On the agenda [.pdf] for Monday’s Zoning Board of Review meeting is a proposal by The Procaccianti Group (TPG) to demolish the Fogarty Building at 133 Fountain Street. A variance is requested to use the vacated lot for surface parking as a “transitional use.”
PRI XII, LP: 133 Fountain Street* (at Sabin & Mathewson Streets), Lot 422 on the Tax Assessor’s Plat 25 located in a Downtown D-1 Central Business Zone and the Downcity Overlay District; the applicant is seeking use and dimensional variances from Sections 303-use code 64.1(Footnote 5), 502.5, 502.5(A), 502.5(B), 502.5(D), 502.5(E) and 502.5(F) to demolish the existing building and to use the subject property for a surface parking lot as a transitional use. The lot in question contains approximately 22,796 square feet of land area
*The building is actually at 111 Fountain Street.
Take a wild guess why TPG wants to tear this building down. Hardship due to property taxes, which will be reduced if the building is removed from the property.
Why don’t we just put a giant welcome to Houston sign on Route 95? Oh wait, Houston is actually building infill now and has a light rail line and everything. Soon we won’t even be as nice as Houston. But we’ll have some kick ass parking and nowhere to go.
A number of sources tell me this newfound desire to remove the building is being driven by Mayor Taveras’ newly appointed Economic Development Director, Jim Bennett. TPG asked for Mr. Bennett’s help in reducing their tax burden and shortly thereafter, TPG is applying for a variance and doing an end-run around the Downcity Design Review Committee. Mr. Bennett is now living in the Regency Apartments,
owned by TPG (TPG does not own the Regency).
Let’s think this through a bit. One of the new Economic Development Director’s first acts is to counsel a developer on tearing down a building and creating a surface lot. This is economic development?
TPG, you may recall, already has a parking lot on Fountain Street, the Old Public Safety Building Memorial Parking Lot™. That “transitional” “temporary” parking lot was built in the summer of 2007. Actually, they already park cars at 111 Fountain Street, in a garage below the building.
So why oh why is a building that is generating revenue, parking cars, being proposed to be torn down to create a surface lot to park cars?
Allow me to be on the side of the developer for a minute. It is no secret that the economy sucks, especially here in Providence. The real estate market is in the toilet, vacancies are high, and it is hard to get capital from banks to improve properties.
The Fogarty Building no doubt needs renovation or outright replacement (TPG was close to Downcity DRC approval on replacing the building with a parking structure with ground level retail back in 2007). The property taxes combined with the cost to renovate or replace the building means that the rent TPG would have to charge is too high to attract tenants in this market. Though they are able to make some money on the parking, the taxes continue to mount with no clear way to get the building occupied and generating its full potential revenue.
I would also assume that a bank presented with these facts would not be likely to finance the needed renovations or building replacement anyway, meaning even if some sucker could be found to pay the high rent, there’s not enough money to make the needed improvements.
This has been a problem at least since the recession began in 2007 and aside from the early 2000s bubble, has been a problem in Providence for decades. Unable to afford their taxes, owners seek to remove their buildings to reduce their tax rate. They may go through proper channels, use a relationship they have with government officials to facilitate demolition, simply allow a building to rot away (demolition by neglect), simply tear down the building and pay the meager fines, or just light the joint on fire. However it happens, we all know it is happening and for whatever reason, we’ve never been able to do anything to change it.
Forgive one for being hopeful that with the Mayor creating a cabinet level position of Economic Development Director, we’d finally get someone to address this. Color me disappointed that that is not the case, thus far at least.
What can we do to change this? We’ve discussed it before of course. We cannot continue to have tearing down your building and paving your lot equivalent to winning the tax lottery. The tax rates on parking lots need to come up to make them less tempting to building owners. But how do we address TPG’s dilemma of having taxes be too high and an economy that won’t let the numbers work to allow them to renovate and populate a sub par building? How can we provide a carrot to go with the surface parking tax stick?
There’s a reason I did not apply for the position of Economic Development Director, it is not my forté, but let’s play Economic Development Director on the internet.
Could we create a Decrepit Building Stabilization Program of some kind? Take a building like Fogarty and work with the developer, give them tax reductions and stabilization so they can get financing, renovate their building, and transform it into a place that contributes to the city’s economic development, rather than sitting empty and doing nothing good for anyone.
We would need to work with Smith Hill too, generating jobs and business in a building by giving property tax breaks does not make the City whole as we depend on property taxes to fund ourselves. So let’s get the state to give us a cut of the tax generated from the resultant economic development, a portion of the sales or income taxes, or in the case of residential properties, a portion of the income taxes generated from the rent or a portion of the taxes generated by the sale.
The City gives up part of its property tax to generate economic activity which would not otherwise exist; in return the state shares some of the tax money the City’s actions generated (which would not exist if the City did not take a hit on property taxes) with the City. Over time the stabilization and reduction deal would phase out and the City’s share of the state taxes would drop as the property tax was normalized.
Or hey, this whole funding on the backs of property owners is not actually working out that well, maybe sharing with the state in economic development is the new paradigm going forward.
Like I said, economic development is not my bag, feel free to tell me why this idea is crazy.
What can’t continue though is tearing away the structural fabric of our city piece by piece; building “temporary” parking waiting for some mythical future when the market will support rebuilding the city we destroyed. Some morning soon we’re going to wake up and Providence won’t be here anymore, it will just be a sea of parking with no destinations left for that parking to serve.