Judge rules PVD council can move to undo developer's controversial tax breaks. What's next.

The Providence City Council's effort to unravel controversial tax breaks granted to wealthy developer Arnold "Buff" Chace will move forward.

Superior Court Judge Joseph McBurney on Monday granted the council's motion to intervene in a three-year-old case that led to the tax breaks on 10 downtown buildings under Chace's control. That means council members are one step closer to scrapping the breaks, which raised eyebrows after the new council was sworn in.

In his decision, McBurney disputed arguments presented by the defense and said several factors were at play in this unique case: The previous council was not necessarily made aware of the tax breaks, it was lacking important information about the tax breaks, it should have been consulted and it was "deprived" of its chance to stop them.

More: City attorney warns of a 'parade of horribles' if city intervenes in Buff Chace tax breaks

Ten buildings under scrutiny for tax breaks that could save Chace more than $40M

The decision comes after lengthy arguments over whether the council should be able to revisit the tax breaks years after they were put in place. The breaks, which City Solicitor Jeff Dana authorized in 2021 without permission from the council, the tax assessor and others, could save Chace $42.5 million in taxes over 30 years if they remain in place.

McBurney said the council has the right to approve those abatements and that lawyer Max Wistow, who represents the council, showed that its approval was needed.

Chace owns a small stake in the Providence Journal building at 75 Fountain St., but that is not one of the 10 buildings in question.

More: 'A smoking AR-15:' Attorney says he has proof tax breaks for Buff Chace buildings were wrong

Accusations of corruption and collusion

In his arguments, Wistow has accused Dana of corruption and collusion with Chace in giving the tax breaks, which were granted under a special provision intended to generate affordable housing. However, Chace's buildings are not 100% affordable. Instead, they contain only some units defined as "affordable." That means tenants can make up to 100% of the area median income.

Chace's attorney, Nick Hemond, has argued it's too late for the council to reconsider these breaks, that the previous council could have done that and did not, and contended that the council actually knew about them because they were once listed on a committee agenda. McBurney, on the contrary, said there was no evidence shown to support the assumption that council members were aware of the breaks, and that the court can't weigh allegations of that sort.

More: Spoiled brats or entitled to millions? Chace cousins rip each other in court over $80m family trust

What's next for the tax breaks?

Wistow told reporters he will file a motion to vacate the consent order that gave Chace the tax breaks. He said he hopes Judge Melissa Darigan will hear the motion.

Wistow suggested that if the case goes to trial as he hopes, he wouldn't depose Lt. Gov. Sabina Matos – a former council president – or her successor, John Igliozzi. Wistow said he doesn't see the significance of questioning which council members may have known about the tax breaks.

Hemond said he disagreed with McBurney's decision, particularly on the point of whether the council's motion was timely. (Hemond thinks the council waited too long.) Hemond added that he will "evaluate whether or not we want to file an interlocutory appeal."

Mayor Brett Smiley, in a statement, expressed his disapproval of the council's move forward.

"My Administration honors agreements that are settled," Smiley said. "This decision allows Wistow to attempt undoing an agreement with Cornish Associates and signals that settlements with the City may have no finality to them. After today, we plan on filing an appeal and are still committed to finding a way forward that doesn't intervene on a settled matter."

Chace still facing family legal battle in another courtroom

Meanwhile, Chace awaits rulings in a legal feud over his family's more-than-$70-million trust. Chace's cousin, Malcolm Chace IV, his siblings and heirs are attempting to remove the developer as one of the fund's trustees after he allegedly engaged in self dealing. Superior Court Judge Judge Brian P. Stern is expected to issue those rulings in the coming months.

This article originally appeared on The Providence Journal: Providence City Council can move to undo Buff Chace tax breaks, judge rules