Several weeks ago, I stood with my colleagues in government as plans were announced to redevelop Providence’s iconic Superman building (111 Westminster St.). I called the $220 million project an excellent example of a public-private partnership that will truly benefit the people of our capital city, our state, and all who come to visit. This iconic but sadly dormant and dark building will become fully functional and revitalize downtown with 285 residential apartments, 57 of which will be affordable units, occupied by hundreds of residents who will undoubtedly eat, drink, and shop locally.
The city’s contribution to this project includes a $10 million low-interest loan from the Housing Trust (through the Providence Redevelopment Agency), $5 million in a direct city contribution, and a long-term tax stabilization agreement (TSA).
Let’s talk about TSAs.
As a city councilor for 25 years, I’ve helped negotiate dozens of tax stabilization agreements throughout the city, including one of the most significant tax treaties involving the Providence Place Mall in the late 1990s. Currently, 45 City Council-initiated TSAs exist across the city, held by popular hotels, arts groups, and corporations. Why? Because they work for both government and investors. Tax stabilization is a tool that turns empty lots and boarded-up buildings into new mixed-use spaces, businesses, and apartments. TSAs spark economic growth allowing developers and municipalities to forecast predictable taxes for five to 20 years. A TSA for the Superman building will need General Assembly approval for 30 years.
Some armchair critics called the deal a handout to a millionaire or corporate welfare. Many forget the mall was a dusty patch of dirt adjacent to rail yards before shovels hit the ground. The expansive development around the mall became a catalyst for change in downtown Providence and contributed to the city’s first renaissance. Much of what you see and enjoy today, from Waterplace Park to WaterFire, corporate headquarters, historic buildings converted to housing, restaurants, and a newly constructed train station, are the direct result of effective TSAs and tax treaties.
High Rock Development, the owner of 111 Westminster St., presently pays $519,664 in taxes to the city of Providence for an empty shell of a building. Should city leaders continue to collect those taxes and keep the status quo? Or should we strike a well-structured deal that involves higher contributions to the city’s tax rolls and ignites new development around downtown? I believe the latter is a more responsible path.
It has been said that the Providence City Council should hold High Rock accountable when negotiating a new tax stabilization agreement. I prefer to work together and develop a sustainable, pragmatic agreement that benefits both the property owner and the people of Providence. Like the mall, the blighted Superman building has the potential to spur economic growth and construction jobs downtown. In my opinion, tax treaties are not handouts; the city is encouraging investment and creating new opportunities for decades to come.
John Igliozzi (Ward 7) is President of the Providence City Council.