Providence Industrial & Commercial District (ICBD):
Review of Incentives and Regulations

Overview of Programs and Incentives
City, state and federal governments are presently cooperating with local nonprofit, corporate interests, developers, artists and other constituencies to develop legislation, economic incentives, surveys and programs to encourage the preservation of the city’s industrial heritage. There have been a number of local and federal initiatives established to address the growing concern surrounding the city’s historic industrial sites. The following include such entities and the legislation currently dedicated to the preservation and revitalization of the City’s historic commercial districts.

A. Industrial Commercial Buildings District (ICBD)

Providence has developed the non-contiguous Providence Industrial and Commercial Building District, the first thematic local historic district in the country. To accomplish this, the Providence Preservation Society (PPS), with funding in part provided by a Certified Local Government (CLG) grant from the State Historic Preservation Office (SHPO), has completed a survey of over 220 industrial and commercial buildings in Providence. PPS has been working in cooperation with the Mayor’s Office, the Providence Department of Planning & Development, and the Rhode Island Historical Preservation & Heritage Commission (RIHPHC). The project is designed to provide the documentation necessary to consider the sites for inclusion in the new Providence Industrial and Commercial Historic District. To date, only a small number of surveyed properties have not met the criteria for inclusion. Ongoing work is being done to identify more industrial sites of concern throughout the city.

Buildings within the ICBD fall under the purview of the Providence Historic District Commission (PHDC). The HDC was established in 1960 to preserve buildings and districts that reflect elements of the City’s cultural, social, economic, political and architectural history. The first historic district, College Hill, has been expanded to include seven separate districts throughout the City. The PHDC reviews proposed work affecting the exterior appearance of each structure, site or its appurtenances designated as a landmark building or district including major alterations, additions, and demolition. A Certificate of Appropriateness is required before commencing any of the exterior work listed above. Building permits for exterior work on a landmark building or in a district cannot be issued without a Certificate of Appropriateness.

For a list of properties included in the ICBD and questions regarding the ICBD, please contact Jason Martin at the city planning office (401-351-4300).

B. Historic Preservation Investment Tax Credits

1. State Historic Preservation Tax Credit
This special incentive is a Rhode Island state income tax credit based on qualified rehabilitation expenditures incurred in the substantial rehabilitation of a certified historic structure. This Act is administered and regulated by the Historical Preservation and Heritage Commission (RIHPHC). The Commission reports to the Department of Administration and Division of Taxation, indicating whether or not a proposed rehabilitation qualifies for the Historic Preservation Tax Credit. The Rhode Island state tax credit equals 30% of the cost of approved rehabilitation work. In order to qualify the project must cost at least as much as half the value of the building.

More Information & Requirements:
http://www.rihphc.state.ri.us/credits/commercial.html

2. Federal Historic Preservation Tax Credit
The Federal Historic Preservation Tax Incentives program is one of the nation’s most successful and cost-effective community revitalization programs. Starting in 1976, the Federal tax code became aligned with national historic preservation policy to encourage private sector investment in the rehabilitation of buildings within the nation’s older commercial districts. The federal tax credit equals 20% of the cost of approved rehabilitation work. Properties eligible for this credit must be listed on the National Register of Historic Places, must be income producing and must be rehabilitated according to standards set by the Secretary of the Interior.
State tax credits may be combined with federal tax credits for historic preservation and housing. There are also various other incentives available to commercial constituencies and those private citizens who undertake the task of rehabilitating historic sites in Providence.

More Information & Requirements:
http://www.rihphc.state.ri.us/credits/commfed.html

C. Rhode Island Mill Building and Economic Revitalization Act (Mill Building Program Legislation, Title 42 State Affairs and Government, Chapter 42-64.7)

This program offers tax incentives to businesses for occupying and reusing vacant mill space. This program is meant to attract local businesses and private owners to invest in the rehabilitation of vacant mill buildings worthy of reuse. Under this act, cities and towns in Rhode Island can choose mill buildings with the most potential for redevelopment and present them to the state for certification. The mills must meet a certain set of requirements before they can be certified by the state. Once a mill has been certified, it becomes eligible for tax incentives.

Owners of certified mill buildings are offered a tax credit equal to 10% of the cost of the substantial rehabilitation of the mill. “Substantial rehabilitation” represents a cost of at least 20% of the market value of the property. Providence has six buildings certified for participation in the state’s mill program: A.T. Wall Co., 162 Clifford Street; Brown and Sharpe Foundry Building 4, 235 Promenade Street; Louttit Laundry Building, 93 Cranston Street; Phenix Iron Foundry Machine Shop, 115 Elm Street; Silver Spring Bleaching & Dyeing Co., 387 Charles Street (not extant); and Rau Fastener Co., 102 Westfield Street. All these buildings are also located within Enterprise Zones (see below).

More Information & Requirements:
http://www.riedc.com/growth/zones/entzoneframe.html

D. Brownfields Revitalization and Environmental Restoration Act of 2001
The Brownfields Bill amends the Comprehensive Environmental Response, Compensation, and Liability Act of 1980 (CERCLA) -- legislation that offers grants to eligible organizations (including local government units, redevelopment agencies, States, and Indian tribes) for inventorying, characterizing, assessing, remediating, and conducting planning related to brownfields sites. Brownfields are defined as industrial properties that can not be redeveloped due to the potential presence of a hazardous substance or pollutant

More Information & Requirements:
http://www.epa.gov/swerosps/bf/gdc.htm

E. Additional Tax Incentives Available to For-Profit Property Usage in ICBD

1. Enterprise Zones Tax Incentive: RIGL 42-64.3
A taxpayer who owns a certified business facility within an area designated by the Enterprise Zone Council may qualify for several incentives.

Designated Areas: The State of Rhode Island has designated eleven “Enterprise Zones” to foster economic growth in distressed urban areas. These zones include parts of Bristol, Central Falls, Cranston, Cumberland, East Providence, Lincoln, Portsmouth, Providence, Tiverton, Warren, Woonsocket and West Warwick. Federal enterprise zones or enterprise communities qualify for all benefits afforded to state enterprise zones as of July 1, 1998.

More Information & Requirements:
http://www.riedc.com/growth/zones/entzoneframe.html

RI General Law: http://www.rilin.state.ri.us/Statutes/TITLE42/42-64-3/INDEX.HTM

All Businesses applying for Enterprise Zone Credits Must Complete the Application for Certification:
http://www.riedc.com/growth/zones/ezones/EZapplication.pdf

2. Business Tax Credit:
A business which has been certified by the Enterprise Zone Council is allowed a credit against chapters 44-11, 44-14, 44-17 and 44-30; Rhode Island General Laws. The credit is 50% of the Rhode Island salaries and wages paid only to those newly hired enterprise job workers comprising the employees included in the “5% growth test” used for certification by the council. If the certified business received Federal or State assistance for any of the enterprise job, wage of workers for whom the credit is claimed must be reduced by the amount of assistance received by enterprise. The maximum credit for each worker is $10,000. Beginning in the 1999 certification year, firms qualifying for the enterprise zone were entitled to a Business Tax Credit equal to 75% of total wages paid to employees who live in an enterprise zone. This incentive is only available to companies who increase total company employment by 5% within a Rhode Island enterprise zone.

3. Tax Credit for Donations:
A taxpayer is allowed a 20% credit for donations to publicly supported improvement projects in the designated zone. The maximum credit is $10,000 per year and cannot reduce the tax below the minimum. The taxpayer shall not receive credit to offset any existing tax liabilities in years other than the year in which the taxpayer qualifies for the credit. Taxpayers are required to claim the credit in the year the donation is made.

More Information and Requirements:
http://www.riedc.com/growth/zones/ezones/ez tax credit.htm

Tax Division Form and Instructions (ZN-05):
http://www.tax.state.ri.us/forms/1999/misc/zn05.pdf

RI General Law: http://www.rilin.state.ri.us/Statutes/TITLE42/42-64-3/INDEX.HTM

4. Lenders to Mill Building Businesses and Projects:
Lenders may receive a credit equal to 10% of the interest earned on loans to eligible mill building businesses (Maximum of $10,000 per taxable year). Lenders may also receive credit equal to 100% of the interest on loans solely and exclusively the purpose of substantial renovation of a certified mill building (Maximum of $20,000 per taxable year).

5. Tax Credit for New Mill Building Employees:
Eligible businesses located in a certified mill building meeting the requirements of Enterprise Zone year-end certification may receive credit equal to 100% of the wages paid to new employees with a maximum credit of $3,000 per new employee.

More Information and Requirements:
http://www.riedc.com/growth/zones/mbuildings/mills.html
RI General Law: http://www.rilin.state.ri.us/Statutes/TITLE42/42-64-7/INDEX.HTM

F. City of Providence Tax Stabilization Project:
The City of Providence may offer tax stabilization programs for rehabilitated facilities. For more information contact the City of Providence, Tax Assessor at #401-421-7740.

G. Other:

Providence Economic Development Corporation (PEDC):
Financial assistance is available through PEDC, low interest financing for start-up and existing businesses. For information on incentives and financing offered by the City of Providence call #401-351-4300.

HOME Program
The City’s HOME Program has funding available for the development of live/work space in these buildings. For information contact Ken Schadegg at #410-351-4300.

The Urban Mill Restoration and Tax Exemption Act (HR 7533)
Rhode Island’s mill buildings employed one-hundred-forty-thousand people at their peak in 1920 -more than half of the state’s workforce- and were among the largest and most productive factories in the world. These mill buildings have been recognized as an important part of the city’s heritage, so the Rhode Island State General Assembly has entertained a proposal for the revitalization of these properties through the provision of a tax exemption that will be offered to artists that endeavor to restore such property for their commercial and residential needs.