Violet: Rhode Island Insiders Are At It Again

On April 2 a Senate committee held a session on Governor Lincoln Chafee’s bid to reinstate some $25.9 million of historic tax credits. Missing from the discussion was any mention of the so-called “Superman building,” the towering hulk whose developers are seeking at least $48 million in these tax credits. The ominous omission is reminiscent of the 38 Studios deal where the General Assembly started off talking about a $50 million Job Creation Guaranty program, then boosted the amount at the eleventh hour to $125 million to cover Curt Schilling’s project. Players  like Gordon Fox, pushing this private company’s agenda, include lobbyists Bill Fischer, a 2012 spokesperson for the Democratic Party, and Nick Hemond, the 2012 campaign aide who, along with Fischer, directed Speaker  Gordon Fox’s re-election  in a contested race.
For the record, I am a believer in historic tax credits when judiciously used. The proposal being made by Mr. Fox’s minions do not fit into that category. Privately-owned Massachusetts-based High Rock Development purchased the building in 2008 and enjoyed some years of income with the just-ended Bank of America tenancy. Now the company wants a bailout for a business decision made five years ago. Why should this organization be subsidized by taxpayers now?  I’m sorry that it didn’t work out for them, but that’s life for most entrepreneurs—save for those who are politically connected. Further, the bulk of the money going to a single company is the same imprudence exercised in 2010 with 38 Studios.
The Chafee administration offered to rent up to 6 floors from the Development Company and was turned down. Talk about looking a gift horse in the mouth.  The General Manager claims he wants about 250-275 apartments there, and your tax dollars to pick up the slack. One need only to look at the Waterplace condos and the Westin complex to see that prices have plunged since those edifices were first built with the promise to make Providence another Boston. Many other Providence developments have college students as “owners” for a short period. There is an empty lot on Westminster Street that was supposed to be the site for high rise condos. Hundreds of living spaces on Canal Street are leased to Johnson and Wales’s students since the crowd that was predicted to flock to Providence never came.
Why then does this company want $48 million in tax credits? Certainly, the assertion that the vacant land freed up by the relocation of 195 will provide purchasers/tenants  is patently ridiculous, given the surfeit of properties in Providence.  One wag has suggested that the developer uses government-related money to pay himself a whopping manager fee and really has no incentive to make the property work since he skirts from project to project when the fees are exhausted. No doubt, Mr. Fox’ other friend, Michael Corsi, is looming in the background and poised to sell the tax credits while earning a bundle for his efforts.
Fortunately, Representative Patrick O’Neill (D-Pawtucket) has sounded a warning but he’s a voice in the wilderness. The silence is deafening from his colleagues and the Republican Party. The state seems poised to underwrite another speculator who has hired the right connections. For shame!

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