Home Economy Government Tax stabilization agreement for Providence housing project advances

Tax stabilization agreement for Providence housing project advances

By

Christopher Allen

-

05/24/2024

136-Westminster-St-Lauderdale-Building (1) — THE PROVIDENCE FINANCE COMMITTEE has approved a proposed tax stabilization agreement for the property at 136 Westminster St. That would save the developer $714,529 in property taxes over 10 years./ COURTESY NORTHEAST PRIVATE CLIENT GROUP

PROVIDENCE – The city finance committee approved a proposed tax stabilization agreement for the property at 136 Westminster St., which if finalized by the full City Council would save the developer $714,529 in property taxes over a 10- year period, reducing total liability from $2.4 million to $1.7 million. The vote on May 22 was

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PROVIDENCE – The city finance committee approved a proposed tax stabilization agreement for the property at 136 Westminster St., which if finalized by the full City Council would save the developer $714,529 in property taxes over a 10- year period, reducing total liability from $2.4 million to $1.7 million. The vote on May 22 was 4-1, with council member Miguel Sanchez opposed. The owner, 136 Westminster LLC, has vowed to spend $6.4 million to convert the historic Lauderdale Building into a mixed-used site with commercial space and 24 market-rate apartments on the top four floors, according to the resolution. The R.I. Commerce Corp. board of directors recently approved a $730,000 grant for the New York-based developer from the First Wave Closing Fund, a discretionary program run by R.I. Commerce Corp. that provides public money to developers unavailable from other sources. Jeffrey B. Mendell, 136 Westminster LLC principal, owner of JBM Realty Capital Corp. and managing director of Greenwich Development Partners, is listed as manager of a separate limited liability corporation that purchased the 35-space parking lot at 87 Weybosset St. for $750,000 in November 2023, according to city real estate records. Under the city agreement, for the first two tax years of the stabilization term, taxes would be calculated on the base rate of the current assessment of $1.87 million, equal to $65,679,12. In each year following, the owner would pay the same base rate plus a phase-in tax that would increase each year from a projected $26,890 in 2026 to $277,537 in 2033. Construction must start within 18 months of finalization and a Certificate of Occupancy must be secured from the Department of Inspections and Standards within 36 months, although the owner can submit a request to the council for an extension within 18 months of that deadline. There would also be annual payments to the Providence Parks and Recreation Trust Fund equaling 7% of the estimated total of taxes abated after paying a set $1,000 during the first two years. A previous analysis by New York City-based Appleseed Inc. estimated that construction would net $284,000 in state taxes, create 74 temporary jobs in Rhode Island and generate $9.1 million in statewide economic output. Mendell on Wednesday told the committee they had been trying to lease the vacant office space on the top floor for over five years. The only remaining tenant is the Christian Science Reading Room operated by the First Church of Christ Scientist. Franklin Rogers Ltd., a men’s clothier, was evicted by the previous landlord in September for failure to pay more than $65,000 in back rent and utilities. Committee chair Helen Anthony expressed support for the agreement, saying the developer had convincingly shown that "without the [TSA], this project is not financially viable." “I have been convinced this is necessary. It's an historic building and necessary for the vibrancy of Westminster Street," she said. The City Council is scheduled to meet next on June 20. Christopher Allen is a PBN staff writer. You may contact him at Allen@PBN.com.