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City Council OKs tax treaty for car rental business

December 9, 2011

PAWTUCKET — Calling it a “win-win” situation that the city should seek more of, the City Council on Wednesday approved a five-year tax treaty for a car rental business that will bring in $1 million in revenue.
According to city Tax Assessor David Quinn, the owners of Richmond Motor Sales, of Providence, approached the city about relocating the headquarters for their short-term rental car business to 519 Pawtucket Avenue. The owners had originally asked for a tax treaty of 10 or more years, but through negotiations with the city, an agreement was reached on a five-year tax break plan.
Quinn told the council that, under the plan, the company will pay the city $200,000 a year for five years and encompassing up to 500 cars, in lieu of paying the motor vehicle excise to the city on each individual car. Quinn said this amount was derived through negotiations between his office, the administration and the Finance Committee based on an $11,000 average value of each vehicle and an estimate of how many cars the company would be keeping on the lot.
If the number of vehicles on the lot exceeds 500, Richmond Motor Sales has agreed to pay the city an additional $450 per vehicle, per year.
Quinn told the council that both the five-year agreement and the $200,000 per year figure represented a “happy medium” that was reached between the parties. He said that while 500 individually registered vehicles could have amounted to $300,000 to $350,000 in car tax revenue with no tax treaty, the company did not always know how many vehicles would be kept on the lot and this dollar figure could be less.
He said the $200,000 per year for five years is guaranteed revenue, on top of $8,000 per year in property taxes for the building and lot.
Prior to the vote, Councilor Lorenzo Tetreault had said he was hesitant to grant a tax treaty since the company could not provide Quinn with an actual number of vehicles that would be on the lot. “We don't know how much of a tax break we're giving,” he said. However, he later supported the measure.
Councilor Thomas Hodge initially suggested an amendment to require a review of the treaty after three years, saying that the city had been involved in some long-term tax agreements in years past that didn't turn out well. However, he withdrew his request and also voted in favor of the treaty.
Before the vote, Anthony Pires, acting director of administration for Mayor Donald Grebien, urged the council to not place any amendments on the treaty as presented, saying that it represents an understanding between two parties. He added that “the administration sees this as a first step in, hopefully, a number of other tax treaties.”
A majority of the council voiced support for the tax treaty and said that more such arrangements should be undertaken to bring new businesses into the city. Councilor Jean Philippe Barros said, “To me, this is a no-brainer,” and Councilor Christopher O'Neill noted that Richmond Motor Sales could have gone to another city that has a lower motor vehicle excise tax rate than Pawtucket. Councilor Mark Wildenhain agreed, noting, “We either bring business in or we turn it away.”
In other matters, the council unanimously backed Tetreault's requests to have the controversial Special Economic Project Coordinator's position memorialized in writing by the city solicitor and then have the position certified by the city's Personnel Board, in accordance with the City Charter. The council also agreed with Tetreault's request to the city's Finance Department that all expenses associated with the Special Economic Project Coordinator's job be reported to the mayor's budget rather than the Planning Department.
The Special Economic Project Coordinator's position was created last spring by the Grebien administration to help spur economic development in the city and has been handled by arts historian and antiques dealer Richard Kazarian. Kazarian, a Pawtucket native who has long been active on city boards and commissions, is being paid a reported $1,000 a week.
The Grebien administration has sought an Ethics Commission ruling on whether or not private funding can be solicited from businesses and other sources to pay Kazarian's salary, but a decision is still pending.
Tetreault has been raising questions for several months about the how the Special Economic Project Coordinator's job is being funded and why the position was not brought before the City Council to be approved or certified by the city's Personnel Board.
On Wednesday, Tetreault resumed his query, saying that he recently received information that $20,200 of the Special Economic Project Coordinator's salary was being paid out of the Planning Board budget under “temporary services.” Tetreault told the council that since this person reports to the mayor, not Planning Director Michael Davolio, the planning chief should not have to account for this expense in his budget.
While acknowledging Tetreault's right to ask questions, Barros asked his fellow councilor, “What are we looking to get?”, to which Tetreault responded, “I want to know how this position came about without City Council approval and without certification by the Personnel Board.”
Pires addressed the council in defense of the Special Economic Project Coordinator's role, saying that there have been “very transparent and open discussions on how Mr. Kazarian would be funded.” He said the mayor felt strongly that he could not delay on an aggressive economic development effort and thought that with Kazarian's experience in the development of the waterfront, downtown and arts scene, it made perfect sense to tap him for the role. He added that the city of Providence this year hired an economic development director at $150,000 and suggested it was “a very noble gesture” on Kazarian's part in taking a job with a salary so far below market value.
Pires said that Kazarian had provided a list of his accomplishments to the council as requested, and that this included his involvement in the recent sale of the American Insulated Wire building to a residential developer, the sale of the Armory to a developer, two micro-breweries that are coming to the city and other buildings that are actively being marketed. He added that the administration is waiting for a decision from the Ethics Commission on the public/private funding matter, and told the council that “sometimes, you have to make certain risky decisions and do things a little differently.”
Pires concluded his strongly worded speech to the council by asking them to “please, never question the integrity of Mr. Kazarian or the intentions of the mayor” when it comes to the Special Economic Project Coordinator's position.
Pires' words drew a swift response from City Council President David Moran, who said he didn't think Tetreault intended to criticize or malign Kazarian, but rather, just wanted to have some of his questions answered about the job and its funding source.
Tetreault also responded by saying, “In no way am I trying to take to task the integrity of Mr. Kazarian.” He said he was simply questioning “the process by which this position just happened” and
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noted that it had taken him several meetings and numerous letters to find out that funds were being billed to the Planning Department.
Additionally, Wildenhain defended the council's right to know more about the way the job is being funded, particularly since it was set up one way and now is being handled differently. He told Pires that the board “appreciates the value of Mr. Kazarian, but we don't appreciate the way that things were being done to fund this position.”
Councilor Thomas Hodge told Pires that he supports “anyone on the board who is trying to get questions answered.” He added, “This is more about the process. Nobody could give this council an answer on where this money was coming from.”
Moran added that Kazarian, who was not present at Wednesday's meeting, was welcome to come before the council and air his feelings on the matter.
Also, the council voted to support a resolution regarding a maintenance agreement for the Ten Mile River Bike Path project. The Rhode Island Department of Transporation is undertaking the construction of a bicycle path from the Tomlinson Sports Complex to Armistice Boulevard as part of the “Ten Mile River Greenway” project.
Prior to the approval, Wildenhain told Planning Director Miahcel Davolio that he wanted a public hearing held on the project because it could affect residents of Parkside Drive and some other residential streets in his district.
Davolio responded that he intended to hold several neighborhood meetings on the proposed construction to avoid the types of conflicts that occurred recently involving bike path road and parking changes in the Oak Hill neighborhood.

 

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