Providence, Rhode Island and the owner of the Providence Biltmore Hotel are in a legal battle over a revised property tax bill. The dispute is related to a tax stabilization agreement city officials made with the hotel developers who purchased the marquee hotel in 2012. The city claims the hotel's owner owes more than $1.3 million in property taxes, interest and penalties, while the owner argues that the nearly $250,000 they have paid so far is all they are obligated to pay under the agreement. Superior Court Judge Michael A. Silverstein, who is ruling over the legal case, said it could have serious implications for dozens of property tax stabilization agreements Providence has signed dating back 20-plus years.
Providence, Rhode Island is reviewing dozens of tax breaks for commercial properties to determine whether or not the deals are actually benefiting the financially struggling city. Since Mayor Angel Taveras took office in January 2011, a least a dozen of tax-stabilization agreements have been approved, which were worth approximately $1.5 million in tax savings during 2012 and will yield at least $17 million in tax savings over their lifetime. In an effort to boost development in Providence, the mayor has also stated that he'd like to freeze the commercial tax rate for a number of years.
Providence, Rhode Island property owners paid the highest commercial property tax rates in any of the nation's 53 biggest cities in 2011. According to the Lincoln Institute of Land Policy and the Minnesota Taxpayers Association, cash-strapped Providence slapped a tax bill of $4,975 on commercial property worth $100,000 - $69 more than the second-ranked Des Moines and $75 more than third-ranked Detroit.
The Tax Foundation, a non-profit research group that is dedicated to educate taxpayers about tax policy and burden, has complied a ranking of all 50 states regarding solely their respective tax issues. The study statistics include property taxes, corporate taxes, individual income taxes, sales taxes, and unemployment insurance taxes. The premise behind the study was that taxes do make a difference as to where a company will locate, and that states do change tax policies to attract business.
Compared to the same period last year, commercial real estate sales and leasing in Rhode Island have shown multiple signs of improvement in the first half of 2012. Prices, however, still remain stagnant. According to PBN.com via Capstone Properties, sale and leasing activity in the first six months of the year was broader based and spread out over more categories and sizes. The lack of price increases remains a concern, but the re-entry into smaller markets calls for optimism.
Benchmark Senior Living will add their 34 senior housing communities to Health Care REIT's portfolio, combining to form an $890 million partnership between the two companies. Health Care REIT will have 95% partnership interest to Benchmark's 5%. According to GlobeSt.com, the partnership will continue to enhance Health Care REIT's growth potential as Benchmark has been able to produce exceptional NOI growth despite a rough economic client.