CITYWATCH Tax incremental financing idea provokes concern BY IAN DONNIS

A tax incremental financing (TIF) district, encompassing a chunk of downtown and a slice of the West Side, is seen by supporters as a way to spur jobs, development and related improvements, including efforts to make downtown Providence more pedestrian-friendly. Critics, though, fear that a TIF, in the absence of additional efforts, will exacerbate gentrification and an exaggerated focus on developing downtown at the expense of the city’s neighborhoods.

Providence planners have developed a draft form of the tax incremental financing plan, although Thomas E. Deller, director of Planning & Development, says, "Right now, it’s strictly in an early exploration stage to try to understand whether it works for us, whether it makes sense for us." If the TIF goes forward, Deller says, "and we make the improvements, it will be a process of starting to improve the pedestrian environment, the job environment, and the green space environment, and hopefully, from that we can spin off a variety of others things that will lead to housing for all income groups."

If the TIF district "is going to be part of inclusionary zoning, if it’s going to create jobs for the people of Providence, then I’m willing to look at it," says city Councilor Miguel Luna of Ward 9. "But I think you have to do more. We have to have some policy that is going to benefit the rest of the city. What are you doing on the other side? What are you doing in the neighborhoods? I think we need to strike a balance into downtown and the neighborhoods . . . Right now, I’m more cautious than anything else."

An overhead photo of the "Proposed Downtown T.I.F District" shows that it encompasses the Westin Hotel, Kennedy Plaza, Fountain Street, the Atwells Avenue and Broadway overpasses linking downtown with the West Side, a strip of adjacent land on the West Side, and the so-called "power block," which is envisioned to include a 28-story additional tower next to the Westin, upgrading the Holiday Inn as a Hilton with a 27-story condo tower, and another 27-story tower on the site of the former circular Gulf station, among additional development.

Tax incremental financing districts are considered by proponents as an economic development tool to spark development projects that would not otherwise happen. A city typically freezes or reduces the tax assessment on properties within the district, issuing bonds to pay for infrastructure improvements. With expanded tax revenue from new businesses, the thinking goes, the city eventually uses the additional funds to pay off the bonds. Following the retirement of the bonds, the entire value of the land returns to being taxable.

Sara Mersha, executive director of the activist group Direct Action for Rights & Equality, says the idea of reserving tax revenue for a particular part of the city doesn’t square with a speech by Cicilline earlier this week, in which the mayor expressed the city’s need for additional education funding. The city has also lagged, she says, in acting on First Source, an effort to offer jobs to Providence residents, which became law years ago, but was never implemented. While other needs go unmet, "somehow there’s going to be money to put people’s tax dollars into making downtown more beautiful," Mersha says.

Deller says building the city’s tax base would spur community-wide improvements and should foster the growth of jobs. Mersha disagrees. "We absolutely do not think it would have any kind of long-term benefits for the city at large, and particularly for the low-income communities that most need these resources," she says. "This makes absolutely no sense. [Cicilline was] elected on a promise of bringing the renaissance to the neighborhoods, and this is not fulfilling that promise."