Tax breaks proposed for Main Street real estate

Mayor says plan would give property owners incentives to invest

WOONSOCKET – City Hall has unveiled an ambitious proposal to encourage new investment in the redevelopment and preservation of the traditional downtown with a hybrid plan that phases in – and partially forgives – taxes on real estate renovations.

As requested by Mayor Lisa Baldelli-Hunt’s administration, the City Council tabled the tax stabilization plan on Monday to give the Planning Department an opportunity to air the finer points with members before they vote on it. No date has been scheduled for the session yet.

The mayor says the plan isn’t a radical idea.

“This is what successful communities in our state and our country do,”

she said. “It’s what we need to do to be competitive.”

While the details are set forth in more than 20 pages of legalese, the ordinance sets up a 12-year program of tax offsets on the value of renovation, expansion, environmental remediation or rehabilitation in a wide swath of the downtown area. The target zone includes hundreds of parcels that roughly hug the Blackstone River, from River Island Park to the Truman Bypass.

Beneficiaries of the tax break would pay no new taxes on the value of their investments for the first three years of the program.

Their tax burden would kick in during the fourth year at 11 percent of the assessed value of their finished renovation works. The burden would subsequently increase by an additional 11 percent annually until the work is taxed at 100 percent of its value, according to Planning Director N. David Bouley, chief architect of the proposal.

Bouley said it’s critical for the layman to understand that the city does not lose any revenue by adopting the program. But it does if the city cannot develop a practical strategy to stanch disinvestment and deterioration of existing property in the downtown area.

Bouley said if the city fails to encourage property owners to repair and rehabilitate their Main Street holdings, and to bring new investors to the table, the existing stock of real estate in the area is at risk.

“If the city doesn’t do something to assist these properties it’s going to lose those, too,” said Bouley. “This is a good opportunity for the city not to lose taxes and also provide an incentive for property owners to make improvements and not get punished for it.”

Bouley said the program is the second flank of a downtown renewal program that the city introduced last year as an “overlay” to the existing zoning map for the area. The overlay is designed to give the city more flexibility to consider a broader range of property uses than the zoning ordinance currently permits, including artists lofts, museums, educational institutions and cultural organizations.

Bouley said Gov. Gina Raimondo recently announced a program of state economic aid that would allow the city to recoup a portion of the money that it forgives under the proposed incentive program.

Officially, the city is calling the new initiative the “Omnibus Tax Stabilization Program for the Woonsocket Downtown Revitalization Area.”