PAWTUCKET – To one faction at a Feb. 22 City Council meeting, a tax treaty is a tool that keeps the city competitive in developing major projects that bring new revenue and jobs.
To the other, such an agreement subsidizes wealthy developers to the detriment of residents who will have to live with the odors of diesel trucks, with nothing of real value coming back to them.
Ultimately, the City Council approved the 20-year tax stabilization agreement with JK Equities, with all but one member, Clovis Gregor, agreeing that the benefits, including more than $67 million in estimated economic activity support for 431 jobs, are worth it.
Attorney Kelley Morris Salvatore, speaking for the developer behind the Blackstone Distribution Center, a 160,000-square-foot project, noted that the city’s tax stabilization ordinance is meant to encourage economic activity by incentivizing companies to locate here.
Answering residents’ criticisms of the project taking up a portion of the Morley Field property, she said the proposal as presented was not related to that city property.
“We’re not talking about Morley Field tonight, we’re talking about this project and the economic benefit it’s going to bring to the city,” she said.
The flexibility of a TSA is important to any new project, she said, and the reason it’s needed is the double-digit cost inflation for construction that’s seen bumps of 2-4 percent in 2021, 11.5 percent last year, and 14 percent this year.
“It is critical assistance,” she said.
But Gregor, whose district will host the facility, remained critical, and said the project at 1 Moshassuck St. can’t be seen as separate from the parking lot that will eventually be built on the Morley Field property. He read letters from constituents who see the project as both harmful to the environment and profitable only for the developer in lining the pockets of the rich. This stabilization agreement doesn’t serve the community, he said, and the project will move forward whether or not the agreement is signed.
Local State Rep. Cherie Cruz also opposed the TSA, saying they’re supposed to be meant for projects that improve the lives of people in the community, and she doesn’t see the addition of “400 diesel trucks” and taking away the only recreation space in the area as doing that.
Tax Assessor Bob Burns gave a synopsis on how the city has benefited from up to 20 such agreements in the past 12 or so years, saying taxes have increased by some $5 million over the past decade as a result of projects tied to TSAs. These aren’t a waste of money, he said, and the city doesn’t lose any money even as the projects are added to the tax base. Phasing in the value of improvements at a property, to the point when $612,000 in tax revenue is coming in after year 20, “helps everyone,” he said.
Burns cited the competition between communities with similar agreements available, saying Pawtucket has to be creative with cities such as Providence, Cranston, East Providence and Warwick.
Councilor Mark Wildenhain said he agreed, citing the increased cost of construction and the need to increase the tax base to keep people in their houses. He said the company has already invested significant funds into the property, creating a much safer atmosphere. Even if the project only results in 200 jobs, he said, it’s jobs in Pawtucket, and that’s beneficial to the area.
Councilor Mike Araujo also agreed, saying Pawtucket needs to remain competitive and draw these types of jobs in.
The structure of this TSA differs a bit from past ones, keeping taxes where they are now at $32,000 annually for three years and then jumping to $64,000 for the next three years before that number doubles for the three years after that.
The total will jump from $128,000 to $257,000 in year 10, then to $357,000 a year after that, followed by more traditional incremental increases.
Morris Salvatore said the early 100 percent exemptions on the increased value are due to the significant issues her client is facing that they previously weren’t, and they’re asking the city to help. She said her client has been very successful in business, and all statements she made about their positive impact on the community were made based on an economic impact study with research behind it.
Officials cited the previous TSA that helped convert the highly visible “eyesore” rear portion of the Hope Artiste Village into attractive new residences that drivers can see from the highway.
Resident Lisa Beade urged councilors to reject the TSA for the good of the community, not for the benefit of those coming in. She said an already poor neighborhood will be inundated with “fossil fuel guzzlers and belchers,” while residents will also be robbed of the play space at the adjoining Morley Field.
Gregor said he doesn’t see the city as receiving anything beneficial in this agreement, saying the company is already committed to building. He said he takes issue with the TSA being transferable to another entity, and that the company isn’t contributing anything to the relocation of Morley Field.
Council President Terry Mercer said the proposal has been vetted and the project will transform a blighted property that was going to be torn down anyway. The reason for TSAs is to encourage development, he said.
Councilor David Moran said he thinks this is a “no-brainer” proposal. If Gregor was really against it, he said, he would have thought Gregor would have shown up during the finance subcommittee process in Room 303 and put his objections on the record then before making them on the council floor.
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