PROVIDENCE, R.I. (WPRI) — After missing several deadlines, developer Jason Fane has filed an application for a tax stabilization agreement for his proposed 46-story residential skyscraper in Providence.
The application assumes the building would be built by 2023, and asks for 20 years of tax stabilization.
Tax stabilization agreements, known as TSAs, provide incremental tax breaks to developers over a period of time, as an incentive to build projects that are expected to bring economic development and tax revenue to the city.
The project, commonly known as the Fane Tower but actually named the Hope Point Tower, would be built on the former I-195 land on Dyer Street, and has received backlash from those who disapprove of its design and height. The Providence City Council had to raise the allowed height of the parcel of land — overriding a veto by Major Jorge Elorza — to allow the tower project to move forward.
The application includes a nonrefundable fee of $205,575, which Fane spokesperson Jim Malachowski said “shows Mr. Fane’s intent to build this project.”
But the application fee, which is based on the cost of the project, is less than the $300,000 that was expected for the estimated $300 million project. Malachowski argued that’s because the construction costs are actually estimated at closer to $200 million; the other $100 million in project costs is for expenses such as land acquisition, legal fees and insurance.
The city’s TSA ordinance says the the fee should be based on the “estimated cost of the project.”
The application also sheds light on how much money Fane expects to make on the project; by the year 2043, Fane estimates an annual gross revenue of $45 million, with a net revenue of $25 million after operating expenses.
The tower of about 500 luxury apartments plus ground-floor retail would take about two-and-a-half years to build, Fane told Target 12 in September, but he expressed frustration at the regulatory process.
“Until they approve it, I’m not building it,” Fane said. “There has been delay after delay.”
In this case, the delay was Fane’s; the original deadline for the TSA application was June 30. Robert Davis, the chairman of the I-195 Commission, warned Fane in a letter in October that the commission would not extend it again past Dec. 1, which is this Sunday.
The application is being filed at a time when the City Council is considering changes to TSA policy to include more requirements on developers who receive the tax breaks. The council is currently scrutinizing a tax treaty proposal for a downtown hotel, and last week approved deals for an industrial building at ProvPort and an apartment building on Washington Street.
“I think going forward after these two tonight, we really need to look at the TSAs,” Councilman James Taylor said at last Thursday’s council meeting. He said the city had done 70 TSAs since 2001, including the two approved at that meeting.
“We need to get a report on whether these TSAs are in compliance,” Taylor said. “And if they’re not in compliance, who’s enforcing them?”
The General Assembly has also authorized the R.I. Commerce Corp. to provide up to $25 million in state tax credits for the Fane Tower.
Eli Sherman contributed to this report.