, ProvPort will pay $840,000 in the first year of the new agreement, instead of the $769,000 it would pay in property taxes owed based on its current assessed value.
Meanwhile, the 30-year lease extension aims to pave the way for a planned $11 million in capital improvements and expansion, to be paid for through new bonds issued by Providence Redevelopment Agency. The bond money will also help ProvPort develop 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, Hemond said.
Amendments incorporated Thursday stipulate that the bond funds are specifically “intended, in part, to facilitate the ability of the Port of Providence to increase its participation in offshore wind industry and to address environmental justice issues.”
Ryan stressed the importance of helping build the port into “something that the capital city can be proud of.”
“The Port of Providence is an absolute jewel, and we need to celebrate it,’ Ryan said.
A second vote on the tax treaty has not been scheduled as of Friday.
Also on Thursday, the city council unanimously approved creation of a designated tourism district aimed at reviving the hotel industry with more marketing. The new Providence Tourism Improvement District, slated to launch early next year, sets aside 2% of gross hotel room revenue into a fund managed by a committee of hotel owners and the Providence Warwick Convention & Visitors Bureau. In its first year, the district is expected to bring in $1.6 million in revenue, with 90% going toward advertising, marketing, sales, and opportunity funding for the city’s lodging industry.
Nancy Lavin is a PBN staff writer. You may reach her at Lavin@PBN.com.
This doesn’t make sense for the taxpayers. If you read this carefully: ProvPort (which is run by the Waterson family which owns Waterson Terminal Services which manages the port) owns the land and leases this land to the Providence Redevelopment Agency (PRA) which in turn issues tax-free bonds to pay the city and then subleases the same land back to ProvPort.
Sounds like the PRA issues taxpayer backed bonds to A) make the payments (in lieu of property taxes) to PVD on behalf of ProvPort and B) to make the land lease payments to ProvPort.
Sounds like taxpayers are floating bonds to pay PVD (i.e., themselves) property taxes that ProvPort should be paying.
Hopefully, the new City Council Members will be smart enough to vote against this Ponzi scheme.