Projo Biz Blog

By Christine Dunn
Journal staff writer

PROVIDENCE, R.I. -- Providence City Councilman John J. Lombardi says that by leasing the 96 newly built Capitol Cove condominiums on Canal Street as dormitory space to Johnson & Wales University, developer Robert S. Roth has violated the terms of a tax treaty worth an estimated $8.7 million over 20 years.

In a May 22 letter to City Solicitor Joseph M. Fernandez, Lombardi said the city's tax ordinance with Capitol Cove, LLC has "a clear and unambiguous prohibition against "the use of any building or portion of the building for dormitory or apartment dormitory purposes," the result of such a use being that the treaty would be rendered null and void."

The city, facing a revenue shortfall approaching $50 million for the fiscal year starting July 1, must be "extra vigilant to make sure we hold people's feet to the fire," Lombardi said.

"These are unprecedented times," Roth said Friday morning. "If the building was empty, everyone would suffer."

Roth said that during the construction process, Capitol Cove LLC has been paying the city about $500,000 a year in taxes for the land. Additionally, Roth said, the company has contributed more than $100,000 to the city's affordable housing program. Leasing the building to Johnson & Wales "allows us to continue paying our taxes," he said.

"If we were to sell that building to Johnson & Wales, that would take it off the tax rolls," he added.

 Tags  Capitol Cove Johnson & Wales Providence RI

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