Committee holds off on tax break for downtown hotel


The proposed Hotel Hive would fill the vacant former Providence Journal building and former Kresge Department Store on Westminster Street.

PROVIDENCE, R.I. (WPRI) — In a close vote, the City Council Finance Committee on Tuesday indefinitely postponed taking action on the proposal to give a 20-year tax treaty to the Hotel Hive.

The vote was 3 to 2 to hold off on giving $2.7 million in tax breaks over two decades to Washington-based developer Jim Abdo.

Labor union members opposed to the project who were in attendance cheered and applauded after the vote.

Even with the tax breaks, the city still would have received about $5.7 million in property taxes over the 20 years from the hotel, according to updated numbers from the city provided at the meeting. Full taxation of the proposed hotel, without a TSA, is estimated at $8.4 million over 20 years.

Abdo has already purchased the two vacant downtown buildings — the old Providence Journal building at 203 Westminster and the adjacent former Kresge department store building — which would be combined to create the microloft-style hotel.

Abdo previously told the committee he could not “economically justify” the project without the tax treaty.

The $39 million project has separately been awarded $6 million in tax increment financing from the state, a tax break it would only receive if the hotel generates expected tax revenue.

Councilwoman Jo-Ann Ryan said earlier this month she is “not convinced” that Abdo needs the city tax deal to finance his project.

But the Providence Preservation Society sent a letter to the committee in support of the project, which would revitalize long-vacant buildings that have fallen into disrepair and are often tagged with graffiti.

“These two buildings are eyesores in the core of downtown,” Brent Runyon, the preservation group’s executive director, wrote in the letter. “They drive down the sense of positivity.”

Multiple labor unions testified against the proposal at a prior meeting, arguing that in exchange for the TSA the developer should abide by wage requirements for workers.

The Providence Democratic Socialists also opposed the project, handing out a flyer that read: “Jim Abdo is building a hotel, and he wants YOU to pay for it.”

In addition to the hotel rooms and extended stay lofts, Abdo proposed having a rooftop bar, pizza joint and co-working space in the hotel.

Steph Machado ( covers Providence, politics and more for WPRI 12. Follow her on Twitter and on Facebook

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