‘Superman’ building deal would cut $29M from tax bill

THE PROPOSED TAX DEAL for the 'Superman' building would give the owners a $29 million discount on property taxes over the next 30 years, according to a new fiscal analysis by the city. / PBN FILE PHOTO/
PAMELA BHATIA

PROVIDENCE – Developers planning to redevelop the city’s tallest skyscraper could save $29 million in property taxes over the next 30 years.

The proposed tax deal between the city and the “Superman” building owners would cut property tax bills by more than half, according to new financial analysis shared with Providence Business News on Sept. 30. The 30-year tax-stabilization agreement is one of a host of city and state incentives baked into the deal to redevelop the former Industrial Trust Co. building with residential, retail and office space. 

According to the analysis, owner High Rock Development LLC would pay $26.8 million in city taxes over the course of the 30-year agreement, with annual payments increasing incrementally as the discount is reduced. Without the proposed tax deal, the property owners would have to pay $56.2 million over the same period, based on current tax rates and the estimated increase in property value that accompanies the redevelopment.

In other words, the proposal would shave off $29.4 million, or just over 50%, of the property taxes over the next 30 years. 

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Although a discount on property taxes was part of the original deal between the city, state and developer to revive the empty building, the amount of savings a TSA would offer was not made public previously.

Right now, the developer pays just over $500,000 in property taxes based on the $14.2 million assessed value of the empty building. By the time the project is completed, the property will be worth $63.4 million, with a $2.2 million annual tax bill, according to the city analysis.

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.

“It is important to note that the construction of this property would not be possible without a state and city incentive package,” Lawrence Mancini, the city’s chief financial officer, said in a memo to the City Council’s Committee on Finance. “Without an incentive package, this historic landmark building would remain unoccupied and unable to contribute to the downtown economy.”

Still, the tax deal has drawn criticism, including from former mayoral candidate Gonzalo Cuervo, who said the amount of city incentives was overly generous given the city’s tenuous financial position.

The 30-year agreement still requires approval from the City Council. Part of its review will include a public hearing hosted by the Committee on Finance, though a date has not been determined.

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

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