Metro, University News

For city and U., a political standoff

Town/Brown: First in a five-part series

By
Senior Staff Writer
Wednesday, October 21, 2009

This structure in the Jewelry District will soon house a new Medical Education Building. Brown wants to acquire more property downtown to complement it, but disagreements with the city have complicated the effort.

This article is part of the series Town-Brown
Editor’s Note: This story contains material similar to text that appeared in other published work. An Editor’s Note was published in the Nov. 13, 2009, Herald. That Editor’s Note can be found here.

Brown has long enjoyed an enviable position in Rhode Island politics, with numerous alums holding some of the state’s highest elected offices. But when one of Brown’s most prominent alums, Providence Mayor David Cicilline ’83, announced earlier this year that he wanted to levy not one, but two new taxes on the city’s private universities, the University found itself at odds with the city it calls home.

Administrators spoke out against the proposed legislation, stressing the University’s long-standing economic and cultural contributions to both the city and state.

As the seventh-largest employer in the state, the University employs over 4,200 local residents, University officials contended. Student spending alone generates over $54 million in statewide economic output. And last fiscal year, Brown paid $3.3 million to Providence in property taxes and voluntary payments, they said.

But Cicilline insisted that Providence — a municipality whose annual operating budget is about $140 million smaller than Brown’s — needed the cash.

Though the two tax bills have stalled in the Rhode Island General Assembly, the arguments over taxation continue, tainting Brown’s relationship with state and local lawmakers.

Most recently, the tax debate has taken a central role in discussions as the University considers whether to expand into the Jewelry District downtown. In recent interviews, Brown administrators said Cicilline’s tax initiatives would make land acquisition for the University all but impossible in coming years.
Looking to the Jewelry District

Brown has long had its eye on three parcels of land that will be sold as part of the state’s ongoing “Iway” project to relocate the junction of I-95 and I-195 downtown. The Iway project will be complete — and more than 20 parcels of reclaimed land will be ready for use — by the end of 2012, according to the Rhode Island Department of Transportation’s Web site.

The University has expressed interest in four acres in the city’s Jewelry District because it already owns — and plans to renovate — an existing building there for use by the Alpert Medical School, Richard Spies, executive vice president for planning and senior adviser to the president, told The Herald in September.

“It is a space where the University can expand, that’s valuable to the University over time,” he said of the neighborhood.

A consultants’ report released this fall by the governor’s office, the Rhode Island Department of Transportation, the Rhode Island Economic Development Corporation and the city pointed to both Brown and Johnson and Wales University as prospective buyers of the land, suggesting that allowing the institutions to expand would support a “knowledge-based economy” in the area.

Johnson and Wales wants to build two dormitories and a hospitality college and develop “green space” on two parcels on Friendship Street adjacent to its downtown campus, wrote Lisa Pelosi, director of communications and media relations at Johnson and Wales, in an e-mail to The Herald.

In an unusual move, the universities together asked state legislators to help them secure the land, pushing for legislation earlier this year that would have assured each university the exclusive right to purchase the lots it wanted.

The proposed legislation authorized the director of the Rhode Island Department of Transportation to sidestep a conventional public bidding process and “sell, transfer and convey” certain parcels of land, at “fair market value,” to both Brown and Johnson and Wales.
Providence pushing back

But the bill made little headway, however, and, despite interest from both sides in a deal for the land, the future of the land remains in question.

House Majority Whip Peter Kilmartin, D-Dist. 61, who submitted the House bill at the request of the universities, told The Herald the legislation did not leave committee this year because of concerns raised by city officials and local politicians — including Cicilline.

Thomas Deller, the city’s director of planning and development, said the city wants certain questions answered before it approves the legislation.

“If legislation still comes back,” he said, “the land has to be sold at market value and there needs to be a clear designation of how the land will be used.”

Deller said the legislation currently contains “no time frame for the development.”

“We need growth,” he said. “Development is something that needs to happen, and it would be unacceptable for the land to just sit there for 10 years.”

Deputy Senate Majority Leader John Tassoni, D-Dist. 22, said some members of the Housing and Municipal Government Committee, which he chairs, were concerned the land would “be taken off the tax rolls without the city recouping anything for their infrastructure.”

“The mayor was pushing hard for the land to go to private industry,” he added.
Instead of passing the universities’ bills, the General Assembly should first pass the city’s dual proposals that would increase taxation on universities, Cicilline has said, according to the Providence Journal.

One bill would allow cities to assess a “student impact fee” of $150 per semester for out-of-state students who attend private colleges in Rhode Island. The universities would pay the municipal governments directly and could raise the funds as they see fit.

The other proposed legislation would allow cities to collect a fee of up to 25 percent of property taxes from nonprofits with properties valued at over $20 million. Nonprofits, such as private universities and hospitals, are typically exempt from property taxes.

The bills, which Cicilline has dubbed “Fair Share” legislation, together represent $27 million in potential annual revenue for the city, which has struggled to balance its budget since last year’s financial crisis.

But the University has objected to the proposal, with President Ruth Simmons speaking out against the legislation as detrimental to cooperation between Brown and the city.

The proposed student tax, which Simmons said “could be increased at will,” would leave universities subject to the whims of local politicians, she told faculty members earlier this fall.

“We believe it is not only bad, but highly risky public policy,” she said.

The mayor’s office did not respond to multiple requests for comment.

 

An unclear future

With the city and the University at cross purposes, the result has been a standoff, and both sets of legislation have stagnated in committee.

It’s not clear whether either the Iway or nonprofit tax legislation will be on the agenda when both chambers of the General Assembly — which is in recess until January — reconvene for a special two-day session on Oct. 28 and 29.

Greg Pare, press secretary for the Senate, said earlier this month that, though the legislation is “still alive,” it is “unlikely”  anything that is currently in committee will be resolved during the brief session.

If that were the case, all University-related legislation would need to be re-introduced next year in order to remain active, he said.

Kilmartin said he would only reintroduce the Iway bill if the universities once again requested he do so.

“If they want to hold off, that’s fine,” he said of Brown and Johnson and Wales. “It’ll be their call.”

But Spies said this month that if the legislation is not passed at the special session, the Univer
sity has decided not to push for it to be reintroduced in January. Pelosi declined to say whether Johnson and Wales would pursue the legislation in 2010.

“There seems to be no point,” Spies said of reintroducing legislation. “With the city’s opposition, it stands no chance to pass.”

If Cicilline’s administration continues to lobby for increased taxes on nonprofits, Spies said, the University will be much less interested in further land acquisition in Providence.

“Without the city’s support, we can’t acquire it,” he said. “It’s very disturbing that the city can block any significant progress.”

It remains to be seen whether the state and city can agree on a plan for the sale and development of the new land. And some believe  the discussion about the Iway lands should not take place in the legislature at all.

“In the meetings that I chaired, I asked both sides to get together, to try to work out a deal, rather than the General Assembly try to make a decision,” Tassoni explained. “This is something that my committee is not willing to entertain unless I can get an agreement to come out of both sides.”

He suggested University officials work directly with the mayor’s office.

“Neither side wants to be a bully about these things,” he added. “But reasonable people need to sit down and discuss it, and make some solutions to the problem.”

 

Topics: