City panel recommends tax discount for former Karma nightclub

THE DEVELOPER planning to revive the former Karma nightclub in the Jewelry District with microloft apartments and first-floor retail received preliminary approval for a 10-year discount on city property taxes. /COURTESY PROVIDENCE ARCHITECTURE

PROVIDENCE – A dilapidated downtown building best known as the site of a double shooting in 2014 is slated for revival, with a tax break aimed at sweetening the redevelopment deal.

The city Committee on Finance on Monday gave preliminary approval to a 10-year tax- stabilization agreement for the former Karma nightclub at 101 Richmond Street. The tax treaty would save developer Dustin Dezube an estimated $370,000 in city property taxes over the next 10 years, according to Lawrence Mancini, chief financial officer.

In exchange, Dezube, a prominent Providence real estate developer who manages more than 100 city apartment buildings under his company Providence Student Living Capital LLC, plans to revive the long-vacant building as a set of 19 microloft apartments, similar to those in The Arcade Providence. The $3 million redevelopment project also includes space for ground-floor retail, including local bar operator, Providence Business News previously reported.

Dylan Conley, an attorney representing Dezube, stressed the benefits of the redevelopment, explaining how the abandoned building, which cannot support structural additions, is worth less in its current condition than as a vacant lot.

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The finance committee’s 5-0 vote serves as a preliminary approval, sending the proposed tax treaty to the full council for a final decision.

Also on Monday, the committee approved two other tax treaties that will add a mix of market-rate and workforce housing to properties in the downtown and Hartford neighborhoods, respectively. The 4-0 votes, with Councilwoman Helen Anthony abstaining, advance both proposals to the full City Council for future consideration. 

The 10-year tax-stabilization agreement with 71 Richmond St. LLC comes amid plans to renovate the historic brick building with 10 market-rate apartments, according to Nicholas Hemond, the attorney representing the developer. The two nightclubs on the first floor of the building will remain but are not allowed to expand under the proposed tax treaty.

The city has not conducted its own financial analysis of the project and proposed tax discount, but according to Hemond the incremental tax discount will save the developer about $360,000 in taxes over 10 years, while increasing the property’s value from $1 million to $3.5 million once redevelopment is completed.

A RENDERING showing the planned renovation of 541 Hartford Ave. as a mixed-use building with 30 apartments, including 18 designated as “workforce housing.” /COURTESY E2000 REALTY LLC

A separate tax treaty proposed for 547-533 Hartford Avenue coincides with developer E2000 Reality LLC’s plans for a mixed-use development, including workforce housing. The $9.5 million project aims to renovate the existing brick building and surrounding empty lots with 30 apartments, 18 of which would be rented at 85% of market rate, which is considered workforce housing, according to Jeffrey Padwa, the attorney representing the developer. There would also be two commercial, ground-floor tenants, one of which would be Employment 2000, the staffing agency also owned by the developer. The city has also not yet conducted its own financial analysis of the deal, but according to Padwa, the 10-year tax treaty would save the developer $290,000 in property taxes in exchange for increasing the assessed property value by nearly $1.5 million.

Anthony abstained from both votes after voicing concern about the need for a city assessment on each deal before a decision was made.

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

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