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This Thursday at 6pm, the Finance Committee of the Providence City Council is meeting to consider a generous tax break proposed for the Custom House downtown office building.
Currently, the Custom House is downtown office space, and the developers want to convert the upper floors to apartments. And they want public money to do it.
The deal the developers are pushing for is structured as a 12-year tax stabilization. For the first three years, there would be no new taxes, and the new taxes would ramp up over the next nine years. Make no mistake, this is a special deal for a specially connected developer. These deals aren’t being made available to ordinary small-time developers, who can’t afford the same network of well-connected lobbyists, lawyers, and tax credit brokers. If you expand your house or renovate a dilapidated triple-decker, you don’t get your taxes stabilized.
This special tax break is crucially important because the city is currently writing a standardized policy on special tax breaks for big developers. During the campaign, Mayor Jorge Elorza was critical of the abuses of the tax-stabilization agreement program. Newly elected Council President Luís Aponte has been even more vocally critical of abusive and unfair special tax breaks for developers. According to multiple City Hall sources, the new standardized policy could severely restrict some abuses, making these special breaks much shorter than the twelve years being proposed for the Custom House.
That’s why stopping this deal is so vitally important. If the city approves an excessively long twelve-year stabilization, it will set the bar abysmally low for the standardized policy. Valuable revenue that could go to underfunded priorities like schools, snow plowing, and tax relief will be wasted on corporate special interests.
There is serious skepticism on the Council over such an overly generous deal. Its future is very much up in the air.
That’s why it will be so important to come to this hearing at 6pm in the Council chambers. We can stop this unfair deal.
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The groups are “seeking a city ordinance that would require all companies getting tax breaks in Providence to pay workers a living wage of at least $15/hr, provide paid sick days, health benefits, and fair, predictable schedules.” They also want the city to “follow the First Source ordinance by hiring residents of Providence, prioritize hiring people from high poverty neighborhoods, and make sure that people working these jobs have a pathway to a real career by using apprenticeship programs.”
The groups are also asking Mayor Jorge Elorza to live up to the campaign promises he made while still a candidate at a mayoral forum in South Providence, “to set up a community board with the power to approve/disapprove projects, take back money if companies aren’t living up to what they say they’ll do, and negotiate the construction of projects community members identify as needs, such as affordable housing, or fixing up an abandoned lot into a park.”
The Providence Police Department cleared the streets ahead of the marchers, who started their protest outside of Gourmet Heaven on Weybosset St. This is the third time protesters gathered outside the restaurant, which is accused of stealing wages from employees here in Rhode Island in a situation similar to Connecticut where substantial fines have been levied against the company for wage theft. Two workers addressed the crowd, and spoke about the abusive working conditions they say they endured. One worker said he was told, when he demanded his pay, that if he complained the management would have him deported.
The marchers then walked a short way up the street to Cilantro restaurant, a chain recently fined by the US Labor Department for wage theft to the tune of $100,000. Oddly, a Cilantro worker met the crowd, offering tortilla chips and bottled drinks, which were refused. “We don’t want your crumbs, we want our money,” quipped Michael Araujo of ROC-RI.
The march then continued across the city to the Providence Hilton Hotel, owned by The Procaccianti Group, where hotel workers were already outside picketing. The two groups merged into a protest of well over 150 people. The workers at the Providence Hilton announced a worker-led boycott of the hotel, joining the boycott efforts of workers at the Renaissance Providence Hotel (also owned by Procaccianti Group.) Employees from the Omni Providence Hotel were also on hand to support the boycott effort.
City Councillor Carmen Castillo spoke to the crowd about her experiences working at the Omni Providence Hotel, which was owned by the Procaccianti Group when it was called the Westin. Since the Procaccianti Group sold the hotel, worker conditions have markedly improved. Also speaking to the crowd was hotel worker Santa Brito.
The protest then headed for the Providence City Hall, stopping along the way at the Subway sandwich shop attached to the skating rink. Here Jo-Ann Gesterling, a fast food worker from Wendy’s, spoke to the crowd. Gesterling has led previous at her store and was arrested last year in Hartford CT during a Fight for $15 protest there. Gesterling talked about the importance of raising the minimum wage to $15, and about the effort to improve working conditions at her restaurant.
The final stop of the march was Providence City Hall, where Malchus Mills of DARE called on Mayor Jorge Elorza to honor his campaign commitments and enforce the First Source ordinance, which prioritizes city hiring from Providence communities. Mills also called upon the City Council to demand fair wages and benefits for workers from companies seeking tax stabilizations from the city. Also speaking at the City Hall was Jeffrey Santos, member of Carpenters Local 94.
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Renaissance room cleaner Santa Brito said Providence residents such as herself are picking up the tax slack for the Procaccianti Group, the Cranston-based multinational real estate holdings firm that bought the property in 2012.
“The City increased the tax rate on my house $427.28 this year,” she said. “I cannot understand why [the hotel] is getting a break on its taxes worth millions of dollars, when I have to pay more in my own taxes. There is something very wrong when the richest corporations are getting breaks and regular Providence residents are paying more, and they’re not even giving good jobs to our city in return.”
The Procaccianti Group, , will pay $284,219.18 in property taxes this year, said City Tax Assessor David Quinn. Without the stabilization, he said, it would owe $1,689,548.18 this year.
Tax stabilization plans, Quinn explained, are utilized to incentivize new development and to smooth tax fluctuations as city properties go through redevelopment.
According to the 2003 act passed by the Council, which you can read here, the Masonic Temple was a state-owned building that provided no tax revenue to the city. It says construction of the building was left unfinished in 1929 and in 2003 was “in a state of great disrepair.”
The act also says the state Economic Development Corporation (now dba as the Commerce Corporation) predicted the hotel would employ “140 people with an estimated payroll of $4 million, plus healthcare benefits.” Earlier this year, hotel workers and labor activists petitioned the Council to terminate the tax break based on the Procaccianti Group’s failure to provide living-wage jobs. The Council did not act on the matter.
“Hopefully they will compromise towards me,” Quinn said. “I’ve already compromised toward them. I have a simple philosophy: if people pay their fair share most people pay less.”
Cranston-based Procaccianti Group owns 3 hotels in Providence, 8 in Rhode Island and a total of 59 in 22 states, according to its website. Its local hotel employees have been fighting for better wages and working conditions for years. Recently they petitioned the City Council to approve a hotel-industry specific minimum wage of $15 an hour.
A Council subcommittee canceled a meeting to consider the proposal last week and has yet to reschedule it. If the Council doesn’t act on the matter, activists could get the issue on the November ballot by collecting 5,000 signatures. The issue has political implications for Mayor Angel Taveras, who is running for governor. He’ll need activist support to overcome Raimondo’s fundraising advantage, and if he wants activist support he’ll need to show progressive leadership.
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