PROVIDENCE – Whether the anchor tenant of the Wexford Science & Technology building gets to benefit from the tax deal between the owner and the city is at the heart of a new legal dispute.
CIC Providence LLC, the coworking company renting space at 225 Dyer St., contends it is a part of the discounted tax agreement between the city and owner, according to the lawsuit filed in Providence County Superior Court last month.
In 2017, the city agreed to shave off a percentage of the additional city taxes the building owner would have to pay on its $88 million development project, saving the owner $13.6 million over the course of the 20-year tax stabilization agreement.
For the first five years of the agreement, including the 2021 tax year, owner Providence Innovation District Phase I Owner LLC would pay $30,000 in city taxes, based on the original $818,400 value of the property. By 2037, the final year of the agreement, the tax bill will increase to $2.2 million – based on the current tax rate – reflecting the $59.4 million property value with the new development.
CIC Providence, which signed a lease agreement in 2017, renovated and made improvements to its 60,000-square-foot portion of the building. These improvements were then taxed by the city, forcing CIC to pay more in tangible taxes than the entire building was taxed under the tax stabilization agreement. Exactly how much CIC paid in tangible taxes is unclear, but the company says it overpaid by $582,000 and is demanding the city return the money.
The lawsuit, which names both the city of Providence and Treasurer James Lombardi as defendants, also asks for an award of contract damages, although an amount is not specified.
In a response filed on Aug. 18, the city disputes CIC’s claims, saying that the tenant is not part of the tax agreement and therefore does not benefit from the tax discount granted to the owner.
The original tax agreement defines property owners as “any entity with a recorded legal or equitable right and/or interest in and/or to the property, including any and all successors and assigns.”
Andrew Grande, a spokesperson for Mayor Jorge O. Elorza, said the city would not comment on ongoing litigation. CIC Providence and its attorney could not immediately be reached for comment.
Wexford Science & Technology, the parent company of the building owner, is not named in the lawsuit.
As of Wednesday, no hearings have been scheduled in the case.
Nancy Lavin is a PBN staff writer. You may reach her at Lavin@PBN.com.
