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Dominion lawyer says $150,000 tax stabilization reduction is actually an increase



The Providence City Council Finance Committee met Monday evening to hear testimony of the alteration of a tax stabilization agreement between the City of Providence and Dominion, the energy company that owns the Manchester Street Power Station. Only two members of the Finance Committee were in attendance, Councilmembers John Igliozzi and Jo-Ann Ryan. Councilmembers Terrence Hassett, Sabina Matos and Carmen Castillo did not attend.

The changes to the TSA being sought by Dominion is the product of negotiations between Mayor Jorge Elorza‘s office and Dominion, said Councilmember Iggliozzi to me.

In 2017, Dominion entered into a TSA that saved the company $4 million. As part of that agreement, Providence was to be be able to negotiate for rights to a small strip of land connecting to Collier Park. The original TSA stated that if Providence and Dominion could not come to an agreement regarding the strip of land connecting to Collier Park, Dominion would owe Providence an additional $300,000.

The purpose of the TSA to be discussed Monday night is to “to memorialize a further modification to the TSA which provides for the following:

  1. a revision to the Tax Stabilization Plan to provide for an additional payment of $150,000.00; and
  2. the removal of the agreements relative to the transfer of the use of Collier Park from Dominion to the City.”

In other words, Providence is giving Dominion a $150,000 break on the money it owes. And Providence will not be getting that “small strip of land connecting to Collier Park.”

But, said Attorney Edward Pare, representing Dominion, the assessment I provided above is not quite right. I quote Pare in full below because what he says is complicated, and perhaps intentionally confusing.

“This is not a tax break for Dominion,” said Pare. “Dominion entered into a tax stabilization agreement back in 2016, got the council’s approval in 2017…

“Part of that consideration was that the city was interested in acquiring some sort of interest whether it was lease holder interest or an ownership interest in Collier Park. Since the tax stabilization agreement has been in place we have discussed with the City the regulatory requirements and costs of making that transfer of Collier Park for the City’s use. The City and Dominion both agreed that it was not mutually beneficial. The costs incurred would outweigh the benefits.

“Collier Park is and will be open to the public pursuant to the DEM requirements. The part of maintaining Collier Park open, at least through sunset, today.

“This agreement basically changes the credit which Dominion would have received of the additional $300,000 if in fact Collier Park was transferred, to the City.

“In discussion with the City we negotiated an agreement where we, Dominion, agreed to forego one half of the tax credit that it would avail itself to. The City agreed that it would likewise settle the matter so that the $300,000 was determined to settle for $150,000. We agreed to make that payment of $100,000 during fiscal year 2019 and the final payment where our tax stabilization agreement expires in the fiscal year 2020, we would pay $50,000.

“So as I said, this is not a increase or benefit to Collier Park or to Dominion. In fact, Dominion will be paying the City an additional $150,000, pursuant to this modification.”

Iggliozzi asked about the environmental status of Collier Park.

“Well, that’s part of the problem,” continued Pare. “There are some environment issues. There are water cleaners. There are DEM requirements. The parcel that abuts the park. Trying to separate the part that is just this strip of land along the river is difficult, you have to do surveys. Dominion is responsible for maintaining the environmental issues on its parcel. Trying to split that out is what became very difficult and very expensive and outweighed the benefits of the transfer.

“Initially the City thought it might be worthwhile, that they obtain some kind of interest in the Park. It didn’t come to play and so we settled, with Dominion paying the extra $150,000. Dominion will retain the environmental interests of the property.”

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Several members of the public, including me, spoke at the hearing. The issues were many. Valentina Adamova asked why the City, which is hurting economically, would be willing to give up $150,000. The high asthma rates in the city, which the Manchester Street Power Station contributes to, were mentioned. The idea of subsidizing fracked gas in the age of catastrophic climate change was questioned.

One big issue that was brought up implicitly, if not explicitly, is that this agreement was made before it was known that Dominion was putting the Manchester Street Power Station up for sale, along with another power plant located in Pennsylvania, for $1.5 billion. The City Council should consider that one reason Dominion wants to settle is because they need to have no outstanding issues associated with the property that might complicate a potential sale.

Here’s Greg Gerritt:

Justin Boyan from Climate Action Rhode Island:

Valentina Adamova:

Aaron Jaehnig, from the Sierra Club:

Andrew Poyant:

Me. My intention in testifying was to put certain questions that I felt were unanswered and not clear, on the record.

“I think we conflated two issues,” said Attorney Pare, seeking to clarify the misperceptions of the public. “The $300,000 additional payment would be given from Dominion is tendered the Collier Park property to the City. Dominion is ready, willing and able to do that. Right now environmental issues would flow with that transfer. What we discussed with the City is doing a little lease so that Dominion could in fact retain the environmental issues on the abutting parcel…

“So what Dominion has agreed to do is to pay the additional $150,000, foregoing the $300,000 credit, but we are ready, willing and able to do so,” continued Pare.

“When the agreement was put together, the City and Dominion split the costs of transferring Collier Park. It’s going to be expensive, time consuming, but doable. So we sat with the City and talked to them about solutions. They did not have the ongoing issue in receiving Collier Park for whatever reason they were contemplating. They decided they would forego Collier Park so we agreed to pin it with the additional $150,000.

“Dominion doesn’t owe the City anything further if in fact it tenders Collier Park. It didn’t want the record to be left open that there’s some sort of environmental issue where Collier Park cannot be transferred. It can be, but it will take lots of survey work, lots of expense, which the City will have to share with us in that transfer.

“The City and Dominion both thought it was wise to settle the matter with an additional $150,000.”

Me again.

Kendra Anderson:

There was no vote taken by the Finance Committee at the meeting.

See also: City Council hears opposition to Dominion agreement by Madeleine List

Previously on Uprise RI:

The Providence City Council wants to give Manchester Street Power Station a $150,000 tax break

Providence City Council incentivizing the continued use and expansion of fossil fuels with Dominion tax deal

Report: Manchester Street Power Station for sale by owner

John Igliozzi

Jo-Ann Ryan

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About the Author

Steve Ahlquist is Uprise RI's co-founder and lead reporter. He has covered human rights, social justice, progressive politics and environmental news for nearly a decade.