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Johnson & Wales to triple payment to Providence

By Erika Niedowski
Associated Press / February 15, 2012
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PROVIDENCE, R.I.—Providence's mayor on Wednesday announced a tentative deal with Johnson & Wales University under which the school would more than triple its annual voluntary payments to the financially struggling city -- and possibly contribute even more.

Mayor Angel Taveras said the agreement, which is tied to the university's expansion plans in a key economic development district on the edge of downtown, increases the school's payment in lieu of taxes from the current $309,000 to at least $958,000.

Depending on whether the university acquires an additional parcel in the so-called Knowledge District, the school could contribute as much as $1.45 million annually to Providence, officials said.

The mayor called the tentative deal, which he announced alongside Johnson & Wales Chancellor John Bowen, a "huge step forward" for the city as it seeks to close a $22.5 million shortfall for the current fiscal year.

"We need each other," Taveras said. "We both need to be successful."

Said Bowen: "We're bullish on the capital city. We've got big plans, and we want to do them here in Providence."

The additional contribution over 10 years would be $6.4 million, with the possibility of $5 million more.

The agreement is subject to City Council approval.

Taveras has asked the city's largest tax-exempt institutions, including universities and hospitals, for $7.1 million more this fiscal year to help close the deficit and stave off a possible bankruptcy.

Johnson & Wales agreed in a 2003 to pay the city $6.8 million over 20 years and has given about $2.7 million so far, according to a spokeswoman.

Taveras is still trying to hammer out agreements with the other tax-exempts. He met Wednesday with Brown President Ruth Simmons about the Ivy League school's payments. The mayor, who wants $40 million more from Brown over 10 years, called those discussions positive.

Brown says it contributes about $4 million a year, including $1.2 million in lieu of taxes as well as payments on newer buildings and those not used for educational purposes.

Brown spokeswoman Marisa Quinn said the university is exploring "a number of possibilities" regarding increased payments. She said discussions are "going well" and that the university is "confident they will lead to a constructive, fair and equitable solution."

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