PROVIDENCE – The city Finance Committee on Tuesday signed off on a $1.2 million tax break for a Providence development project on a series of empty lots in Federal Hill.
The decision to offer a reduced property tax rate to 321 Knight Street LLC for first 12 years of the project will be submitted as a recommendation to the full City Council for a final decision. The project from K&S Development seeks to transform a series of vacant lots at the corner of Knight and Westminster streets into a five-story, mixed-use building with 34 market-rate apartments and ground floor retail, according to plans already approved by the City Plan Commission. Once completed, the project will increase the value of the properties by nearly $7,000, adding $253,000 to the city tax rolls for each year after the tax stabilization agreement ends, according to city financial analysis.
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The project is estimated to cost $6.8 million and will create 30 jobs during construction and 10 during its permanent operations, according to documents from the developer submitted to the city.
In a PowerPoint presentation to the city Finance Committee in March, the developer stated that the tax break was “not viable” if subject to full taxation, with the cost of debt service exceeding the expected income. The city’s tax stabilization ordinance seeks to help developers offset these startup costs by shaving off a portion of property taxes in incrementally decreasing amounts. Earlier this year, the City Council passed a series of changes to its TSA policy seeking to standardize the review process and setting new or more-stringent standards for wages, apprenticeship program participation and use of women and minority-owned contractors.
However, as the K&S Development project falls under $10 million, it is exempt from wage requirements for construction and post-construction jobs, according to city policies.
Nancy Lavin is a PBN staff writer. You may reach her at Lavin@PBN.com.
