30-year tax break for Providence's 'Superman Building' faces City Council debate
How's the transformation of Providence's "Superman Building" coming along?
Slowly, but steadily at the moment. Five months after city and state leaders announced a deal to redevelop the former bank headquarters called the Industrial Trust tower into apartments, the City Council is now ready to debate a 30-year tax break for the building's owner.
What the tax deal looks like
The tax deal released Thursday and referred to a council committee for hearings, would freeze the 26-story tower's tax bill for 10 years after next year. Then, from 2034-2043, owner High Rock Development would pay that same base tax bill plus $250,000 each year.
Starting in 2044, the owner would begin paying a percentage of the full tax bill, including updated assessed value and whatever the tax rate is that year. The percentage of the full bill would escalate until reaching full payment in 2054.
How much all of this will save building owner David Sweetser, who is best known for building suburban shopping plazas in Massachusetts, is unclear.
A spokeswoman for Mayor Jorge Elorza, who along with state officials in April hailed an agreement with Sweetser to save the Superman Building, would not say whether his administration has an estimate of the tax savings or not.
"The Finance Department will prepare any required fiscal impact information needed by the Council Finance Committee where we expect it to be fully vetted during public hearings," Elorza spokeswoman Theresa Agonia wrote in an email.
She added that the "Tax Stabilization Agreement," as the tax treaties are known in city government, was "not pre-negotiated by the administration."
The savings to the property owner in the proposed tax treaty could be significant.
The assessed value of the tower has been declining in recent years as it sits vacant, but the draft tax treaty would mean improvements to the building would not be reflected in the tax bill for 20 years. This year the property was valued at $14.1 million, according to assessors records.
'A notable Providence property'
Elorza, Gov. Dan McKee and General Assembly leaders announced an agreement in April on $41 million in combined state and local assistance to help High Rock complete a $220-million residential conversion of the tower. The building is also counting on around $22 million in federal tax credits.
The property tax deal was not counted in the $41-million incentive package — $26 million from the state and $15 million from the city — but city officials said the redevelopment would include one.
State law sets a maximum length of 20 years for local tax treaties, but at the city's request the General Assembly passed a special bill this summer allowing a 30-year deal for the Superman Building.
City Council spokesman Parker Gavigan said he believed the draft tax treaty introduced to the City Council on Thursday had been written by High Rock attorney Nick Hemond.
"This project will inject more life and activity downtown by transforming a vacant, deteriorating building into a notable Providence property,” Council President John Igliozzi said in a news release Thursday night. “The Council must ensure the agreement benefits city taxpayers, the building owner, and creates affordable housing in the city.”
As the tax deal is vetted, High Rock continues to work on detailed plans for the redevelopment, including what will go in the first-floor bank lobby and what it will look like.
"High Rock continues to work diligently on pre-construction tasks, including completing engineering surveys and plans necessary to commence demolition, as well as finalizing processes and documentation with various transaction participants," company spokesman Bill Fischer said in an email. "We are still targeting commencing demolition activities during the 4th quarter of 2022."
"The TSA is a critical component to the overall structure of financing of the project," he added.
— panderson@providencejournal.com
(401) 277-7384
On Twitter: @PatrickAnderso_
This article originally appeared on The Providence Journal: 'Superman Building' tax deal: What we know and what is still unknown
