PROVIDENCE — A judge will issue a decision later this month as to whether the Providence City Council can intercede in a lawsuit that led wealthy downtown developer Arnold “Buff” Chace Jr. to get tax breaks worth millions of dollars for 10 of his downtown properties.
The hearing in Superior Court Friday before Associate Justice Joseph McBurney was the second this week in the council’s efforts to intervene in the previously-settled three-year-old lawsuit. On Wednesday, the council’s outside attorney, Max Wistow, accused the administration of former mayor Jorge Elorza of undergoing a “corrupt transaction” when it agreed to the tax breaks for Chace and his firm, Cornish Associates.
On Friday, Chace’s lawyer Nick Hemond blasted Wistow for “baseless and reckless attacks” against the Providence city solicitor, in the latest chapter of an ongoing saga that has now spanned two mayors and three council presidents.
“I have never interacted with a more diligent, a more honest, a more professional, a more ethical public servant, a person beyond reproach, than I have with the city of Providence’s City Solicitor Jeff Dana,” Hemond said. “What has taken place before this court without any level of sufficient evidence or good-faith basis to accuse him of fraud, of malfeasance ... is an outrageous thing to do.”
Hemond and Dana represent opposite sides of the underlying lawsuit filed by Chace’s properties against the city in 2020, which was settled in 2021. But the two sides were united in their opposition to the City Council’s motion to intervene in the case.
Wistow has repeatedly accused Dana and other officials from the Elorza administration of “corruption,” “fraud” and a “shell game” as they negotiated what he calls a “back room deal” with Chace. Dana, who declined to comment, is still the city solicitor under Mayor Brett Smiley, and he also typically represents the City Council.
After nearly 5 hours of arguments Wednesday and Friday, McBurney said he plans to announce his decision from the bench on Nov. 27. If he grants the motion to intervene, the council is expected to then file a motion to vacate the case, overturning the tax breaks that are estimated to be worth $42 million over 30 years.
Arguing against the motion to intervene on Friday, assistant city solicitor Etie-Lee Schaubsaid the council had waited too long to try and intervene in the 2020 case.
“If they believed they had a right, if they believed they had an interest, but chose — either strategically or for other reasons — not to act, that is a choice any and every litigant can make,” Schaub said.
In court documents, Hemond said that former council presidents Sabina Matos and John Igliozzi both knew about the city’s discussions with Chace at the time they were happening, even though the agreement never came before the council.
Igliozzi declined to comment earlier this week on what he did or did not know, citing the ongoing court case.
Matos, who is now lieutenant governor, said through a spokesperson that she was “not involved in the development of the consent agreement” that settled the lawsuit, and “does not recall being provided a draft of the agreement while she was council president.”
The case was settled during Igliozzi’s tenure as president. After councilors started to find out about the consent agreement, no investigations or legal action was initiated by the council during the term that wrapped up at the end of 2022.
The newly-elected council, which took office in 2023 and is led by Council President Rachel Miller, voted in July to hire Wistow to take legal action against the tax breaks.
“They had their bite at the apple,” Hemond said, arguing that the judge should not grant the motion just because new politicians took over in City Hall.
Hemond and Schaub also both argued that the council does not have standing to intervene in a case in which the city of Providence is the defendant.
“They have no more standing in this case than the Department of Parks Commissioners,” Hemond said.
The tax breaks in question allow Chace and Cornish Associates to pay a lower effective tax rate on 10 commercial properties in exchange for restricting 25 percent of the apartments to tenants who make less than 100 percent of the area median income, which is currently $74,200 for a single-person household. (The agreement does not require Chace to charge affordable rents.)
The deal relies on a state law known as “8-Law” meant for “low-income housing,” which allows properties to pay 8 percent of their gross rental income, rather than the usual tax rate.
Councilors have been outraged that the 8-law treatment applies to the entirety of the 10 buildings, including commercial space and apartments that are not income-restricted. The council estimates Chace will save $42 million over 30 years, though the city tax assessor says the exact number is hard to pin down because property values and tax rates will change over those 30 years.
Chace has declined interviews thus far, but his spokesperson Patti Doyle said earlier this week that the council’s efforts could have a “chilling effect” on future efforts to develop workforce housing.
Smiley has said he doesn’t like the agreement Elorza struck with Chace, and was trying to renegotiate it before the council decided to take legal action.
Asked if he was alarmed by the corruption allegations against Dana in an interview on WPRI-12 earlier this week, Smiley said: “It would alarm me if it’s true, but it’s not.”
Steph Machado can be reached at steph.machado@globe.com. Follow her @StephMachado.