A Public Hearing on the following proposed Ordinances will be held before the Finance Committee on Monday, March 6, 2023 at 7:00 p.m. in the City Council Chambers, City Hall, 869 Park Avenue, City Hall, Cranston, R.I. pursuant to Section 3.12 of the Charter, in accordance with the RI General Laws Chapter 45-24-53 for the purpose of considering the following items listed on the agenda. Remote participation is also available by using the logon information provided below as posted on the City’s website at www.cranstonri.gov and Secretary of State’s website at www.sos.ri.gov.
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Complete copies of proposed Ordinances are available for public review at the City Clerk’s Office, and the Cranston Central Library and the City’s website cranstonri.com under calendar by clicking on the meeting date.
“Individuals requesting interpreter services for the dear or hard of hearing must notify the City Clerk’s Office at 461-1000 ext. 3197 seventy-two (72) hours in advance of the hearing date.”
John P. Donegan
Finance Committee Chair
Rosalba Zanni
Acting City Clerk
PROPOSED ORD. 2-23-07 IN AMENDMENT OF TITLE 3 OF THE CODE OF THE CITY OF CRANSTON, 2005, ENTITLED “REVENUE AND FINANCE”, CHAPTER 3.97.030 – FIFTEEN (15) YEAR ECONOMIC DEVELOPMENT TAX INCENTIVE PROGRAM FOR PROPERTY LOCATED AT 661 PARK AVENUE AND 271 DORIC AVENUE (Tax Stabilization Agreement)
It is ordained by the City Council of the City of Cranston as follows:
WHEREAS, Legion is the owner of certain real property located in the City at 661 Park Ave. and 271 Doric Ave., also known as Assessor’s Plat 3-3 Lot 289, 291, 1695 and 1696
WHEREAS, Legion has proposed and promised to rehabilitate a structure and/or improvement on its property creating multi-family and light retail/commercial spaces in the commercial building, thus returning the property to productive commercial use in accordance with the construction plans already submitted to the City by Legion; and
WHEREAS, Under article 13, section 5 of the Rhode Island Constitution, the General Assembly retains exclusive power over matters relating to municipal taxation. Notwithstanding, and pursuant to Rhode Island General Laws § 44-3-9, the General Assembly has authorized the City of Cranston, acting through its City Council and subject to certain enumerated conditions, to exempt or determine a stabilized amount of taxes to be paid on account of real and personal property for a period not to exceed fifteen (15) years; and
WHEREAS, the granting of the tax stabilization will inure to the benefit of the City of Cranston and its residents by reason of:
(A) The willingness of Legion to rehabilitate and redevelop the building into a multi-family and light retail/commercial development site, thereby improving the physical plant of the City, which will result in a long-term economic benefit to the City and State; and
(B) The willingness of Legion to committee by agreement to make a significant investment in the above-referenced property, which will enhance the tax base of the surrounding area, and generate significant tax revenues for the City of Cranston.
NOW THEREFORE, in consideration of the mutual agreements and promises set forth herein and other good and lawful consideration the receipt of which is hereby acknowledged, the parties agree as follows:
SECTION 1. DEFINITIONS.
“Property” shall mean certain real property together with any and all buildings, structures, and/or improvements now or in the future located in the City at 661 Park Ave. and 271 Doric Ave., also known as Assessor’s Plat 3-3 Lot 289, 291, 1695 and 1696.
“Property Owner” shall mean Legion, or any entity with legal or equitable right and/or interest in and/or to the Property, including any and all successors and assigns.
SECTION 2. TAX STABILIZATION.
Section 2.1. Grant. The City, in accordance with R.I.G.L. § 44-3-9 and the City of Cranston Code of Ordinances, does hereby grant a fifteen (15) year tax stabilization in favor of the Property Owner with respect to the Property.
Section 2.2. Term. The tax stabilization term shall be the period commencing on December 31, 2023 and terminating on December 31, 2037 (Tax Years 2024- 2038).
Section 2.3. Plan. During the tax stabilization term as defined in Section 2.2 above, the City has determined the stabilized amount of taxes to be paid by the Property Owner with respect to the Property, notwithstanding the valuation of the Property or the then-current rate of tax as follows: For tax year 2024, the Property shall be assessed at the then-current assessed value of the Property as of December 31, 2022 which is $1,274,100.00 multiplied by the then-current rate. For tax years 2025 through and including tax year 2027, the Property Owner shall make a tax payment equal to the taxes due and owing for an assessment value of $ 1,274,100.00 multiplied by a tax rate of $27.77 per $1,000.00 in assessment value (hereinafter the “Base Assessment”). For each tax year thereafter, the Property Owner will pay a percentage of the taxes due and owing on the then-current assessed value of the Property multiplied by the then-current rate. See “Tax Stabilization Plan” incorporated herein as if fully reproduced and attached hereto and as Exhibit A.
Section 2.4. Payment Deadlines. During the tax stabilization term as defined in Section 2.2 above and in accordance with the tax stabilization plan outlined in Section 2.3 above, stabilized tax payments shall be made in either a lump sum during the first quarter of the applicable tax year or in equal quarterly installments at the discretion of the Property Owner. If the Property Owner elects to make quarterly installments, each quarterly installment shall be due on the same date that quarterly taxes are due for all other taxpayers in the City of Cranston.
Section 2.5. Obligation of Property Owner to Make Payment. During the tax stabilization term as defined in Section 2.2 above and in accordance with the tax stabilization plan outlined in Section 2.3 above, stabilized tax payments shall be an obligation of the Property Owner. It is understood that the stabilized tax payments made hereunder are deemed by the City to be tax payments, and the Property Owner shall be entitled to all of the rights and privileges of a taxpayer in the City, including, without limitation, the right to challenge and appeal any assessment and/or reassessment.
Section 2.6. Non-Receipt of Stabilized Tax Bill. Failure by the City to send or failure by the Property Owner to receive a stabilized tax bill does not excuse the nonpayment of the stabilized tax nor affect its validity or any action or proceeding for the collection of the tax in accordance with this Agreement or otherwise.
Section 2.7. Recording of Agreement, Running with Land. Upon the execution of this Agreement, the Property Owner shall cause this Agreement to be recorded at its expense in the City’s official public land evidence records. This recording shall be construed to provide a complete additional alternative method under contract law for the securitization of payments due and owing under this Agreement and shall be regarded as supplemental and in addition to the powers conferred by other state and local laws.
SECTION 3. PERFORMANCE OBLIGATIONS.
Section 3.1. Permits and Certificates of Occupancy.
Property Owner shall obtain all permits and certificates of occupancy as required by state and local law in connection with any and all intended construction or rehabilitation at the Property.
SECTION 4. TRANSFER OF THE PROPERTY.
Section 4.1. Transfer Generally. Stabilized tax payments shall be an obligation of the Property Owner during the tax stabilization term as defined in Section 2.2 above and in accordance with the tax stabilization plan outlined in Section 2.3 above, without regard to any transfer of the Property. Additionally, in accordance with Section 2.7, the burdens and benefits of this Agreement will run with the land, and as for payment of taxes shall run in favor of the City regardless of any transfer of ownership. The Property Owner shall have the right to transfer the Property subject to any provisions in this Agreement, including Sections 4.2 and 4.3. The Property Owner further agrees to provide prior written notice to the City before any transfer of the Property.
Section 4.2. Transfer to Tax Exempt Entities. In the event that the Property Owner transfers the Property to a tax-exempt entity, this Agreement shall be void ab initio and any entity holding an equitable or legal interest in the Property on or after the Effective Date of this Agreement shall be jointly and severally liable for the full taxes due and owning from the Effective Date of this Agreement and forward.
Section 4.3. Post-Expiration Transfers. In the event that any Property Owner transfers the Property to a tax-exempt entity within five years from the end of the tax stabilization term, as defined in Section 2.2 above, any and all Property Owners will pay the following: five percent (5%) of the sale price in said transfer if sold to a tax-exempt entity in the first year following the end of the Term; four percent (4%) of the sale price in said transfer if sold to a tax-exempt entity in the second year following the end of the Term; three percent (3%) of the sale price in said transfer if sold to a tax-exempt entity in the third year following the end of the Term; two percent (2%) of the sale price in said transfer if sold to a tax-exempt entity in the fourth year following the end of the Term; and one percent (1%) of the sale price in said transfer if sold to a tax-exempt entity in the fifth year following the end of the Term.
SECTION 5. DEFAULT.
The following events shall constitute an event of default hereunder:
(A) Failure of the Property Owner to pay any amount due under or with respect to the tax stabilization in accordance with Section 2 above; or
(B) Failure of the Property Owner to record this Agreement as required by and in accordance with Section 2 above; or
(C) Failure of the Property Owner to meet any of the performance obligations set forth in Section 3 above; or
(D) Failure of the Property Owner to annually report as required by Section 9 below; or
(E) Failure of the Property Owner to notify the City in writing prior to the transfer of the Property; or
(F) Transfer of the Property by the Property Owner outside of the terms of this Agreement; or
(G) Failure of the Property Owner to comply with any other obligation or promise contained within any section or subsection of this Agreement; or
(H) Failure of the Property Owner to comply with all state and local law regarding building and property maintenance codes, zoning ordinances, and building and/or trade permits; or
(I) Failure of the Property Owner to remain current on any and all other financial obligations.
SECTION 6. NOTICE AND CURE.
Section 6.1. Notice and Cure Period. The City shall provide written notice to the Property Owner before exercising any of its rights and remedies under Section 8 below. The Property Owner shall have ninety (90) days to cure any alleged default under this Agreement, provided, however, that if the curing of such default cannot be accomplished with due diligence within ninety (90) days, then the Property Owner shall request an additional reasonable period of time from the City to cure such default as may be necessary provided that the Property Owner shall have commenced to cure such default within said period, such cure shall have been diligently pursued by the Project Owner and the City does not reasonably deem the taxes jeopardized by such further delay, all as determined by the City in its sole discretion, which shall not be unreasonably withheld.
Section 6.2. Agreed Upon Address for Purposes of Written Notice. All notices, requests, consents, approvals, and any other communication which may be or are required to be served or given (including changes of address for purposes of notice) shall be in writing and shall be sent registered or certified mail and addressed to the following parties set forth below:
If to:
City of Cranston
Office of the City Clerk
869 Park Ave
Cranston, RI 02910
*Accompanied by 9 copies
If to:
Legion Development, Inc.
c/o John O. Mancini. Esq.
56 Pine Street, 3rd Floor
Providence, RI 02903
SECTION 7. RIGHTS AND REMEDIES.
Section 7.1. Collection of Taxes. At any time during the tax stabilization term as defined in Section 2.2 of this Agreement, the City of Cranston may pursue any and all rights and remedies arising under any state or local law, including but not limited to Chapters 7-9 of Title 44, and/or arising under this Agreement to collect stabilized taxes due and owing in accordance with the tax stabilization plan outlined in Section 2.3 above and/or to collect retroactive taxes pursuant to Section 8.1 above.
Section 7.2. City’s Lien Remedies and Rights. Nothing herein contained shall restrict or limit the City’s rights and/or remedies with respect to its first priority lien for taxes as provided under Title 44 of the Rhode Island General Laws. Rather, this Agreement shall be construed to provide a complete additional alternative method under contract law for the collection of taxes, and shall be regarded as supplemental and in addition to the powers conferred by other state and local laws.
Section 7.3. Property Owner’s Rights. During the tax stabilization term as defined in Section 2.2, the Property Owner agrees to waive and forever forgo any and all of its rights and privileges under Title 44 of the Rhode Island General Laws, as they pertain to the Tax Payments due and owing pursuant to this Agreement. Nothing herein shall be construed to limit the right of the Property Owner to pursue its rights and remedies under the terms of this Agreement.
Section 7.4. Waiver. Failure or delay on the part of the City to exercise any rights or remedies, powers or privileges at any time under this Agreement or under any state or local law shall not constitute a waiver thereof, nor shall a single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, remedy, power of privilege thereunder.
SECTION 8. MISCELLANEOUS TERMS.
Section 8.1. Annual Progress Report. The Property Owner shall provide annual reports to the City on its progress in complying with the provisions of this Agreement. Specifically, its report shall include a performance report on rehabilitation and/or improvements with evidence of final construction costs, status of stabilized tax payments, evidence of employment compliance pursuant to Section 6 above, and overall financial well-being. Upon receipt and review, the City may require and request additional information.
Section 8.2. Resolution of Calculation Disputes. Property Owner and the City of Cranston agree that Property Owner retains the right to appeal the valuations of the Property or calculation of the taxes assessed from time to time.
Section 8.3. Severability. The sections of this Agreement are severable, and if any of its sections or subsections shall be held unenforceable by any court of competent jurisdiction, the decision of the court shall not affect or impair any of the remaining sections or subsections.
Section 8.4. Applicable Law. This Agreement shall be construed under the laws of the State of Rhode Island, the City of Cranston Home Rule Charter, and the City of Cranston Code of Ordinances, as amended.
Section 8.5. Modifications Amendments and/or Extensions. This Agreement shall not be modified, amended, extended or altered in any way by oral representations made before or after the execution of this Agreement. Any and all modifications, amendments, extensions or alterations must be in writing duly executed by all parties.
Section 8.6. Entire Agreement. This Agreement and all attachments, addenda, and/or exhibits attached hereto shall represent the entire agreement between City and the Property Owner and may not be amended or modified except as expressed in this document.
Section 8.7. Effective Date. This Agreement shall take effect upon execution by all parties.
(Remainder of Page Left Intentionally Blank)
IN WITNESS WHEREOF, Legion Development, Inc. and the City have executed this Agreement.
Sponsored by Councilman Ferri
Co-sponsored by Councilwoman Renzulli
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