PROVIDENCE, R.I. (WPRI) – While many in Providence are still reeling from a revaluation that resulted in soaring tax bills, dozens of business owners aren’t feeling the same effects.
That’s because they have tax deals with the city, known officially as tax-stabilization agreements, or TSAs. More than 100 properties currently have a TSA, locking in their tax bills for anywhere from two-and-a-half to 20 years.
Collectively they are receiving a massive tax break, worth about $12 million this year, according to an analysis of Providence tax data by Target 12.
A comparison of the tax deals against the city’s 2019 tax rolls shows shows the property owners with TSAs are slated to pay $10.7 million this year on $630 million worth of property.
That works out to a collective tax rate of about $16.69 per $1,000 of assessed value, which is less than half the regular commercial tax rate of $36.70 per $1,000 paid by business owners without TSAs.
The deals are given to business owners who promise to either build or renovate properties and create jobs in the process. In exchange, the city gives them tax breaks, under certain conditions, providing predictability and stability no matter how the real estate market fluctuates.
The city banks on collecting a higher tax amount once the deals end and the improved properties are assessed at a much higher amount. It also points to the added benefit of job creation and city-based investment.
INTERACTIVE MAP: TSA deals in Providence
Click on the building icons in the map below to learn more about the properties, the owners and how much they’re paying to the city.
The city does not count the tax breaks received by two major properties as TSAs: the Providence Place mall and the Manchester Street Power Station.
The owners of the two properties struck separate deals with the city in 1995 and 2018, respectively.
Providence Place this year will pay $300,000 on property assessed at $683 million; it would owe roughly $25 million at the standard tax rate. The power station, meanwhile, will pay nearly $8 million on property assessed at $271 million, about $2 million less than under the standard rate.
TSAs have been a popular tool under Democratic Providence Mayor Jorge Elorza, with nearly 50 deals approved since he took office in 2015.
The agreements made during that period range from a 10-year agreement with the cement company McInnis USA to various deals for vacant properties owned by hospital group CharterCare, which runs Roger Williams Medical Center.
“TSAs have been a powerful economic tool for the city supporting the local economy and catalyzing development, employment and revenue growth,” said Elorza spokesperson Victor Morente. The policy “has yielded increased property values, construction value and local spending and has made Providence more competitive with neighboring municipalities,” he said.
Ted Nesi contributed to this report.