STEP – RI Future

August 2, 2016August 2, 2016

With little notice, PVD City Council voting on controversial TSA Tuesday

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The Providence City Council has called a special meeting for Tuesday night and among the agenda items is tax stabilization agreements (TSAs) for 60 Valley Street, LLC and 166 Valley Street, LLC on behalf of the Rising Sun Mills Project. The ordinance is sponsored by Council President Luis Aponte. The details of the TSA can be found here.

The City Council unanimously rejected a similar TSA, for 100 Fountain St, in February, under intense public pressure. Aponte then said, given the city’s precarious economic situation, “It’s the right signal that the [Finance] Committee is sending to the public and to the [City] Council.”

The TSA being considered by the council notes that the “projects been suffered serious financial setbacks and hardships as a result of the collapse of the real estate and financial markets over the past several years” and hence a five year extension of TSAs granted in 2003 and 2006 is needed. In return, “the Project Owners of 166 Valley Street will make an additional investment of approximately $5 million which shall be used to convert approximately 85,000 square feet of the building from a single tenant space to multiple commercial spaces. This will assist in the Project Owners in attracting new tenants to the Project and will create new construction and potential permanent jobs at the Project Site.”

The amount of revenue Providence will lose in this deal is unclear.

Stop Tax Evasion in Providence (STEP) released a press release Monday claiming that that the Providence City Council leadership is failing taxpayers.

“You would think that the Council would be in no rush to go handing out more of these questionable extensions to projects that have already been paying very little taxes for 15 years, but you would be wrong,” says the STEP press release. “While the… promise of new spending and jobs from Rising Sun Mill owners would seem welcome, there are absolutely no safeguards to ensure they will invest what they say. Thus the city can be certain of neither jobs nor permitting revenue.”

The special city council meeting was announced on Friday, July 29, as big news stories broke, such as Representative John Carnevale deciding not to appeal the Providence Board of Canvassers decision that ended his re-election campaign and Attorney General Peter Kilmartin announcing the non-results of his 38 Studios investigation. Technically, the City Council went on break for August and was not due to reconvene until September 1.

As a result, this important meeting was almost missed.

The city council will also be awarding hundreds of thousands of dollars in contracts at this meeting, according to the agenda.

February 3, 2016February 3, 2016

PVD City Council Finance rejects first of four proposed tax giveaways

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The Providence City Council Finance Committee unanimously rejected the proposed extension of the tax stabilization agreement (TSA) for the property at 100 Fountain St last night. The meeting, rescheduled after the unexpected death of former Mayor Vincent “Buddy” Cianci last week was on the same night and time as Governor Gina Raimondo’s State of the State address, so I had to access the recording of the meeting here.

During the brief discussion, Councillor Carmen Castillo noted that granting this TSA at a time when the City is facing an economic shortfall and planning to raise taxes on homeowners seems wrong.

Councillor Kevin Jackson proposed rejecting the TSA, pointing out that the agreement was granted to improve the condition of inactive buildings and not intended to be a lifetime grant.

Finance Chair John J. Igliozzi condemned the extension, saying, “The contract has been fulfilled. It’s become a high income subsidy.”

City Council President Luis Aponte, who is not on the Finance Committee, addressed the room, and said, “It’s the right signal that the [Finance] Committee is sending to the public and to the [City] Council.”

“Most tax treaties that have been approved in Providence have been beneficial to local development and have improved both new businesses and encouraged new housing,” said City Councillor Terrence M. Hassett in a statement, “However, the agreements have a shelf life and eventually expire. Extending them for a longer period, places other taxpayers in the position of paying more and that is coming to an end.”

The proposed TSA would have allowed the property owners to pay only 25 percent of their assessed taxes in the first year, with a 15 percent increase each year thereafter until year five, when the owners would have paid 95 percent of their assessed taxes. The owners stood to save hundreds of thousands of dollars, but as the STEP Coalition (Stop Tax Evasion in Providence) has pointed out, “[t]he construction jobs are long gone and these buildings have been occupied for quite some time.”

Mayor Jorge Elorza supported these tax deals, despite his earlier campaign promises to not give out TSAs “unless Providence could profit from the deal in some way.”

Sam Bell, a member of the STEP coalition who is also the executive director of the Rhode Island Progressive Democrats of America, said, “This was a huge win for Providence taxpayers! It shows that, when we work hard, we can defeat the most powerful corporate interests in the City of Providence.”

The Finance Committee still has to decide on three other, similar TSAs in the near future.

February 1, 2016February 2, 2016

Controversial TSA to be quickly decided on a busy night

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On Thursday night the Providence City Council Finance Committee was prepared to make a decision on a controversial extension of tax stabilization agreement (TSA) for the property at 100 Fountain St. Because of the unexpected death of former Mayor Vincent Cianci, the meeting was rescheduled to this Tuesday night at 6pm, one hour before Governor Raimondo’s State of the State address.

The proposed TSA will allow the property owners to pay only 25 percent of their assessed taxes in the first year, with a 15 percent increase each year thereafter until year five, when the owners will pay 95 percent of their assessed taxes. The owners stand to save hundreds of thousands of dollars, but the STEP Coalition (Stop Tax Evasion in Providence) has pointed out that, “[t]he construction jobs are long gone and these buildings have been occupied for quite some time.”

This is the first of four TSAs that will be voted on by the City Council this year. The four “deals pending before the city right now are even more egregious than usual,” said the RI Progressive Democrats (RIPDA) in a statement. “That’s because the development has already happened. There’s no question of encouraging development–the developers want their special tax deals to continue. This is just giving the city’s limited tax dollars to big developers. Pure and simple,” said the RI Progressive Democrats (RIPDA).

It is expected that the Providence City Council will raise property taxes on homeowners this year as Providence struggles financially. Many wonder why private taxpayers continue to pay ever higher taxes while connected developers get continued tax credits. STEP presented a petition signed by 400 Providence residents opposed to extending these TSAs.

The following City Councillors are on the Finance Committee:

Councilman John J. Igliozzi, Chairman
Councilman Terrence M. Hassestt, Vice-Chairman
Councilman Kevin Jackson
Councilwoman Sabina Matos
Councilwoman Carmen Castillo

January 7, 2016

STEP fights corporate welfare at City Hall with a carnival atmosphere

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A petition signed by nearly 400 Providence residents was delivered to City Hall Thursday night by STEP (Stop Tax Evasion in Providence) calling on Mayor Jorge Elorza and the City Council to reject four ordinances that would authorize $3 million in tax breaks to connected developers.

Details on Elorza’s tax breaks for existing properties

Mayor Elorza offering tax breaks Candidate Elorza opposed

The Extraordinary Rendition Band played outside City Hall in support of the protest and then lead a march inside, up the stairs and eventually into the City Council chambers. Seven police officers were on the scene.

At the same time the protesters arrived, people were arriving for the Bike the Night with Mayor Elorza event. The STEP protesters were eager to engage with the Mayor about the proposed tax breaks, but Mayor Elorza did not make it to the bike event that bore his name, citing a conflict.

City Council President Luis Aponte told me that the Council is “taking a real hard look” at the proposed tax breaks, noting that there is some affordable housing in the mix of properties under discussion, and these may need to be subsidized. Aponte also said that he’s “not sure” if the tax breaks amount to $3 million, assuring me that the actual number will come out as the City Council examines the proposals.

Sam Bell, executive director of the RI Progressive Democrats of America and STEP member called the proposed tax breaks “corporate welfare.” The tax breaks are to be awarded to a bunch of very well-off people who don’t want to pay their fair share in taxes, says Bell. These properties have already had over a decade of tax breaks, he said, and if they can’t get the numbers to work, they need to go to the banks and refinance. Otherwise, these tax breaks amount to a “bank bailout.”

John Jacobson, who organized the petition delivery, arrived in a Santa suit and called the proposed deal corporate welfare and “crony capitalism.”

“We shouldn’t live in a city where if you have the right last name or are connected you don’t have to pay taxes,” said Jacobson. He spoke to the crowd gathered outside the Counicl chambers for some time, explaining the background of the tax breaks connected developers have come to expect in the city.

The STEP coalition also includes Unite Here Local 217 and organizers Jenna Karlin and Heather Nichols-Haining attended the protest.

Candidate Elorza told the RIPDA that he was opposed to granting tax breaks to developers that didn’t generate positive revenue for the city. Mayor Elorza has yet to explain why he changed his mind on this issue.

January 6, 2016

Details on Elorza’s tax breaks for existing properties

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Here are the details of the multi-million dollar tax breaks Mayor Jorge Elorza and the Providence City Council are in the process of granting to corporate owners of existing properties even as the City Council weighs plans to increase taxes on Providence homeowners.

On December 1 of last year the City Council Committee on Finance considered four ordinances that would extend the existing tax stabilization agreements for Monohassett Mill LLC, Pearl Street Properties LLC and Pearl Street LLC, 60 Valley Street LLC and 166 Valley Street LLC on behalf of the Rising Sun Mills Project, and 100 Fountain Street.

STEP (Stop Tax Evasion in Providence) estimates the total cost of these deals to be in excess of $3 million. Mayor Elorza has expressed his support through Brett Smiley, his Chief Operating Officer, who spoke before the committee in support of these extended tax breaks here, here, here and here.

As STEP points out in their petition to garner public opposition to these tax breaks, “The construction jobs are long gone and these buildings have been occupied for quite some time.”

STEP will be delivering their petition to the Providence City Hall at 6:30 on Thursday evening.

Yesterday the Rhode Island Progressive Democrats (RIPDA) released footage of then candidate Elorza promising that the days of tax agreements with connected developers would be over in his administration. RIPDA maintains that the “deals pending before the city right now are even more egregious than usual. That’s because the development has already happened. There’s no question of encouraging development–the developers want their special tax deals to continue. This is just giving the city’s limited tax dollars to big developers. Pure and simple.”

Clearly, Mayor Elorza has a lot of explaining to do to Providence taxpayers in order to justify their housing tax increases in light of his generosity to connected insiders.