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Brown to pay Providence $31.5M over 11 years

May 1, 2012

Brown University will pay $31.5 million to Providence over 11 years — more than the amount sought by the city — after nearly a year of fraught negotiations.

The agreement was announced by Governor Lincoln Chafee, Providence Mayor Angel Taveras, Brown President Ruth Simmons and legislative leaders during a Statehouse news conference this morning. Much of the talk focused on how Brown and Providence are co-dependent on each other. The agreement also marked a bright spot as Rhode Island continues to struggle with high unemployment and failed attempts at economic development.

Taveras says the agreement sets Providence up for a fiscal comeback. Simmons says the deal will cause at least some belt-tightening at Brown, but she called it an important leap of faith.

I think what we believe is that we’re in this together and that if we concentrate on what it is we dare not believe, what we dare not do, we will never make the progress we need to make as a city and a state.

 Governor Chafee got repeated kudos from the participants for fostering progress between the two sides.

City Hall says Brown’s total annual contributions to Providence, including the 2003 agreement struck by David Cicilline, will increase to almost $8 million through 2016.

In exchange, the city has agreed to abandon “streets immediately adjacent to Brown’s campus,” and to provide 250 parking permits for Brown employees. Taveras said the pact does not include consideration for land made available by the relocation of I-195, although he expressed hope that Brown will pursue some of those parcels. 

The Brown agreement follows in close order on a commitment by the Lifespan hospital network to pay $2.4 million to city over three years, Providence’s first such deal with a hospital. It also comes after the City Council offered final approval of a pension overhaul plan to freeze cost of living adjustments and realize other savings.

Taveras says he expects union critics of the pension overhaul to sue the city, and he says Providence will be prepared to defend its legal case.

UPDATE: The Bond Buyer notes that S&P dropped Providence’s credit-rating, making for what it calls a mixed bag for the city.

3 Comments leave one →
  1. Mister Guy permalink
    May 1, 2012 11:37 pm

    “Taveras says he expects union critics of the pension overhaul to sue the city, and he says Providence will be prepared to defend its legal case”

    …and lose.

    “Standard & Poor’s lowered its long-term rating and underlying rating on Providence’s general obligation debt to BBB from BBB-plus”

    Only two more notches until “below investment grade”…way to go fear-mongers!

    “Standard & Poor’s cited the city’s ‘deteriorating fund balance and liquidity position, intractable pension liability growth and optimistic 2013 budget assumptions.'”

    In other words, S&P can smell the City budget BS from miles & miles away. No one is being fooled by Taveras’ lying, period.

    “Brown now pays $4 million annually. Under the new agreement, it will pay an additional $3.9 million this fiscal year and the rest over the following 10. The city had sought more.”

    Is it true that the City sought more money than this? The above blog posting says:
    “more than the amount sought by the city”…which is it?

  2. pawtucket guy permalink
    May 2, 2012 1:47 pm

    The Brown University Endowment is $2.5 Billion. It reported a fiscal year 2011 return of 18.8% or $462M. They gave Providence less than 7% of one year’s tax free earnings-chump change.

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  1. In the end, Taveras and Simmons were natural allies « On Politics

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