Act creates a clear, predictable, and reliable economic development tool backed by private and public stakeholders
PROVIDENCE, RI – Today Councilman David Salvatore and six other councilors, with the support of Mayor Jorge O. Elorza, will introduce a Standardized Property Tax Stabilization Agreement (TSA) Ordinance to the Providence City Council for consideration. The proposed TSA ordinance aims to streamline the process through which businesses receive property tax stabilization incentives and broadens the program to benefit a wider range of small, neighborhood-based businesses throughout the City.
“Creating a standardized TSA program will take the politics out of this economic development incentive and allow for more entrepreneurs throughout our City to benefit. This tool will help us build off of Providence’s strengths and assets to spur economic growth,” said Mayor Jorge Elorza. “By providing a predictable and standardized process, we are making it easier to invest while continuing to change the narrative about doing business in the capital city.”
National trends show that businesses are choosing to locate to urban areas over suburbs. Providence is well-positioned to take advantage of this shift by offering a high quality-of-life and lower cost-of-living than neighboring cities, easy access to large markets with close proximity to Boston and New York, and a competitive advantage in high-growth industry sectors.
“For decades, prudent fiscal controls have been lacking, while the procedure for granting and approving tax stabilization agreements has been an insider’s game,” said Councilman David Salvatore. “This Act embraces new economic development initiatives that are predictable and beneficial to our local economy while protecting taxpayers. The more we continue to grow our city in an ethical manner, the more we all thrive as a community.” He added, “I deeply appreciate the Mayor and his team’s commitment to creating a prosperous local economy, and I look forward to welcoming new businesses.”
The program provides identifiable tools to promote and encourage the construction, rehabilitation, expansion, and use of commercial and residential property in new and expanding businesses.
“Rhode Island Building Trades and Laborers Local Union 271 are in full support of the City’s efforts to standardize, streamline, level the playing field, and ensure responsible contracting policies when it comes to the tax stabilization process,” said President of the Rhode Island Building and Construction Trades Council Mike Sabitoni. “This improved process will undoubtedly encourage construction and bring back much needed jobs to Providence.”
It also provides a predictable tax phase-in plan and a clear procedure by which such TSAs can be obtained. Further, it establishes clear criteria for eligibility for tax stabilization incentives, as well as a defined plan to bring a project to full taxation.
“From an investor’s perspective this is what tax stabilization should look like,” said Dominic Shelzi, Esq., Executive Vice President of the Omni Group, which has realized two projects with the existing administrative program approved by the City Council in 2015. “We are excited that this program provides a fair avenue for everyone across the board who wants to contribute to the economic momentum that Providence is seeing.”
The TSA Ordinance targets both property (i.e. real estate) and tangible (i.e. business equipment) taxes. The property tax stabilization program establishes one set of procedural guidelines while accounting for different variations of projects that can seek the subsidy. The tangible tax stabilization program targets equipment used by businesses that support strategic economic growth areas in Providence, including: Food, Biotechnology, Arts, Robotics, and Life Sciences.
“The Providence Foundation supports the City’s efforts to increase transparency, predictability and efficiency in the tax stabilization process,” said Providence Foundation Executive Director Cliff Wood. “Tax stabilizations are an important economic development incentive that should have a clear and predictable process and be available to developers that meet a set of easily understood criteria.”
All recipients of TSAs under this Ordinance would be required to comply with the City’s existing ordinances and policies pertaining to First Source participation, Minority and Women’s Business Enterprises, and Equal Employment Opportunity. Larger developments with project costs in excess of $3 million must comply with the City’s requirements for the construction apprenticeship utilization program.
Ordinance co-sponsors are councilors Salvatore, Hassett, Jennings, LaFortune, Narducci, Yurdin, and Zurier.