20-year, $18 million tax break for luxury downtown apartments under fire ahead of Providence City Council vote

The Providence City Council is planning to decide on the fate of an $18 million, 20-year Tax Stabilization Agreement (TSA) for Steeple Street RI LLC, a luxury housing developer, local opposition is building. Sponsored by Providence City Councilmember and Finance Committee Chair John Igliozzi (Ward 7), the 11-story project would add hundreds of high-end downtown apartments to be located at 131 Canal Street and 3-9 Steeple Street. (See here, starting at page 15.)

The Council will be voting on this TSA at the Providence City Hall tonight at 7pm.

Community groups are asking that the TSA be sent back to committee.

“The TSA for Steeple Street RI, LLC demands more concerted input from residents who will be disproportionately impacted by the loss of public revenue, which is desperately needed to repair roadways and schools, fund recreational programs and the city’s many waning public amenities, as well as support new initiatives shepherded by those who currently live, work, and raise their families in the so-called ‘Creative Capitol,’” writes Direct Action for Rights and Equality (DARE) in a letter to the Providence City Council today.

The DARE letter notes the “extreme length” of a 20-year TSA, asking. “Why would this much time be necessary for the developers to realize sufficient profit to pay their fair share of taxes? If the development isn’t presumed to be profitable enough to cover property taxes for 20 years, perhaps it isn’t a wise investment for the residents of Providence.”

The DARE letter is co-signed by Teresa Guaba, Neighbors for Revitalization; Providence City Councilmember Mary Kay Harris (Ward 11); City Councilor-Elect Kat Kerwin (Ward 12); City Councilor Elect Rachel Miller (Ward 13); Carpenters Local Union 330; Dannie Ritchie, MD, MPH, Founder, Community Health Innovations of Rhode Island and Dwayne Keys, Providence Resident and Proprietor, D Key Solution.

“When the taxpayers of Providence subsidize a construction project, it should benefit the Providence workforce, which must include women, people of color and veterans,” said Benjamin Branchaud of Carpenters Local 330. “Tax credits should also never finance construction companies that do not pay their workers or surprise them with a 1099 form at the end of the year. The amendments to this TSA and future TSAs that DARE has submitted address both of these issues and more. We are in full support.”

“The Steeple Street property would impact my community in a real way as it sits in Ward 12. I am concerned that if we continue to allow developments like this one to evade the taxes our city needs to deliver fundamental services we are doing our communities a huge disservice,”  said Kat Kerwin, City Councilor-Elect Ward 12.

The amendments to the TSA submitted by DARE are designed to make the project “broadly beneficial to the residents of Providence” include:

  • Real affordable housing – By that, we mean housing that is affordable to the people who live in the neighborhoods of Providence. Affordable housing is often defined as housing that costs no more than 30 percent of a household’s monthly income. When we have thousands of families in Providence living on less than $20,000 per year, we must ensure there is sufficient housing that only costs 30 percent of their monthly income! By contrast, developers and the City use the “Providence Metro Statistical Area” median income of $50,000/year, based on figures that use much of the state of Rhode Island, and parts of Massachusetts. Therefore, their “affordable” housing is well out of reach of the majority of Providence residents!
  • Inclusionary zoning laws, which mandate a percentage of residential units built in any development receiving public subsidies be affordable to low-moderate income residents, can ensure that low-income families benefit from what is often luxury housing and commercial development. In addition, linkage fees can be charged per square foot of development and designated to a housing trust fund, designated for construction, rehabilitation, and operation of housing affordable to low-income residents. Both of these practices are successfully implemented as nearby as Boston, as well as many other cities around the country. In fact, the City of Providence already includes linkage fees that are directed to Parks and Recreation for many of the more recent TSAs!
  • Local Hiring– through effective enforcement of the First Source ordinance, including current TSAs that are not in compliance, the removal of barriers to employment for city residents with criminal records, and the implementation of hiring rules that target disadvantaged census tracts in the city, any public subsidy of private development will create family-sustaining, long-term jobs for current Providence residents.
  • A commitment to the utilization of Responsible Contractors, including contractors that have not been found to have committed wage theft or employee misclassification in the past five years (either by settlement or by adjudication), contractors who have not been the subject of repeated, serious OSHA violations, contractors that employ bona fide apprenticeship programs which have the opportunity to turn a one time job into a life time career, and residency and diversity requirements as follows: each contractor shall demonstrably perform 15 percent of work hours by Providence residents, 20 percent by people of color, 7 percent by women and 5 percent by veterans.

In separate email, Rhode Island Jobs with Justice (JWJ) writes, “It is extremely disappointing the Council is not working to find solutions for people in need of affordable and low-income housing but instead is doubling down on tax breaks for the rich.

“It is outrageous that such an extremely long and large subsidy would be offered for 15 stories of single occupancy, one bedroom and efficiency apartments that do nothing to support the working families of Providence,” continues JWJ. “The dollar amount and the length, attached to this TSA, go above and beyond the usual Tax Stabilization Agreements the city has already failed at providing oversight for. We need to be demanding the use of responsible contractors with values that recognize the importance of permanent jobs and living wages for the hardworking individuals in our communities. No more TSA’s until the deals contain guarantees that developments subsidized with our tax dollars support neighborhood residents.”


To contact your City Council Member about this proposal:

Seth Yurdin (Ward 1)
401-484-7207
ward1@providenceri.com
Twitter: @SethYurdin

Samuel Zurier (Ward 2)
401-861-6313
Ward2@providenceri.com

Nirva LaFortune (Ward 3)
Ward3@providenceri.com

Nicholas Narducci Jr (Ward 4)
401-497-1430
Ward4@providenceri.com
Facebook page: https://www.facebook.com/Nicholas.Narducci.Jr/

Jo-Ann Ryan (Ward 5)
401-595-8604, 401-464-2046
Ward5@providenceri.com
Facebook page: https://www.facebook.com/Ward5Providence/
Twitter: @JoannRyanPVD5

Michael Correia (Ward 6)
401-603-6723
Ward6@providenceri.com

John Igliozzi (Ward 7)
401-351-9802
Ward7@providenceri.com

Wilbur Jennings Jr (Ward 8)
401-595-9216 (probably best number), 401-461-3617
Ward8@providenceri.com

Carmen Castillo (Ward 9)
401-226-4678
Ward9@providenceri.com
Facebook page: https://www.facebook.com/Ward9CityCouncil/

Luis Aponte (Ward 10)
401-781-6861
Ward10@providenceri.com

Mary Kay Harris (Ward 11)
401-481-8268
Ward11@providenceri.com

Terrence Hassett (Ward 12)
401-454-0644
Ward12@providenceri.com

Bryan Principe (Ward 13)
401-486-2488
Ward13@providenceri.com
Facebook page: https://www.facebook.com/Bryan-Principe-for-City-Council

Council President David Salvatore (Ward 14)
(401) 330-6526 and (401) 484-8375
Ward14@providenceri.com
Facebook page: https://www.facebook.com/DavidASalvatore/
Twitter: @DavidASalvatore

Sabina Matos (Ward 15)
401-383-3814
Ward15@providenceri.com
Twitter: @Sabina_Matos


Here’s the full letter from DARE:

Dear President Salvatore and Members of the Council

We are community organizations with memberships based in Providence’s low-income communities of color in partnership with advocates and newly elected city officials. For over a decade we have demanded equity in our city’s economic development policies. Yet Providence continues to promote public subsidy in private developments that both threaten to displace long-term neighborhood residents and take resources away from our communities without tangible and lasting community benefits.

Given the dramatic shortage of genuinely affordable housing in our city, as well as life-sustaining jobs, especially for Providence’s low-income families living in communities of color, we’re asking you to return the proposed TSA for Steeple Street RI, LLC to the Finance Committee for further review. Though this letter focuses on one specific TSA, the criticisms and recommendations below apply to past and current TSAs agreed to by the Providence city council, as well as future deals.

The TSA for Steeple Street RI, LLC demands more concerted input from residents who will be disproportionately impacted by the loss of public revenue, which is desperately needed to repair roadways and schools, fund recreational programs and the city’s many waning public amenities, as well as support new initiatives shepherded by those who currently live, work, and raise their families in the so-called “Creative Capitol.”

Though the second vote for a Tax Stabilization Agreement (TSA) for Steeple Street RI, LLC was postponed, the initial vote in favor is very concerning. A major cause of concern with this particular agreement is its extreme length – 20 years of foregone property tax revenue! Why would this much time be necessary for the developers to realize sufficient profit to pay their fair share of taxes? If the development isn’t presumed to be profitable enough to cover property taxes for 20 years, perhaps it isn’t a wise investment for the residents of Providence.

We have a number of amendments to this agreement that would make it broadly beneficial to the residents of Providence this council represents:

Real affordable housing – By that, we mean housing that is affordable to the people who live in the neighborhoods of Providence. Affordable housing is often defined as housing that costs no more than 30% of a household’s monthly income. When we have thousands of families in Providence living on less than $20,000 per year, we must ensure there is sufficient housing that only costs 30% of their monthly income! By contrast, developers and the City use the “Providence Metro Statistical Area” median income of $50,000/year, based on figures that use much of the state of Rhode Island, and parts of Massachusetts. Therefore, their “affordable” housing is well out of reach of the majority of Providence residents!

Inclusionary zoning laws, which mandate a percentage of residential units built in any development receiving public subsidies be affordable to low-moderate income residents, can ensure that low-income families benefit from what is often luxury housing and commercial development. In addition, linkage fees can be charged per square foot of development and designated to a housing trust fund, designated for construction, rehabilitation, and operation of housing affordable to low-income residents. Both of these practices are successfully implemented as nearby as Boston, as well as many other cities around the country. In fact, the City of Providence already includes linkage fees that are directed to Parks and Recreation for many of the more recent TSAs!

Local Hiring– through effective enforcement of the First Source ordinance, including current TSAs that are not in compliance, the removal of barriers to employment for city residents with criminal records, and the implementation of hiring rules that target disadvantaged census tracts in the city, any public subsidy of private development will create family-sustaining, long-term jobs for current Providence residents.

A commitment to the utilization of Responsible Contractors, including contractors that have not been found to have committed wage theft or employee misclassification in the past five years (either by settlement or by adjudication), contractors who have not been the subject of repeated, serious OSHA violations, contractors that employ bona fide apprenticeship programs which have the opportunity to turn a one time job into a life time career, and residency and diversity requirements as follows: each contractor shall demonstrably perform 15% of workhours by Providence residents, 20% by people of color, 7% by women and 5% by veterans.

We look forward to discussing our proposed amendments with you through the public input process at the Finance Committee as well as meetings with our city council members.

Sincerely,

DARE (Direct Action for Rights and Equality)

Teresa Guaba, Neighbors for Revitalization

Councilwoman Mary Kay Harris, Ward 11

City Councilor-Elect Ward 12 Kat Kerwin

City Councilor Elect Ward 13 Rachel Miller

Carpenters Local Union 330

Dannie Ritchie, MD, MPH, Founder, Community Health Innovations of Rhode Island

Dwayne Keys, Providence Resident and Proprietor, D Key Solution


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About Steve Ahlquist 669 Articles
Steve Ahlquist is a frontline reporter in Rhode Island. He has covered human rights, social justice, progressive politics and environmental news for half a decade. Uprise RI is his new project, and he's doing all he can to make it essential reading. atomicsteve@gmail.com

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