Treaty could help bring major development to Division Street

Treaty could help bring major development to Division Street

PAWTUCKET - A riverfront property that formerly housed a Tire Pro store and then an auto repair shop could get new life as a women's care facility affiliated with Women & Infants Hospital.

Dr. Pablo Rodriguez is proposing a $4.6 million project, including the $480,000 purchase price, to build a new medical office building he says would bring more than 70 new jobs to the city. The building would also contain a Performance Physical Therapy center.

Partners in the Rioview Group LLC, formed to purchase this property near the Pawtucket River Bridge on July 13, are seeking a seven-year phase-in of property taxes for a property that will have a value when completed of $2.35 million and a total tax bill of $72,568, according to Tax Assessor Robert Burns.

With a base tax of $20,399 already in place, the new tax amount would represent a jump of $52,168 in property taxes by the end of the seven years. According to Rodriguez, year one of the phase-in, following substantial completion of the project in December 2014, would bring a property tax bill of $27,000, and that amount would jump another $7,000 a year for the next six years.

The Rioview Group needs the tax treaty as part of the incentive for both tenants to move to the 18,500-square-foot property, according to Rodriguez. "...Predictable property taxes in the early years will allow them to cover the cost of the construction, improvements, furniture and equipment that will be required in moving to this new location," he wrote in a memo to city officials.

The Pawtucket City Council Finance Committee, led by Chairman John Barry, will consider the tax stabilization agreement for the Division Street property at its meeting Wednesday evening, Sept. 25.

Barry said on Monday said he has no problem with the medical facility as proposed, calling it a "fine" proposal, but said he thinks a tax treaty that would mean only a $7,000 bump in property taxes the first year is "a little generous."

"I don't think we want to go seven years on it," he said.

The Rioview Group is certainly investing a lot of money in the riverfront property, but the center will also "start making money the day it opens," said Barry.

"It looks nice and would be an asset, but I don't know that we have to roll over and play dead," he said.

The councilman, whose District 4 contains 21 Division St., said he would have preferred to see city officials purchase the property themselves and develop that parcel and the old "Division Street Hotel" property next door "as one piece." He's "going along with" the plan for 21 Division St., said Barry, but would have preferred to develop "something great" on both properties instead of giving the Rioview Group a portion of the 45 Division St. property for added parking.

City planners say they're preparing to issue a request for proposals on the former hotel property as well.

From what he's been led to believe, a modification of the current tax treaty being proposed by Mayor Donald Grebien's administration would not be a deal-breaker in getting the development done, said Barry.

Grebien, in a letter to the finance committee, asks members to support a proposal he said his administration has worked hard to bring to the riverfront. The tax deal is a fair one that protects the city's financial interests and gives the Rioview Group the foundation to get additional financing for the project, said Grebien.

"I believe that this proposal strikes that necessary balance and will bring about a major reinvestment in our city that would otherwise be significantly less likely to occur," he wrote.

According to Grebien, a treaty for the medical center "will begin the long awaited redevelopment" of the city's riverfront area.

"To continue our progress on the road to a sustainable financial future will require not only that the city of Pawtucket reduce expenses wherever we prudently can but also that we attract new revenues by fostering economic development opportunities to move our city forward," he wrote. "We are fortunate that business and property owners are taking increasing notice of our development efforts and are again seeing Pawtucket as a good place to invest and grow."

The tax treaty is the "kind of local support that can make the difference between a resource remaining untapped and a project able to attract the private financing needed to become a major economic, cultural and residential asset for the city," said Grebien.