PROVIDENCE – A controversial tax deal inked between the city and a hotel developer may need to be revised due to the pandemic.
Jim Abdo, the D.C.-based developer behind the $39 million Hotel Hive Providence project, told Providence Business News on Monday that COVID-19 has stalled plans for the combined hotel, microloft and cowork space on Westminster Street. Abdo insisted he was “bullish” about the city and the project, but said the pandemic’s toll on the hospitality industry has forced him to “sit and wait it out” on a majority of the project. That may mean Abdo cannot meet the deadlines set in the tax stabilization agreement with the city.
The agreement, which gives Abdo a $2.7 million break on property taxes over the course of the 20-year deal, was met with controversy by residents, union representatives and some council members, but was eventually approved by the city in December 2019.
The agreement requires Abdo to begin rehab or construction within 12 months, and to secure a certificate of occupancy within 36 months. While Abdo said the preliminary work, such as soil testing, traffic study and hiring of several engineering consultants, meets the 12-month deadline for construction that ended in December 2020, he was uncertain if the project would be finished and ready for an occupancy certificate by December 2022.
While he has not formally communicated this to the city, he hoped city leaders would be “sensitive” to “making adjustments” to the agreement.
Council Finance Chairman John J. Igliozzi, who sponsored the city tax deal proposal, said he thought Abdo’s request was reasonable.
“No harm, no foul,” Igliozzi said, noting that as long as Abdo is paying the base property taxes for the long-vacant buildings, one of which formerly housed the Providence Journal, he supported some flexibility in the construction timeline.
Mayor Jorge O. Elorza could not immediately be reached for comment.
The city is currently considering major changes to its policies for tax deals with developers aimed at giving the council more authority over reviewing smaller-sized deals and expanding wage, labor and reporting standards for the projects. Council President Sabina Matos, who sponsored the reform legislation, was also not immediately available for comment.
The project also received $6 million in tax-increment financing through the state.
Nancy Lavin is a PBN staff writer. You may reach her at Lavin@PBN.com.
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