EAST PROVIDENCE, R.I. (WPRI) – A tax stabilization agreement proposed for a 144-unit affordable housing project in East Providence failed in the City Council last week in a 3-2 vote.

Councilors voting against the agreement said they couldn’t “offer a tax break” when the city is facing a possible budget shortfall, searching for funds to purchase a new fire rescue, and local businesses are struggling with the Washington Bridge crisis.

“There are a lot of expenses and to take a tax cut, it may seem small, about $40,000 a year, it’s still $40,000 a year that we as a city need on an annual basis because we’re only losing money,” Councilwoman Anna Sousa said at Tuesday’s meeting.

Mayor Bob DaSilva advocated for the agreement and said the outcome of the vote came as a surprise to both his administration and the nonprofit developer, One Neighborhood Builders.

“We’d love the opportunity to have the council review our request again, but don’t see a path forward where that seems likely,” said Michelle Bleau, director of housing development at One Neighborhood Builders.

One Neighborhood Builders has already committed to the $65 million project to revitalize a blighted property at 350 Taunton Ave. and the developer also purchased the adjacent properties at 330 and 354 Taunton Ave.

The four-story building at 350 Taunton Avenue was once dormitories for Johnson and Wales University, but the college moved out in 2012. Since then, DaSilva’s office said the property has been in steady decline.

“At a time when affordable housing is in demand, I believe the proposed project is ideal for this site,” DaSilva said in a letter to the council. “The developer is known to do great work and will turn this property from a vandalized, vacant, and deteriorating site, into something that will add great value to the city.”

One Neighborhood Builders, in partnership with nonprofits Foster Forward, Crossroads Rhode Island and Family Service of Rhode Island, plans to redevelop the existing building and construct two new buildings totaling 144 low- and moderate-income apartments.

Fifty-one of the apartments would be reserved for veterans, youth aging out of foster care, and people facing extreme housing instability. East Providence residents would get first preference for the apartments, which range from studios to three-bedroom units.

One Neighborhood Builders is already paying nearly $84,000 in taxes on the current vacant property and that tax obligation would increase to $168,000 once the development is completed in year one. After ten years, it would total about $201,000.

The nonprofit said the ten-year tax break would have allowed them to borrow more debt for the project and require fewer capital subsidies from the state.

“We’ve had a strong partnership with the city of East Providence,” Bleau said, adding that they “would have hoped that the council would use all of the tools at their disposal to support new housing construction in their city given the state’s housing crisis.”

The property already received city zoning and planning board approvals this past fall and was expected to be complete in late 2026.

One Neighborhood Builders officials said the timeline will likely be delayed without a TSA.

“Instead of speeding up its progress, the council’s rejection means we must seek additional funds to complete the development,” Bleau said.

Elsewhere in East Providence, One Neighborhood Builders is currently building The Residences at Riverside Square , a 16-unit development on Bullocks Point Avenue that is going up on the old Vamco site. That project is also a partnership with Foster Forward.

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