Is Elorza Administration Brewing for a Fight with Fane Over Tax Stabilization Agreement?

Mayor Jorge Elorza’s administration may be gearing up for a fight with Jason Fane over the tax stabilization agreement(TSA) on the developer's 46-story residential tower.

The State of Rhode Island has stripped the City of Providence of its oversight over the zoning issues on the I-195 Commission lands relating to incessant delays by the Elorza administration.

According to Jim Malachowski of RDW Group and spokesman for the project, “Mr. Fane has not seen the numbers so he has no comment on them.”

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Malachowski said he suggests that people focus on the positive impact the Fane Tower will have the City of Providence’s finances.

Presently, the land where the Fane Tower is proposed pays no taxes. Over the next 16 years, the property will pay $70 million according to the requested TSA.

“The TSA is a tool to attract development. It was a factor in Mr. Fane’s decision to build in Providence. Without the TSA the taxes would be zero as he would not have come to Providence,” said Malachowski.

“You also have to consider the economic multiplier effect of the spending in the local economy from the tenants and building maintenance cost. Over the life of the building this will far exceed the tax saving,” said Malachowski.

Fane’s 46-story ambitious project is aggressively moving forward and has added an important strategic partner. 

The documents for the cost estimates were recently prepared by Gilbane — one of the largest privately held, family-owned construction and real estate development firms in America.

The controversial project has repeatedly delayed by Elorza and has drawn the ire of the Providence Preservation Society.

In contrast, trade unions have been strongly pushing for the tower, which is estimated to create more than 1,200 jobs over the course of the project.

In late November, Fane provided a check to the city of Providence for $205,575 as the application fee when he filed for a tax stabilization agreement. 

The spreadsheet prepared by Janesse Muscatelli, the Deputy Tax Assessor for City of Providence outlines the difference between the tax stabilization payments and a fully taxed project.

It is clear that if the Elorza administration tries to force Fane to pay full taxes, it would be the death knell to the project which is the largest private investment in Providence since the Providence Place Mall more than 20 years ago.

The Elorza Administration has pushed through dozens of TSAs for a range of projects during his five years as mayor.

 

Taller than Previously Proposed, Nearly 20% Increase in Units

In November of 2018, the Fane team provided GoLocal with detailed numbers to the project — specifically, the project a year ago was estimated to have 420 units "plus or minus" and would be 495 feet tall.

Documents submitted to the city in late November unveiled that the project is now 550 feet tall and has grown to 500 units -- a height difference of 55 feet.

This represents an 11 percent increase in height and nearly a 20 percent increase in the number of residential units.

“The Fane Tower will be approximately 550 feet tall and include about 500 residential apartments ranging from studios up to large four-bedroom family apartments and penthouses. Approximately 330 parking spaces are anticipated, though the specific number of units and precise apartment layouts have not yet been determined. It is expected that the building will have almost 14,000 square feet of street level retail space on the ground floor, and more than 500,000 gross square feet in the residential tower,” according to Fane’s submission to the City.

The number of proposed parking spots would also increase from 300 to 330 spots.

“The City of Providence amended the zoning ordinance allowing the project to be built to the maximum height of 600 feet. The State Historic Preservation Officer concluded that the project will not diminish or otherwise adversely affect the historic character, significance, integrity or National Register eligibility of any of the listed properties in the project's area of potential effects,” states Fane’s application.