Warren moves ahead with tax targeting vacant buildings

Hope is to pass next month, add in language making law apply to mixed use buildings as well

By Ted Hayes
Posted 9/11/20

The Warren Town Council on Tuesday unanimously passed the first reading of an ordinance that would give the town the ability to tax certain commercial property owners who aren't doing enough to get …

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Warren moves ahead with tax targeting vacant buildings

Hope is to pass next month, add in language making law apply to mixed use buildings as well

Posted

The Warren Town Council on Tuesday unanimously passed the first reading of an ordinance that would give the town the ability to tax certain commercial property owners who aren't doing enough to get their buildings filled.

The so-called non-utilization tax, which exists at the state level and is employed by several cities across Rhode Island, would give the town the authority to assess a 10 percent yearly tax on the assessed value of vacant or under-used commercial buildings.

Town officials want to use it to "encourage" property owners to fill their vacant storefronts, particularly in the highly visible downtown area. And council members hope to expand it by adding in language that would extend the tax to vacant commercial spaces in mixed use buildings, of which there are many downtown. The plan will be back before the council in mid-October for a final, second reading.

"We have several large commercial properties that have been vacant for a number of years which are predominantly located in the downtown area," Warren Town Planner and Community Development Director Bob Rulli said.

If the tax passes here, "the property owners will be incentivized to either lease those properties or somehow see that they become occupied. The idea is not to go after every storefront that has been vacant for just a short period of time. Our goal isn't to raise revenue. Our goal is to fill these buildings."

Mr. Rulli cited three specific properties as areas of concern:

* The old stone bank at the corner of Main and Market Street. It was purchased for $190,000 in 2011 by 414 Main Street LLC and has been largely vacant ever since;

* And the Liberty Street School on Liberty Street and former Second Story Theatre at 28 Market St., both of which have been vacant since being purchased in December 2018 by ZJBV Properties LLC of Manchester, N.H. The firm paid $70,000 each for those properties.

Mr. Rulli said that in the case of the New Hampshire-owned properties, he has not had any success contacting LLC principals about the status of those buildings.

While the tax as written would allow the town to assess a tax on those properties or other similar ones, more unclear is what could be done to fill the ground floors of mixed use buildings on Main Street; under the town's ordinances, mixed use properties contain residential units on secondary floors, with commercial on the ground floor. There are many vacant commercial mixed use spaces in the downtown area, and councilors said they believe it's imperative to go after those too.

"There are quite a number of buildings in Warren that are mixed use," said Brandt Heckert. "If the intention is to try and encourage building owners to get their storefronts occupied, we couldn't move forward unless we were able to" get mixed use added in to the tax.

John Hanley agreed, saying something should be done to help the law reach the properties the town intends:

"The residential above supports the cost of the building so they (owners) have no incentive to work on that first floor or push to get it rented," he said.

"So without the teeth in this thing it means nothing. At least with (the tax as written) we'll be able to address" the Liberty Street School, Second Story Theater building and bank, "and then adjust the ordinance" to include mixed use.

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