The House Budget dropped with several potential sources of financing for the $uperman building this week.

The Rebuild RI Tax Credit had a limit set of $150 million. This would easily take care of the $uperman Buildings asks. New changes made 195 projects eligible for these credits. Many noted the definition of I-195 Land included the $uperman Building in the defined area, possibly giving it a back door to the taxpayer dollars they so crave.  But the $15million per project remains.  (There is an exemption for I-195 Land for section (d) (1) (i) of the credit limits, but the $15mil max is in (d)(1)(ii) so I believe it still exists, someone educate me if I’m wrong). Commerce Secretary Stefan Pryor was quick to debunk this, saying the definition was an oversight, and will be corrected. I tend to believe him there, only because I don’t think the House hasn’t worked out what they want yet in return for this ask.

The Budget entry I am looking at is the Extension of the Historic Tax Credits. That program was set to expire in 2016 originally, and will now be extended one more year. This is where I believe they are leaving the window open for the $uperman Building.

​That would be in line with what I noted about the Governors projected new issuance of $75million in Historic Tax Credits. It seems that Commerce Corp is ready to issue those when called on as they put out an RFP for these in 2015. The RFP is titled ‘REQUEST FOR PROPOSALS FOR A DIRECT PURCHASE BY A FINANCIAL INSTITUTION OF A FEDERALLY TAXABLE BOND ISSUE’ and contains some good information on the Historic Tax Credit program the most significant being that in 2008 Commerce Corp was authorized to issue $356.2 million in bonds to support the “Historic Preservation Tax Credit Fund” but so far have only issued $150 million in bonds. That leaves 206 million taxpayer dollars to gift to developers like $uperman partners Cornish Associates and High Rock Development.
 
The pieces fit from my point of view. The Governor expects a new issuance in late 2018, Commerce Corp is assumedly ready to go from the RFP and they have $206 million to play with, and the House is extending the Historic Tax Credit Program. High Rock/Cornish publicly have indicated that they are not working on getting their funding this year, hard to believe after their big dog and pony press conference, but easier to swallow when you see the pieces falling in place. All that will be left next session is the legislation to grant them access to those funds, an easier task if legislators get to say no new funds were appropriated, they were able to leverage existing programs to bailout $uperman. 

​Is the Potential Source for $uperman Building rehab lurking in Raimondo’s Proposed Budget
Lurking on page C-26 of the Governor’s proposed 2017 budget is a Proposed Debt Issuance for the Historic Structures Tax Credits. The only note is a vague description referencing   $75 million to be issued in 2018. With a projected interest rate of 4.5%, this issuance is expected to cost the tax payers $92,862,767 when paid back over nine years.

Does this represent the public investment owner High Rock Development and their partner, Cornish Associates have been asking for, most recently at a high profile news conference which included Senate Majority Leader Dominick Ruggerio, and Providence Mayor Elorza. The $75 million amount is exactly what High Rock asked for in 2013. The method is also a match. Senate Majority Leader Dominic Ruggerio, who has received $2300 in donations from High Rock principal David Sweester, reported that talks are in process to raise the $15 million cap on real estate tax credits for this project.

High Rock’s partner Cornish Associates is very familiar with these types of tax credits. As in-house council for Cornish, Michael Corso worked with Gordon Fox drafting Historic Tax Credit Legislation. Corso, of course would later gain notoriety for his involvement with 38 Studios and Rhode Island motion picture tax credits (http://www.goloprov.com/news/investigation-fox-corso-and-38-studios )

Cornish has shown a consistent dependency on public subsidies since.  Recently, Cornish was gifted $6.1 million in Rebuild RI tax credits for an empty lot at 78 Fountain Street. They acquired the lot as part of their $7 million purchase of the Providence Journal building. The Journal Building itself at 75 Fountain Street had $3.25 million in tax credits attached to it, making the public investment over $9 million, or $2 million more than the purchase price, but with no ownership stake.

This year alone, the Rebuild RI tax credit has granted over $27 million public dollars to private developers who claim their investments are not feasible without public subsidies.

Is the Historic Structures Tax Credit in Governor Raimondo’s proposed budget the transfer of public funds the developers of the $uperman building have been asking for? This question needs to be answered by the Governor. It certainly fits the bill. It deserves a full fleshing out at a minimum. State Representatives and Senators need to be questioning this rather than participating in a petty back and forth with a fading newspaper. They cannot claim ignorance on this giveaway of 38 Studios proportions.  $92 million of tax payer funds being redistributed to developers and investors that claim their business models are not sustainable without constant injections of public cash. At least there was the promise of pay back with 38 Studios, even if it was fantasy. These tax credits are a gift.

The obnoxiousness of the ask demands the line be drawn at the $uperman Building.

The Governor’s proposed budget can be found here:  Governor's Proposed Budget f