For the last two weeks, Ward 13 Councilman John J. Lombardi has been working with Law Department staff to ensure that taxpayers’ interests are protected in any renegotiation of the Capital Cove, LLC tax stabilization agreement.

“I am concerned about the precedent renegotiating the agreement would set, especially considering that the developers announced their intention to violate the agreement before approaching the City,” said Lombardi in a letter to the City Solicitor. “As a public official elected to protect taxpayers’ interests, I have strong reservations about any actions that reward those who break agreements and then expect to be immediately forgiven.”

The developers of Capital Cove agreed to a tax treaty with the City of Providence in 2005 but recently announced their intention to lease part of the property to Johnson and Wales University to be used as a dormitory, in violation of the tax stabilization agreement. The Law Department plans to present the City Council with alternatives to the developer’s forthcoming petition for relief from the dormitory prohibition.

Councilman Lombardi explained that the tax stabilization was initially granted because the Council saw the merit in the development’s proposed mixture of commercial and residential uses. “The recent action is a complete departure from the original purpose of the development. The provision against student housing was included specifically because the Council wanted to ensure the tax incentives were going toward the intended purpose,” said Lombardi.

The councilman stressed that the recent events do have a silver lining for Providence’s taxpayers. “The City has an opportunity to both reexamine how it handles tax stabilizations and to apply new innovations to our relationship with non-profits,” said Lombardi. “I would urge the City to make the reevaluation of Capital Cove a comprehensive and inclusive discussion of the whole host of issues that plague the Providence tax base.”