NEWS

In concert with state legislation to spur development and create jobs, the City Council and the administration are in agreement on a Tax Stabilization Agreement (TSA) program designed to foster development in City Centre Warwick. In a rare move where the full council and the mayor are in agreement, the parties announced Wednesday they would jointly sponsor tax stabilization to “jump start” City Centre. To be eligible for the program, development projects would have to be within the Warwick Intermodal District and have a project cost of not less than $5 million. Further, construction of the project would have to start within a year of receiving a tax stabilization agreement, which would be issued by the city tax assessor and completed within 36 months of the agreement. A manufacturing or commercial concern relocating from inside the state to City Centre would not be eligible for the plan. In return, the assessed value of the undeveloped site would be frozen for five years. After that, the assessed value of the full development would be phased in at 10 percent per year until the full assessed value is in place by the 15th year. The program would expire on Dec. 15, 2021, at which time applications would cease to be accepted. Based on the current commercial rate of $31.13 per $1,000 of valuation, taxes on $5 million of valuation total $155,650. Under this program, and based on the current tax rate, the city would give up $1.47 million in tax revenues while receiving $700,425. The TSA would become the city’s first program to stimulate development with tax incentives. “To have all nine members as sponsors shows that the city is united in our desire for City Centre Warwick to be an economic engine for our future. With the infrastructure investment that has already been made, this legislation really positions the city to grow and prosper,” Mayor Scott Avedisian said in a statement. Three major landholders and developers within the Intermodal District, who have all had plans on the books, in some cases for multiple years, stand to benefit from tax stabilization. In fact, when developer Michael Integlia acquired and subdivided the former 80-acre Leviton Manufacturing property, he said some form of tax credit would make the re-purposing of the Elizabeth Mill built in 1875 viable. That didn’t happen, and the cost of converting the mill to offices or residential was deemed excessive. In December 2014, Integlia announced a plan to raze the mill and erect a $50 million, four-story multi-use building on the Jefferson Boulevard site. Last August, Integlia was joined by developers Joseph Piscopio and Michael D’Ambra at the City Council in support of expanding the intermodal district from 95 to 111 acres. They were also in agreement that a form of tax credits or tax stabilization would stimulate development when the issue was raised by Ward 9 Councilman Steve Merolla. Merolla pointed to the Rebuild Rhode Island Tax Credit program proposed by the state at the time, saying it “could mean a lot to Warwick.” Merolla and Ward 4 Councilman Joseph Solomon are credited with the idea. The administration then worked on the local program with the state Commerce Corporation to ensure that it dovetails with the state law. In statements, all nine council members support the program, with many suggesting it be extended to other areas of the city. That’s not likely to happen soon. The state program names Green Airport and the intermodal zone. In addition, the state program targets mixed use development, which is planned for City Centre. City Planner William DePasquale sees the state and city programs as fueling the development in the district that has been talked about for years and has yet to take off despite the investment of $267 million in the Interlink and station by the Rhode Island Airport Corporation and additional millions in federal planning and infrastructure grants. “It requires skin in the game for the state, the city and business,” DePasquale said. While he was uncertain of the specifics of the state program to provide tax incentives for job-creating projects, he thought the city program could become a requirement for state eligibility. For developers, he sees the program as “bridging” the gap of financing projects in an area rife with costly environmental remediation, demolishing outmoded structures, and buying small parcels of land to assemble a site large enough for development. Giving Warwick the competitive edge is a theme that weaves through the comments of council members. “It will allow us to remain competitive with other states and cities in attracting new commercial growth to our community. This will hopefully act as a catalyst for future projects and ultimately lighten the load on our residential taxpayers by expanding our commercial tax base,” Solomon said in a statement. In an interview the councilman said the “city has to adapt…we’re not reinventing the wheels, but we’re modifying them.” He thought the program could be expanded once it has proven itself with the bottom line being “more tax revenue and more jobs.” “I’m hoping it will spark some development around the airport,” Merolla said. He sees the program as giving developers “a bit of a break” until they get tenants for their buildings. “I would like to see the Fidelitys and the Amgens of the world building there.” “I am very excited about this TSA and the potential jobs it will bring…It will be a vital tool for long awaited development in Ward 3. I also look forward to future tax treaties for other parts of the city to further their economic base as well,” Councilwoman Camille Vella-Wilkinson said in a statement. The council is scheduled to vote on the TSA on May 2. http://warwickonline.com/stories/city-centres-competitive-edge,111293