PROVIDENCE – Plans to offer a 30-year-long property tax discount on the “Superman” building are taking shape, with an ordinance introduced at the Providence City Council meeting Thursday night.
The tax stabilization agreement between the city and High Rock Westminster St. LLC is one of a host of incentives baked into the deal to redevelop the vacant skyscraper with residential, retail and office space. However, a city tax discount for the former Industrial Trust Co. building requires council approval, and is not without critics.
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The proposal was introduced at the council meeting Thursday after being added to the agenda as an “off docket item,” and immediately referred to the finance committee for further review. There is no timeline for when the council will vote on the agreement, according to Parker Gavigan, a spokesperson for the council.
Exactly how much the development team would save in property taxes under the tax deal is unclear. Right now, the developer pays just over $500,000 in property taxes based on the $14.2 million assessed value of the empty building. Renovating and filling the skyscraper with apartments, retail and offices will presumably increase its assessed value, and therefore its tax bill. The 30-year TSA – twice as long as the usual city tax deals offered to developers – calls for incrementally increasing taxes based on the value of the redeveloped property. It also includes a stipulation that the owner must show “good faith efforts” to contract with city vendors for equipment, supplies and services on the building construction.
The $220 million project has already been approved for $21 million in state incentives through R.I. Commerce Corp., a $10 million loan from the Providence Redevelopment Agency and $5 million in the city’s fiscal 2023 budget.
The federal government is expected to provide $22.04 million in historic tax credits and $2.1 million through the New Market Tax Credits program, according to the financial term sheet for the project. The nonprofit Rhode Island Foundation also agreed to provide the developer a bridge loan of $15 million commencing at the issuance of a certificate of occupancy for the building, with a 1% interest rate.
Ahead of these upcoming approvals, the developer is working on pre-construction preparations, with plans to start demolition work in the fourth quarter of 2022, Bill Fischer, a spokesperson for the company, said in an email Friday.
Nancy Lavin is a PBN staff writer. You may contact her at Lavin@PBN.com.
