Rhode Island’s capital city of Providence has experienced dramatic ups and downs over time. These days, the city is still trying to bounce back from the loss of office workers and shrinking foot traffic caused by the pandemic. Providence has a lot of assets, including a strong sense of place, a great restaurant scene and a dynamic arts community.
But the city also faces persistent challenges in building its tax base, improving its schools and getting a better handle on its long-term pension liability.
So what has to happen to bolster the local economy and to make Providence more vibrant? And what role can a nonprofit foundation funded by private sector groups play in trying to deliver a brighter future? This week on Political Roundtable, Ian Donnis goes in depth with executive director of the Providence Foundation David Salvatore.
TRANSCRIPT
This transcript has been edited for length and clarity.
Ian Donnis: You are the executive director of the Providence Foundation. For people who are unfamiliar with the Foundation, how would you describe what it is and what its purpose is?
David Salvatore: The Providence Foundation is a 50-year-old registered 501c3 that advocates for downtown Providence specifically, making certain that downtown takes on bold and visionary projects. So when we think of downtown Providence in the eighties when I was growing up, it was a desolate place. It wasn’t one of the safer neighborhoods in the city, but through the leadership of folks in the State House, City Hall, and the Providence Foundation, folks convened and they created the riverfront that was redeveloped decades ago. You can also think of the 195 district. There was a federal highway running through residential neighborhoods in Providence that opened up 30 acres of developable land in open space.
Donnis: Let me stop you there because we’ve got a lot of ground to cover. What are the current priorities for the Providence Foundation?
Salvatore: So currently we are looking at housing conversions or commercial conversions to create housing opportunities in downtown. It’s no secret that the state of Rhode Island is facing a housing crisis, and the Providence Foundation firmly believes that we have an opportunity to fill these vacant commercial spaces with full-time residents while supporting the business community, i.e. the restaurants and boutique hotel operators in downtown Providence.
Donnis: One issue facing a lot of cities is how office buildings have less occupancy than in the past due to the pandemic. So it seems like downtown Providence could be ripe for more residential conversions, but it doesn’t seem like there is huge momentum, at least on the surface. Why not? What would it take to bring about more residential conversion?
Salvatore: Providence has always been hindered by a very high commercial property tax rate. And in fact, Providence has had the third highest effective commercial property tax rate in the country behind Detroit and Chicago. So we, again, have an opportunity to convert these spaces for residential purposes, but we have to make that process easier for developers to do what they do best, and that’s develop properties and create these new housing opportunities.
Donnis: You’re no stranger to politics as a former president of the Providence City Council. One of the city’s greatest challenges for decades has been generating more revenue. In part that’s because nonprofit tax-exempt institutions take up a lot of real estate in the city. So how do you think Providence can do a better job in generating more revenue?
Salvatore: Well, again, speaking of downtown and these residential conversions, we have witnessed over recent years commercial property in downtown Providence decline in value. One way to generate more revenue is by increasing the values of those properties and by filling them with full-time residence. Homeowners and tenants alike in our residential neighborhoods are experiencing a tax increase this year while these commercial properties will see a tax decrease. Again, the Providence Foundation believes that filling these buildings with full-time residents is an opportunity to create more revenue for the city while stabilizing taxes for full-time residents.
Donnis: Another question related to politics. The Providence Journal reports that some Providence lawmakers are balking at Mayor Brett Smiley’s plan to raise taxes by 7.5%. Do you think the mayor is on the right track with that proposal?
Salvatore: Providence’s budget is no stranger to many of the fixed costs that have plagued the budget for many, many decades. So whether it be the education commitment that is now around $15 million, which is an investment in Providence families and students, but also the very high pension payment that is required to be made every year, in addition to delivering city services to our residents. So again, I think the Providence Foundation plays a role in convening folks and bringing them together so that taxes reflect the opportunities that are presented to homeowners, tenants, and businesses alike. I think the mayor is in a tough spot at the moment in terms of the budget that he has presented, but again, we firmly believe that addressing these challenges now will alleviate some of the pressures moving forward.
Donnis: So it sounds like you’re reluctantly supportive of the tax increase.
Is that right?
Salvatore: Again, this mayor, I don’t think, has a choice but to raise taxes in this year. But again, that provides some predictability in some of the outer years.
Donnis: There are a lot fewer office workers downtown since the pandemic and it seems like there’s a lot less foot traffic. What would it take, aside from residential conversions, to bring more street life back to Providence and more foot traffic?
Salvatore: Well, the Providence Foundation has been instrumental in creating two organizations: the Downtown Improvement District, which are the yellow jackets that keep our downtown clean, neat, organized, and safe, and then the Downtown Providence Parks Network, as well. The Parks Network, in coordination with the DID (Providence Downtown Improvement District) are responsible for making sure that our open space, something that I never thought I would see as a child in downtown Providence, open space where there’s recreational activity, but making certain that those spaces are programmed and activated at all times and on a consistent basis. Throughout the month of March, the Providence-Warwick CVB, did an outstanding job of bringing folks from inside our state and visitors to downtown Providence to celebrate the NCAA tournament, the culinary collective and the comedy festival. So we need more activities like that on a regular basis to, again, attract more visitors and residents to support the small business community in downtown Providence.
Donnis: The Secret Mall Apartment movie showed how a group of artists created a hidden living space in Providence Place. I think the story was, kind of, how artists are the secret sauce in making Providence desirable, but that happened years ago. Now the cheap mill spaces that helped to, kind of, serve as an incubator for those artists is pretty much gone. The cost of real estate is way up and those mill spaces are far fewer. Do you see a role for the Providence Foundation in helping to cultivate the arts community in Providence?
Salvatore: Absolutely. That should be part of a broader housing strategy. We have always embraced making certain that our downtown is safe. Open space is available to all, but also embracing the arts because we know that the arts and our historic character is an economic asset to the city of Providence, not only in downtown, but in our residential neighborhoods as well. So when we’re looking at our housing strategy on a broader level, there should be an opportunity to not only embrace, but provide opportunities for the artist community as well.
Donnis: A plan was announced three years ago in 2022 to revive the so-called Superman building as a residential building. That has stalled and there does not seem to be any forward momentum. Do you have any hope that that project will actually come to fruition?
Salvatore: The Providence Foundation just doesn’t have hope, but we’re confident that that project will come to fruition. That will inject the economic activity in the greater Kennedy Plaza area in downtown, what is needed to fill ancillary buildings with full-time residents and businesses, as well. Thinking about the Industrial Trust Tower or the Superman building, that’s an opportunity to create 300 residential units, potentially up to 400 new residents in downtown Providence to support, again, the business community and the open space that’s been created. So that building, while iconic, should be filled in the very near future for the sake of the economic vitality of downtown Providence.
Donnis: Short of a new subsidy for the property owner, what will it take to move that project forward?
Salvatore: Well, I think the Providence Foundation, again, is a convener in these spaces. We have to, again, bring folks to the table, define what the issue is and say, look, folks need more skin in the game around this project. It has to get done. And we believe that the long-term benefits ultimately benefit not only downtown, but the residential neighborhoods as well in terms of stabilizing their tax base.
Donnis: Kennedy Plaza is right outside your office and there’s a plan to relocate the RIPTA the buses out of there. Will that create too much of a vacuum for what is already somewhat an often desolated space?
Salvatore: Yeah. An issue that the Providence Foundation hasn’t taken on in the past is transportation. So let’s start there. We believe that linking bus service and rail service is the right direction to move in, in terms of supporting the business community and transportation options for employees and employers. Thinking about Kennedy Plaza, there’s an opportunity to reimagine that space in a way that, again, is inclusive, but creates more green space in downtown Providence. So again, we believe that this could be another economic asset to attract more visitors and residents downtown. But let’s start with transportation and the economic benefits of creating a transportation system that works for everybody.
Donnis: I have a question related to your previous time as President of the Providence City Council. There’s been an unprecedented amount of turnover on the council in recent years due to the implementation of term limits. Do you think term limits has ultimately been a good or not so good thing for politics in Providence and on the council?
Salvatore: Yeah, just looking back, institutional knowledge, uh, was, was critical when I was a member of the city council. I remember when I was first elected, the turnover was relatively high. I think there was seven new council people in 2011 when I was elected. This is where the Providence Foundation has an opportunity to educate council members on what is going to ultimately benefit not only downtown, but the residential neighborhoods, as well. I have a lot of respect for the city council and the members and the Providence Foundation looks forward to sustaining and building new relationships with some of the newer members.
Donnis: What is on the top of your legislative agenda for the remainder of the General Assembly session?
Salvatore: There is a bill at the State House that’s being deliberated that would not only make it easier, but address the very high commercial property tax rate around residential conversions in downtown Providence. So we’re actively supporting that bill in addition to the Rebuild Rhode Island Tax Credit, which has been an asset to a lot of the development you see, not only downtown Providence, but across the state. So we’re actively supporting that bill, as well.
Donnis: If Providence was to reduce the commercial tax rate, how would it make up that revenue?
Salvatore: Well, again, I think you would see property values increase in downtown Providence, and that provides for more revenue for the city’s budget. Again, Providence has not been competitive in this space in a very long time. We do support the mayor’s effort to create new classifications in this city budget around not only commercial property, but commercial properties that have more than six residential units. I think creating, again, that predictable classification of tax rates will address some of the budgetary concerns while filling these vacant commercial space with spaces with full-time residents.
Donnis: Alright, we’ve gotta leave it there. Thank you so much for joining us. Executive Director of the Providence Foundation, David Salvatore.
Salvatore: Thank you, Ian.
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Many Americans think of Memorial Day weekend mostly as the unofficial start of summer. The holiday is actually meant to honor the sacrifice of Americans who paid the ultimate price while serving in the Armed Forces. That’s something to consider as we gather with friends and family this weekend. My Friday TGIF column is taking the week off and will return next week.
That’s it for our show. Political Roundtable is a production of The Public’s Radio. Our producers this week are Joe Tasca and James Baumgartner. Our editor is Alex Nunes. I’m Ian Donnis, and I’ll see you on the radio.
