WESTERLY — A proposed new ordinance would single out property owners who allow their holdings to remain unoccupied, unmarketed, or unkempt by imposing a tax on them.
The "real estate nonutilization tax" would be expensive: a charge of $10 per $100 of the assessed value, as determined by the municipal tax assessor. The city of Providence first adopted such a tax in 2008 and readopted it last year after it was allowed to sunset in 2011.
Town Councilor Sharon Ahern proposed the tax as a way to spur property owners who show little effort to market or keep up their properties.
"As you drive around town there are some fairly high visibility parcels that were just going to seed ... and there is no indication of movement or marketing," Ahern said during a recent interview.
Specifically, Ahern pointed to a stretch of land Franklin Street, from 64 to 84 Franklin St. The property, which is owned by the Carpionato Group, of Johnston, has sat vacant since 2014, when it was clear cut without benefit of a land disturbance permit from the town. Ahern, who did not refer to the property owners by name, said it appeared that the property had been cleaned up and a for-lease sign posted since she first floated the idea of the tax a few weeks ago.
"I like to think it's because we are considering this," Ahern said.
Kelly Coates, Carpionato Group president and chief executive officer, did not respond to messages seeking comment for this article.
Ahern also mentioned the former Ray Hoxsie Buick-Pontiac-GMC Truck dealership site on Granite Street, as well as the former site of the Westerly Adult Day Center on Wells Street. The former auto dealership property is owned by Cozie LLC, which was approved to develop the site with restaurants and retail outlets in 2015 and 2016. The project stalled when cost estimates for the work exceeded what the owners anticipated, their lawyer, William Nardone, said in November.
The third site that Ahern flagged as troublesome is across the street from 50 Wells St. and was once the location of the Westerly Adult Day Center, which is now located on Union Street. Westerly police officers often park at the Wells Street site. During a recent visit, it was slightly overgrown and the building appeared to need a new coat of paint. The building is owned by LMW Healthcare Inc., the corporate entity that owns the Westerly Hospital property. Michael O'Farrell, a Westerly Hospital spokesman, confirmed that the hospital owns the property but declined further comment.
State law has allowed municipalities to adopt real estate nonutilization taxes since 1984. The law "was passed in an effort to address numerous vacant and abandoned properties throughout the state, based on the assertion that those types of properties were not only aesthetically displeasing, but a drain on city/town resources, in addition to a finding that suggested that owners of these properties were not paying their fair share of property taxes," Town Attorney William J. Conley Jr. and his associate, Kyla M. Pecchia, wrote in a memorandum to Town Manager J. Mark Rooney.
For purposes of the ordinance, "vacant and abandoned property" would be defined as any building that has remained continuously unoccupied during the calendar year or any lot with no existing structure that is littered with trash and obviously abandoned. Continuously unoccupied refers to any property that is listed during the entire calendar year as vacant in the records of the town's department of minimum housing, according to the memorandum.
If the ordinance is adopted, the town would be required to designate a municipal entity responsible for determining which properties are abandoned and vacant. A mechanism for imposing the tax and removing it once a property is rehabilitated would also have to be established. The town would also have to designate an entity to review development plans for abandoned properties that are submitted by nonprofit housing organizations.
The town's tax assessor would be empowered to abate the tax if it is imposed in error or if a nonprofit housing organization or the owner of an abutting property acquires the property for rehabilitation and submits a development plan.
The Town Council is expected to continue its discussion of the proposed ordinance during a meeting scheduled for Monday at 6 p.m. in Council Chambers at Town Hall.