2015-10-15 / Front Page

Council OKs Tax Relief

Abatements Set for Tennis Hall of Fame
By Barry Bridges

The International Tennis Hall of Fame (ITHF) will enjoy property tax advantages on the value of its new construction pursuant to a tax stabilization resolution approved by the Newport City Council at its meeting on Wednesday, Oct. 14. The vote in favor of the arrangement was 5-0, with Councilor Naomi Neville absent and Councilor Kathryn Leonard leaving the meeting early.

The Hall of Fame began making improvements to its property at the corner of Bellevue Avenue and Memorial Boulevard in 2012 as part of a $9 million plan for museum renovations, additional tennis courts, a fitness center, and other enhancements in two new buildings along Memorial Boulevard. Hall of Fame Chairman Christopher Clouser told supporters in mid- September that the project is more than 70 percent complete.

Once the renovations are done, the value of the ITHF property will presumably increase, with a corresponding increase in property taxes. But a city ordinance eases that burden somewhat by allowing for five-year tax stabilization, or prorata exemptions, on any increased assessment that results from improvements to structures over 50 years old.

The purpose of the law is to encourage and stimulate economic development.

Hall of Fame CEO Todd Martin first sought approval for the abatement in July, and after several continuances the matter was finally heard Wednesday night. In a letter to the city, he wrote that the ITHF “pays property taxes on all buildings and land on its 7-acre National Historic Landmark site in the amount of approximately $150,000 per year.”

Martin is asking that the Hall of Fame be exempted from paying 100 percent of the new taxes on the capital improvements until the construction is completed, followed by a 20 percent decline in the benefit in the five years thereafter. In the first year of the higher assessment, which will be next fiscal year, ITHF will be exempt from paying 80 percent of the new taxes. The exemption is reduced to 60 percent in the second year, 40 percent in the third year, and 20 percent in the fourth year. In the fifth year, the agreement phases out and ITHF will begin paying taxes on the fully assessed amount of the property.

The abatement plan only applies to the increase in value brought about by the improvements. According to Newport Director of Finance Laura Sitrin, the ITHF property was valued at $4.5 million as of Dec. 31, 2013, but was reduced to $3.3 million in 2014. Those figures mean that the total value of the abatements (and lost revenues to the city) over five years could be from $263,000 to $365,000, depending on the year used for the base amount. In the end, the total impact to the tax rolls will be somewhere in the middle of that range, as the council accepted a proposal by Martin to set the base at $4 million.

To make way for its new facilities, ITHF purchased and razed several surrounding structures in early 2014, which also reduced the city’s tax collections. The former Sunoco station at 27 Memorial Blvd. paid property taxes of $9,887 in 2012. The building at 11 Memorial Blvd., which formerly housed Franklin & Co. Interiors, paid $16,546 that year, while the surf shop at 23 Memorial Blvd. paid $13,690 prior to its demolition.

In the stabilization request, Martin gave his views on how the construction project at ITHF is consistent with the economic development goals underlying the ordinance.

“The Memorial Boulevard project has the opportunity to revitalize a prominent stretch of Memorial Boulevard located directly off of historic Bellevue Avenue,” he wrote. “The vision of this project is to … transform a non-descript block of a disparate series of buildings into an aesthetically pleasing, welcoming, and functional cityscape for the pleasure of both residents and visitors.”

Martin maintained that the project would provide increased economic activity for Newport. For example, he wrote that by “doubling the number of tennis courts (from 3 to 6), the ITHF will be able to increase its memberships and programs, which will create more jobs and a larger payroll.” He also added, “The project will create four significant commercial spaces along Memorial Boulevard that will provide additional jobs with commercial activity and result in longterm economic benefit to the city.”

Before the vote endorsing the tax agreement, Councilor Justin McLaughlin remarked, “[The stabilization ordinance] is a tool we can use to encourage people to come here to make investments. This is the first time in nine years that we have done this.”

In related news, the ITHF has plans to purchase the abutting Canfield House at 5 Memorial Blvd., and an application to transfer the liquor license will be heard at the next council meeting on Oct. 28.

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