The Providence Tax Stabilization Investment Act creates a streamlined and transparent process to incentivize development and further grow Providence’s tax base
PROVIDENCE, RI (September 17, 2020)…Providence City Council President Sabina Matos (Ward 15), along with a majority of her Council Colleagues including President Pro Tem Michael Correia (Ward 6), Majority Leader Jo-Ann Ryan (Ward 5), Senior Deputy Majority Leader Nicholas J. Narducci Jr. (Ward 4), Deputy Majority Leader Mary Kay Harris (Ward 12), and Councilors Carmen Castillo (Ward 9), Councilman David Salvatore (Ward 14), Nirva LaFortune (Ward 3), Helen Anthony (Ward 2), Katherine Kerwin (Ward 12), Rachel Miller (Ward 13), James E. Taylor (Ward 8), Councilman Pedro Espinal (Ward 10) and John Goncalves (Ward 1) tonight introduced an ordinance entitled the Providence Tax Stabilization Investment Act.
The Providence Tax Stabilization Investment Act (The Act) would standardize the processes for all future Tax Stabilization Agreements (TSAs) in the City of Providence by increasing transparency, simplifying and streamlining the application process, and clearly defining the requirements that all developers must abide by should they wish to obtain a stabilization agreement with the City. The proposed legislation will create a tax stabilization system that not only protects our City’s financial interests but also incentivizes new development.
Council President Sabina Matos stated, “Over the past several years, my colleagues and I have grown increasingly frustrated with the existing TSA process as it has resulted in confusion for developers and Providence residents alike. This legislation sets clear expectations to developers from the get go and codifies them all in one section under our Code of Ordinances. By providing clear expectations and terms from the onset of an application for a tax stabilization agreement, the Council can better monitor and enforce the terms of the agreement that are meant to empower the communities that work and live in Providence. Furthermore, by streamlining this process developers will find it easier to move here, create more good-paying jobs, and grow our tax base.”
The Act is intended to balance economic development with responsible employment practices in order to increase the city’s tax base while revitalizing our existing communities. In order to advance this mission, it is vital that the city provide developers, entrepreneurs, and investors with a predictable TSA process which clearly defines both the procedure to obtain a TSA as well as the requirements that will be imposed should a property be granted such an agreement.
“I am very proud of the work we have done to create a crystal clear and reliable process that incentivizes development and defines community benefits,” stated City Councilor Rachel Miller. “When Providence forgoes tax dollars to support development, we should be able to trace the positive impact of that investment in our communities and to city residents. At the same time, developers should be able to rely on a predictable process. The Act is a tremendous step in both directions. The ordinance is the result of an intensive collaborative process between the Council, Council staff, the Solicitor’s Office, and the City’s Planning Department, and I look forward to a rigorous discussion of its merits with my colleagues and with city residents.”
About the Providence Tax Stabilization Investment Act:
The Act will tie the length of TSAs to the amount of investment being made in the City of Providence, and it will standardize the process by which TSAs are reviewed and approved. This includes citywide departmental review before reaching the Council, as well as a clearly defined list of documentation that a developer must provide at the outset of the application.
In addition to procedural changes, the proposed legislation condenses a number of existing requirements on TSAs into one section of the Providence Code of Ordinances to eliminate confusion. These requirements include the criteria all developers will be held to if they want a TSA, such as hiring Minority and Women Business Enterprises, paying prevailing wage during construction, and defining specific reporting timelines to ensure compliance. There are also specific designations for the taxes generated from stabilized properties, which includes 1% of all taxes for First Source, 10% for the Affordable Housing Trust Fund, and 7% for the Parks and Recreation Trust Fund. While these designations have been designated by ordinance in the past, the new legislation places them directly in the section of the Ordinances governing TSAs in order to eliminate any uncertainty regarding where TSA taxes must go.
Finally, the Act establishes a very specific notice and cure provision in order to increase the enforcement capabilities of the Council so that they can exercise greater control over compliance with all of the terms and conditions of each TSA.