NEWS

By John Howell Sometimes all it takes is a little extra boost to get across the goal line. Michael D’Ambra believes the action the City Council took Monday night could be just what’s needed to bring a Hyatt Hotel to Warwick City Centre. The hotel would be the first step to a multi-use development D’Ambra proposed for eight acres on Jefferson Boulevard more than seven years ago. But then the economy took a nosedive, and the proposal for 540,000 square feet of office and retail space and a hotel never went any further than gaining the required city approvals. It’s not that D’Ambra, the president of D’Ambra Construction, hasn’t tried to find prospective tenants or prepared for the day when work would begin. The asphalt plant once located on the site has been relocated to Johnston, although offices for the company that specializes in sewer and road construction is still on the site adjacent to the Interlink and the commuter rail station. It’s on that northerly end of the property where D’Ambra plans to build a 120-room hotel with a skywalk connecting it to the Interlink and Green Airport. The boost that quite possibly will take the project from the drawing boards to financing and construction is the tax stabilization agreement (TSA) unanimously approved by the City Council. Under the agreement applying to the 111 acres of the City Centre intermodal zone, new developments of $5 million or more would have the increased appraisals of the property phased in over 15 years. During the first five years the “base” appraisal of the property as set before new construction would be locked in. Over the next 10 years, the new and higher value of the property would be phased in at the rate of 10 percent a year. Under the current commercial tax rate, the TSA would generate a tax savings to the property owner of almost $1.5 million for each $5 million of new development over 15 years. TSAs would be approved by the city tax assessor and would apply to new development only. “It’s certainly going to make it easier,” D’Ambra said when asked what the TSA could mean for him. In addition to the hotel, which would have a swimming pool and meeting rooms but not a full service restaurant, D’Ambra hopes to start construction on the first office building. He put the value of this phase of construction at $20 million. Also in the audience to witness the council’s historic action – this is the first tax credit the city has offered to attract new development – was Joseph Piscopio. Piscopio acquired the former Malleable Iron Works building at the intersection of Jefferson Boulevard and Coronado Street, where he developed the Hilton Garden Inns and later the Iron Works Tavern. He has had plans for additional developments on the property as well as other land he owns in the intermodal zone. “Anything is a help,” he said of the TSA. Piscopio pointed out that private development within City Centre has been a long time coming. Those were practically the same words City Planner William DePasquale used in describing the need for a TSA. DePasquale pointed to the investment the state and Rhode Island Airport Corporation have put into the area, and how with federal funding changes are being made that put in place the infrastructure for redevelopment to occur. He also talked about the new generation of millennials, people aged 20 to 40, and how they gravitate to an environment where they are within walking distance of transportation and amenities. He called the intermodal zone, infrastructure investments and the TSA “a recipe for redevelopment.” That’s just what Councilmen Steve Merolla (D-Ward 9) and Joseph Solomon (D-Ward 4) want to hear. Merolla advanced the concept last August after learning of state legislation aimed at stimulating development of the Route 195 parcel in Providence. The city administration picked up on the idea, with DePasquale and the planning department researching how a City Centre TSA might dovetail with the state plan to generate even more incentives for new development. One benefit DePasquale found is that the city could be eligible to receive a 10 percent rebate of the tax benefits given developers. “That would be a pretty good deal,” he told the council. DePasquale also addressed a commonly asked question since the TSA was proposed – why the tax credit could not be universally applied to new city development. He pointed out that redevelopment, which this would be, is inherently more costly than “green field” development. Added costs include land assembly – as acquisition of several sites is needed for a major development – as well as demolition and, frequently, environmental cleanup. Also, since development is in a confined area, structured parking is often required, which pushes up costs. DePasquale is also looking to create a sense of urgency about City Centre development. To do that, he built in a five-year sunset provision for a TSA application. “We want to spur and catalyze development,” he said. Merolla noted intermodal zoning has been in place since 1998, yet little has happened in the form of private development. “This needs a kick start,” he said. “I docketed this last fall. Let’s get this off the ground.” Merolla had issue with the provision in the legislation that a landowner would forfeit the TSA if they had failed to pay taxes within 60 days. He observed property could be going through an owner transition or that the payment had been overlooked for other reasons. “That is kind of harsh punishment,” he said, suggesting as city legislation provides that landowners get “one bite of the apple” to have penalties and interest costs waived on late payments. The TSA was amended to reflect his suggestion. The council also approved Solomon’s recommendation to extend the sunset provision from five to 10 years. http://warwickonline.com/stories/city-approves-tax-break-for-new-develop... Draft Legislation (Prior to Council Amendments): http://www.warwickri.gov/sites/warwickri/files/agendas/pco-13-16_intermo...