10 Biggest Issues Facing Providence in 2016
GoLocalProv News Team and Kate Nagle
10 Biggest Issues Facing Providence in 2016
From crime to firefighters to fiscal decisions, like the toll issue for the General Assembly, there is a dominant issue at the forefront at the year’s outset in Providence — tax stabilization agreement (TSA) extensions for four existing properties before the City Council.
SLIDES: 10 Biggest Issues Facing Providence in 2016 BELOW
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTThe City Council will be taking up requests by Monohassett Mill, Pearl Street, Rising Sun Mills, and 100 Fountain Street who are looking for five year TSA extensions, which at a public hearing in December garnered testimony from tenants and unit owners who said the sudden tax hike after the current TSAs ended would be insurmountable — while other city residents questioned the rest of the taxpayers continuing to offset the cost of the tax breaks.
Mayor Jorge Elorza sidestepped questions on Wednesday regarding his Administration’s support of the extensions in light of growing opposition, instead issuing a statement focused on reiterating the results of a study issue from last year to articulate the city’s priorities.
“A study commissioned in 2015 showed that, unless corrective measures are taken, the city faces an continued structural deficit over the next five years,” said Elorza spokesperson Evan England. “The Mayor is committed to fiscally responsible leadership needed to put Providence on a sustainable path forward.
TSA Battle
“Three months ago, the administration reported that last year's budget (for the year ending June 30, 2015) finished with a $5 million deficit,” wrote City Councilman Sam Zurier on Sunday. “This report marked a surprising change from the administration's previous reports last April and July that the budget would finish with a modest surplus or a "break even" position.”
One of the first financial issues the city will be addressing is the requests for tax break extensions for the four properties. Lawyer Nick Hemond, who represented Monohassett Mills, Pearl Street LLC, and Rising Sun Mills in December called the situation of the TSA expiration for those properties a “mini foreclosure crisis.”
Hemond, who is on the school board, is slated to replace outgoing President Keith Oliveira.
Speaking first for Monohassett Mills, Hemond said, “The five year extension is the same form the Westminster properties receive last summer. These people would lose their homes due to jump in taxes. It’s a mini mortgage foreclosure crisis. [The extension] gives them time. This is a phase in. This old [TSA] model was effective in getting the development it wasn’t effective for sustainability.”
Developer Colin Kane said the city should “erect a statue” for developer Buff Chace, not malign him for seeking extensions.
Kane said the apart from his impact, the result of the recent recession should play a factor.
“In 2006, if we look at the commercial tax rates -- what might of been forecasted for the end of the stabilization, that didn't happen. The [city] took the dial and cranked the tax rate right up,” said Kane. “No one in the world would have expected property taxes to increase for 50-70% in a ten year period. The underwriting changed on something he couldn't control.”
Keith Fernandes with the Providence Apartment Association is one of the opponents to the extensions and spoke with GoLocal on Wednesday.
“Look, we don't want to see anyone's taxes increased -- but if we stopped the tax extensions, that $1 million next year right there. We fought four years for $1.2 million for about four thousand to five thousand properties. And they'll give $1 million to 4 properties?”
“A lot of people are pissed of, everyone's picking up the tab. And I hear a lot more residential TSAs are coming — instead of focusing on bringing commercial business and good paying jobs, we’re focusing on turning the city into residential units, and at some point we'll have to many units and no jobs,” said Fernandes. “We should be focused on TSAs to companies creating jobs. These have created a secondary market.”
Aponte: Need to Revisit Nonprofits
City Council President Luis Aponte said that there were “unanswered questions” as far as the TSA extensions are concerned — and that he believes the city needs to revisit and memorialize new relationships with the city’s nonprofits.
“With the TSAs, we're taking a close look,” said Aponte. “It's important that if we do it there's a real and compelling reason to grant the extension. It's an important issue -- it would reflect significantly in next year’s budget. If anything goes by way of extension, there has to be a clear definition of what the city's getting in return.”
Aponte said that in light of the city’s challenges — and opportunities — that he believed that revisiting agreements with the nonprofits — colleges and hospitals — is necessary.”
“The nonprofit sectors that aren't taxed grow most frequently and vibrantly,” said Aponte.
“It's a 3 part conversation It's large tax exempts -- who are the big employers. It’s a city-state conversation. Nonprofits are important as they attract other business.
“In the past years, we've had good discussions and and agreements. The one-offs were fine. but we need to have an earnest conversation. It's been done fruitfully in other places like Boston-Cambridge, [Philadelphia], New Haven -- there are models where growth is accommodated for and the state understands that growth. It's been a while since everyone was around the table. It was bi-polar -- city and tax exempts. I think both sides can agree they're stop-gaps. They don't address predictability. And we need that.”
10 Biggest Issues Facing Providence in 2016
#10
Firefighters, Con't
The battle that started last year spills over into 2016. After Mayor Elorza announced he was going to reorganize the Fire Department from four platoons to three with a condensed shift schedule, the firefighters took the battle to court — and callback costs soared with injured firefighters out on leave. Elorza said the change could save the city “as much sat $5 million” in the next fiscal year (FY17) -- but the city is currently seeing red. "Through the middle of December, fire fighter "call back" expense has been $4.7 million, which represents almost all of the $5.05 million budgeted for the entire fiscal year," reported Councilman Sam Zurier on Sunday. "Should this trend continue, the cost of this line item could exceed the budget by $5 million by the end of the year."
Now it all rides on the outcome in the courts. If it ends in a negotiated settlement, the crisis could be averted. If not, firefighter union head Paul Doughty has said that Elorza can “hand over the keys to the city" for bankruptcy.
#9
Crime
From the West Side to the East Side, residents across the city in 2015 were organized and mobilized to demand action from the Elorza Administration on crime in the city. GoLocal reported at the end of 2015 that over half of the police department is eligible to retire — and the city still needs to get a new class of officers underway as budgeted. Tensions were high following a Dunkin’ Donuts worker writing #blacklivesmatter on a police officer’s cup (and the Black Major Movement continuing to call for a black major in the department).
Councilman Seth Yurdin announced this week that he is introducing a resolution to establish a special commission to review relations between the Providence Police Department and the community it serves. The Special Commission on Community-Police Relations will review current public safety practices and create opportunity for public input.
#8
Grafitti and Potholes
It’s been a mild winter so far, so perhaps at least one of the two scourges of the city will be mitigated this coming year. But addressing the conditions of the roads continues to be an issue for Providence. Last year, Mayor Elorza made a public display of commitment to addressing problematic potholes, and also pledged to respond to the rampant graffiti issue in the city that has seen the property destruction spread to private houses.
City Councilman Michael Correia recently put up a $1000 reward to find who was tagging properties in his district. Residents of the city want to feel safe, and that includes driving on roads that won’t inflict damage on their cars (or take out runners and bikers) and that their personal property won’t be destroyed. Graffiti continues to crop up, and it needs to be addressed quickly when it does.
#7
Taxes - Commercial
The city’s commercial tax rate might be frozen — for now — but there are a lot of moving pieces. The $36.75 per $1000 rate on commercial properties is among the highest in the country -- a point well-known in RI circles.
“Providence has a problem with the commercial tax rate,” said developer Colin Kane. “With new construction or significant rehab -- the costs aren't supported by current rent.” The property revaluations expected shortly will shed some light how the city will move forward addressing tax rates, but in the meantime, the TSA extensions before the Council are the 600 pound elephant in the room. “The City Council is looking for nickels in the couch cushions because of the fiscal challenges facing the city,” said Kane. “And they weren't caused by this council or mayor, but by the fact that they were kicked down the road. And now we want to malign people like Buff Chace who made the city what it is?”
#6
Taxes - Residential
The owner occupied residential tax rate could be in the crosshairs as the city looks to address revenue issues in the coming year. “Everything’s on the table,” Aponte told GoLocal. And with the revaluation, things could be in flux for the current owner-occupied rate of $19.25 per $1000 .
“Suppose you had a city where there was a wild appreciation of real estate values — that used to happen here, Providence has seen 10% before. State law says you can only increase the levy unilaterally by 4 and a quarter,” said City Counciman Sam Zurier. “So supposed you have a situation where your values go up 10% and you want to collect 4 — you have to reduce the rate by 6%. "
"If values go up enough — even 5% - then the city will get additional money without raising the rate. During a [revaluation] year - you have to get into tax bills versus rates. And when you factor in commercial and non-owner occupied values and rates, it’s tricky.
#5
Schools
Providence Schools face a tall order ahead of them. The search is on for a new superintendent following the departure of Dr. Susan Lusi. The current School Board President is stepping down at the end of the month. Providence High Schools scored among the worst in the state following the release of the first year of PARCC test scores. Current School Board member Nick Hemond is slated replace outgoing President Keith Oliveira, but question remains for the choice of the new super. Council President Aponte told GoLocal this week that stability in leadership in the school department is one of the greatest challenges facing the city moving forward. Can that be achieved in 2016?
#4
Superman
Lights have been spotted on recently in the Superman Building - i.e. Industrial National Bank Builcing — but the fact remains that the city’s iconic skyscraper remains vacant, which former Mayor Joseph Paolino called one of the biggest issues facing the city (stating that the fact that it remains empty cost him a mortgage from a top bank for an adjacent property).
Citizens Bank is eyeing a new corporate campus somewhere in Rhode Island, and while indications point to one most likely going in the suburbs, a number of business and community leaders are hoping Superman isn’t ruled out completely. Previous efforts to get state support to turn the building into apartments fell flat, and Providence residents are gun-shy about any project looking for public support. But the fact remains that the empty anchor is an eyesore for the city, and getting a tenant — or tenants — in should be a top priority in 2016.
#3
Lack of Development
Providence needs more cranes. The city has seen its first one in a while by the Jewelry District with developments at Johnson and Wales, which is a good sign — but the city needs more.
“Owners and property developers want to be treated fairly and play on a level field. Providence does not have a business friendly reputation. This is why there are few cranes in the sky in Providence and very few new businesses coming to the city or planning to expand in the city,” URI Distinguished Professor of Business Edward Mazze told GoLocal earlier. So in order to get the construction equipment in — Providence has to figure out how best to lure businesses here in the first place.
#2
Leadership
Providence needs a win — or a least a path to victory. Whether that be getting a tenant in Superman, bringing in a notable business, or articulating a concrete plan to move Providence forward, residents want to feel that the city is on the right track.
The City Council recently announced that it received the results of its cluster analysis study to identify where opportunities lie — and now we need to see results. The Mayor made multiple trips abroad in 2015. He campaigned on a promise of doubling exports from Providence in five years. What results will we see from those overseas meetings? Providence wants a concrete vision moving forward.
#1
Bankruptcy
“Absolutely not,” said City Council President Luis Aponte, as to whether the city could go into receivership in light of its current precarious financial condition.
“If the city loses, Elorza can hand over the keys, because the city will go bankrupt,” has said firefighter union head Paul Doughty regarding the firefighters legal battle over the Mayor’s platoon reduction.
Financial advisor and GoLocal MINDSETTER Michael Riley said receivership is almost a certainty.
“Essentially Providence is bankrupt and insolvent. It is only by illegally borrowing from the pension fund the last 10 to 15 years that have saved them from being sued by creditors, and the lies continue,” said Riley. “Until Providence goes into receivership nothing else can happen — no railroads, no Superman, they are sunk. I consider everything else irrelevant.”
