This TSA is one of the first that will generate a guaranteed funding source for the City’s Affordable Housing Trust
At last night’s City Council meeting a majority of the council voted in favor of granting the developer of the property located at 203 Westminster Street a 20-year Tax Stabilization Agreement (TSA) which will be the first since the Council passed the Affordable Housing Trust Fund – that requires the City’s Tax Assessor to deposit 10% of their annual tax contributions to the fund.
The Affordable Housing Trust Fund was passed in July of 2019, and requires 10% of TSAs tax payments to go directly to a fund to help support affordable housing projects across the City. This TSA, by end of its terms, will have generated at least $500K for the Affordable Housing Trust Fund based on estimates provided by the Tax Assessor’s office.
Council President Sabina Matos (Ward 15) stated, “Our City is bustling with new hotels, restaurants, and attractions. Our skyline is rapidly changing. However, some of our most precious historic buildings need a little extra help to get them back online. This building, located directly across the street from City Hall, sticks out as a sore reminder that opportunities to redevelop our most endangered buildings don’t come around often. While there is definitely room for discussion regarding the role and scope of TSA’s, this development meets a specific criteria for me: the condition of the building necessitates it, it would help save one our most storied buildings, and it’d be making a significant contribution towards affordable housing efforts across our city over the course of the agreement.”
The developer of the property located at 203 Westminster Street and the adjacent property, formerly the Providence Journal Building and the former Kresge Department Store, will be turned into a hotel that would create 233 full-time construction jobs, and 154 full-time jobs after the building is completed. The property owner is currently paying over $136K in property taxes per year and by the end of the TSA they will be paying over $516K in property tax per year. Over the twenty years of the agreement, the development will have contributed an additional $3.6 million in tax revenue. This is in addition to sales tax, hotel occupancy tax, and income taxes that will be realized by the completion of this project.
“I have been on record that I am not in favor of 20-year TSAs,” stated City Council Deputy Majority Leader Mary Kay Harris (Ward 11). “I pushed to have the Council pass an ordinance that codified monies from our TSAs be directed to support our neighborhoods, and those that needed the support the most. When I see people without roofs over their heads, or living in fear of losing their home, or can’t afford to fix their homes because they are on a fixed income – how can I in good conscience support such projects? By adding this funding source for affordable housing, it begins to chip away at the hard work that we must accomplish to make equity a reality. This project will deposit an estimated $500K into a fund that will have a direct impact on our community’s and that is why I am standing in support of this project. This will have a direct impact on the residents we represent, and that is worthwhile.”
Senior Deputy Majority Leader Nicholas J. Narducci Jr. (Ward 4) stated, “I have always stood on the side of Unions, and I still do. That said we must look at the bigger picture of economic development for our city and the funding that this project will provide for our Affordable Housing Trust which will have a direct impact on the most vulnerable members of our community. These buildings have stood abandoned and vacant for years. We have a developer that is willing to make a sizeable investment in our City and I believe that we need to support progress, not stand in opposition of it.”
The developers proposed TSA was continued indefinitely by the Committee on Finance, but with a majority of the Council’s support it was discharged from Committee and sent to the full Council for a vote.
“I look at the old ProJo building every day from my office and see its potential,” stated City Council President Pro Tempore Michael Correia (Ward 6). “I believe in order for our City to continue the trajectory we are on we must embrace development, but with an eye on the greater good. We have multiple buildings in our city center that have been abandoned and are rapidly deteriorating and it is creating a negative narrative about our downtown. After so many of us have worked so hard to redevelop this district to become an economic engine and a great place to shop, eat, and live for our residents and visitors alike.”
Through the TSA the developer is also required to use 10% of the construction cost on women and minority owned businesses; they are required to make a good faith effort buy construction materials from Providence based businesses; they must develop a First Source Agreement with the Director of First Source Providence; 100% of hours worked on the project will be performed by trade construction subcontractors who have or are affiliated with an apprenticeship program; and over the term of the TSA will deposit nearly $138K into the Parks and Recreation Trust Fund that goes to support the City’s parks, pools, waterparks, and recreation centers.