PROVIDENCE, R.I. (WPRI) — The high-rise luxury apartment building planned for Dyer Street in Providence would get more than $54 million in property tax breaks over 20 years, according to newly released projections by the tax assessor.
The Hope Point Tower, often referred to as the Fane tower, would still pay about $69 million in property taxes over the course of their tax stabilization agreement (TSA), compared to $123 million if there was no TSA.
Unlike other TSAs in the city, the tax treaty for the Fane tower is automatically approved and won’t need to be vetted or passed by the City Council.
Aimed at increasing “the pace of economic development,” an ordinance approved in 2015 said the first five projects on the former I-195 land in Providence costing more than $50 million to construct and authorized by the I-195 Redevelopment District commission would automatically get a 20-year TSA.
Other tax treaties have to be approved by the City Council and signed by the mayor. A recent battle over a TSA for a new downtown hotel development nearly scuttled the project, until a majority of councilors forced a vote on the floor and passed the tax treaty.
Patricia Socarras, the press secretary for Mayor Jorge Elorza, said the projections by the tax assessor on the Fane tower are subject to change if the finances of the development change.
Jason Fane, the New York developer who is planning to build the tower, has said the skyscraper will cost $300 million to build. But the application for a TSA relied on a smaller number of $200 million. Fane’s spokesperson said that is the projected dollar figure for the construction costs, while the other $100 million is for land acquisition and other expenses.
The spokesperson, Jim Malachowski, said Fane has not seen the new tax break projections and therefore could not comment on the numbers. But he pointed out that the high-rise wouldn’t be built at all without the tax deal.
“People should be focused on the taxes that will be collected by the city,” Malachowski said. “Without this TSA, the taxes the city would’ve collected would’ve been zero. Because he would not have proposed building here.”
The state has also earmarked up to a $25 million subsidy for the development in the current budget, which was championed by Senate President Dominick Ruggerio.
“I’m furious,” said Sharon Steele, the president of the Jewelry District Association. “Jason Fane does not care one iota about our great city, Providence. He never did. It was always about how much money he could get his hands on, how many dollars in subsidies he could steal from the same folks who gave us 38 Studios.”
Steele, who has opposed the Fane tower in part because of its height and design, said the City Council “tortured” Jim Abdo, the developer of the downtown hotel project, before granting him a TSA. And she said she doubts that Fane’s tower will actually get financed.
“No tower will ever be built there,” Steele said.
The 46-story residential tower would be the tallest building in the city, changing the skyline of Providence. The City Council had to change the zoning of the parcel of land in order to allow for the height.
Steph Machado (email@example.com) covers Providence, politics and more for WPRI 12. Follow her on Twitter and on Facebook