Ric Santurri: Taveras’ Providence Problem

Wednesday, July 23, 2014

Ric Santurri, GoLocalProv MINDSETTER™

 

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In political campaigns, a good narrative is essential.  The average voter has little time and energy to devote to politics, so getting this voter to see and buy your little snippet about yourself is key.  You must define yourself effectively and succinctly while fending off opponents' attempts to negatively define you. 

Angel Taveras became mayor of Providence by defining himself successfully in 2010.  He was the Head Start to Harvard candidate, a cross culture wonder who could appeal to both Broad Street and Blackstone Boulevard.  Taveras ran with the benefit of no previous record as an elected official, which gave opponents very little attack fodder. He also wasn't running against a candidate with the funding firepower of Gina Raimondo.   Now running statewide, Taveras is going to need something more than the clever Head Start to Harvard tag. He will have to run on his record and defend attacks against it. 

THE “IRONWORKER” SALVO

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Taveras has consistently polled statewide as the politician with the highest approval rating, and opponent Raimondo must work to chip away at that rating.  Considering the stagnant economy in Providence, Taveras' record on economic development is a logical place to start.  Raimondo kicked off her negative ad campaign with her recently released “Ironworker” ad.  It features quintessential blue collar worker Rich Scalzi lamenting that even with his 30 years of experience, he hasn't worked in Providence for three years because Taveras “jacked up commercial property taxes.”  The ad alleges that Taveras' 2011 tax increase (which included an increase in the commercial rate from $30.75 per $1,000 of value to $36.75) put a grinding halt to big commercial projects being constructed in Providence.

The 2011 tax increase had little effect on commercial construction in Providence for the simple reason that almost every good sized development in Providence is either by a tax-free non-profit, or is gifted an extremely generous Tax Stabilization Agreement (TSA).  Unlike Cranston and Warwick, where for-profit developers undertake projects without city corporate welfare,  Providence is all too happy to dole out ten plus year tax giveaways for big commercial projects.  One could argue that the high commercial tax rate in general scares off developers, like this New Yorker who contemplated an I-195 Link project, but in practicality, almost all who build big projects in Providence get at least a decade of cut rate taxes.   

Of course, in politics it really doesn't matter if the Ironworker ad is 100 percent accurate or not. What matters is if the ad is effective.  The biggest issue facing RI is the economy and Raimondo is painting Taveras as a failure because he didn't grow Providence's economy.  Over the last three plus years, there has been very little private sector big project construction in Providence.  The only visible private sector growth, unfortunately, is the scrap metal business on the waterfront on the south side, which isn't a high job density industry.  Don't be surprised to see an attack ad feature a downtrodden scrounger pushing a shopping cart packed with scrap metal in front of a huge pile of scrap on Providence's waterfront with the caption “Is This Taveras' Idea of Economic Development?”

PROVIDENCE TAX GIVEAWAYS

Taveras doesn't have a great record to tout regarding economic development.  In 2011, the Providence City Council gave him carte blanche to unilaterally grant ten TSAs, but Taveras got very little in the way of job growth with them.  Taveras' big get, Hasbro's move from Pawtucket to downtown, came with a promise of 281 new jobs created.  That huge TSA costs the city at least $874,000 a year in tax revenue for a dozen years.  Instead of the promised new jobs, Hasbro has cut jobs.  Where else do $25 million commercial buildings pay less than $50,000 a year in property taxes besides Providence?  In early 2014, under former chief of staff Michael D'Amico, the administration began to push back a bit on Providence developers' unquenchable thirst for tax giveaways, but as the election neared, Taveras recently supported a bunch of them, mostly for apartments.  He is currently supporting an ordinance to give a downtown developer who has already benefited from a ten-year TSA as well as a five-year extension another five-year extension, even though the projects are completed and no discernible job growth will come from the extension. 

Announcing big construction projects is great politics, but building apartments isn't great economic development when those apartments aren't going to generate significant tax dollars for a decade or more.  When you combine big state and federal historic tax credits with the huge property tax gift from the city, why wouldn't a developer build in Providence?  The taxpayer is subsidizing a hefty portion of your project.  In a state where voters are virulently against government subsidies after the 38 Studios debacle, Taveras could be vulnerable in this area, even though a TSA is much different than a direct taxpayer backed loan. 

Taveras also has to defend his record as head of the Providence Economic Development Partnership, with its poor performance and heavy investment in restaurants over businesses that generate better paying jobs. Just as Taveras inherited a city in financial trouble, he inherited this agency with all kinds of problems.  However, there certainly have been enough problems under his watch to cobble together an effective negative campaign ad.  

DEFINING TAVERAS

As voters statewide begin to form a more informed opinion of the Providence mayor, Raimondo will try to define Taveras as an abject failure regarding economic development.  With a $2-plus million fund raising advantage, she has the weapons to succeed.  She's been carpet bombing local television with Let Me Show You A Little Bit About Myself ads for almost two months, to the point where you shake your head when another Raimondo ad pops up.  The Ironworker ad is the first salvo in the attack ad arms race. Once Raimondo starts delving into Providence tax giveaways to private developers, in this post 38 Studios environment, Angel Taveras must be ready to fire back and defend his record.  Tax increases, corporate giveaways, and scrap metal piles aren't the three pillars of successful economic development.  If Taveras doesn't successfully define himself regarding economic development, Raimondo will gladly do so.

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Ric Santurri is a Providence real estate investor and broker.  A graduate of the URI School of Journalism, he has been involved in RI politics for over three decades.  The past few years, Ric has been keenly focused on Providence, mainly budget and tax policy, politics and elections, and quality of life issues.  Feel free to send comments, tips, and info to [email protected]

 

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