The Whalerock deal and its effect on your taxes

Tallying up the plusses and minuses

By Will Collette

Hopefully, Charlestown taxpayers will have the right to vote on the $2.1 million town purchase of the site of the proposed Whalerock wind turbine project that would set that land aside as open space. 

I hope voters will vote in favor of the deal because it is the one sure way to end Charlestown’s long-running psycho-drama over this project by making a fair and reasonable deal with developer Larry LeBlanc.

I hope the CCA Party-controlled Town Council recognizes the importance of honoring past precedents and their own promises to put this matter to a town vote. Then I hope town voters will make a wise, informed decision to acquire this strategic piece of property. 

That wooded 81 acre parcel stretches along the moraine on the north side of Route One. Even if there wasn’t a controversial project proposed for that land, I think most residents of Charlestown, regardless of politics, would like to see that parcel remain undeveloped.

The town has already published a tax impact statement that predicts the need to increase property taxes by eight cents per $1000 of valuation.

However, there are other wrinkles to the deal. 

Click to enlarge. This is the map of the Whalerock property. The two
proposed house lots to be carved out are in the lower left corner

One is that Larry LeBlanc’s partner, James Barrows of Connecticut, has a new plan just starting to work its way through the Planning Commission to carve out two house lots out of the southwestern corner of the parcel to build a couple of single family homes. That sweetens the deal for Barrows and LeBlanc, but I think it also sweetens the deal for Charlestown.

When Barrows and LeBlanc signed a purchase-leaseback agreement last December 31, it looked like the two developers intended to build a new housing development and the Whalerock wind farm on the land, sort of like the NK Green development next to Wickford Station in North Kingstown. 

Here's a closer view of the two house lots. They would exit onto Route One

Barrows had agreed to pay LeBlanc $2 million for the land and then would leaseback the space LeBlanc needed for the two turbines, in return for 50% of the turbine’s profits.

Under the deal before us, the housing development shrinks to two homes in the far corner, the wind turbines go away, and the town gets title to the 77.8 remaining acres to set aside as open space.

Charlestown would lose a piece of its tax base in this transaction. 

LeBlanc currently pays property tax on an assessment of $1,019,400. If Barrows had completed the purchase of the property from LeBlanc, the assessment would probably go up to the sale price of $2,000,000.

But all Charlestown loses at this point is the current assessed value of $1 million. Our tax base doesn’t include the $2 million Barrows had intended to pay for the land.

The $1 million loss to the tax base will be offset by the two homes to be built on the two house lots Barrows proposes to carve out of the 81 acres. 

Zillow.com pegs the average home value in Charlestown at $305,000 but I suspect Barrows plans to build something more upscale. His two-lot subdivision would add back at least $600,000 to the tax base and probably a lot more. If those two homes were to sell for $500,000 per, we’d make up the whole amount of assessment value that the town would lose by setting aside the remaining 78 acres as open space.

Except under one condition, if you believe the Charlestown Citizens Alliance (CCA Party).

Even though the CCA Party seems to have gotten behind the deal, and has posted some useful, pro-deal information on its website (click here), they seem unable to resist injecting their own peculiar bias into the calculations.

I noted in an earlier article that the CCA Party had re-posted its infamous anti-family “Cost of Development” formula on their website. This is a mathematically dubious gimmick that casts families with school age children as parasites. 

If you follow their logic, building a new dwelling and then having a family with kids occupy it generates a negative effect on the town’s economy and tax base.

It’s reverse ageism and promotes the odd notion held by CCA leader and Charlestown’s Family Planning Commissar Ruth Platner that only wealthy, elderly retirees contribute value to the town.

Why, Ruth, why do you need to inject your prejudice into what could become a town consensus? What is it about children that you hate so much?

The CCA Party is going to need to sort this out internally. Indeed, Ruth is going to have to work this out internally since, on the one hand, she really wants the deal, but on the other, she is hung up on allowing new homes to be built that might come to be occupied by some nasty little deficit-causing rug rats.

From the Charlestown Tax Assessor database - This is what $3,250,000 
looks like. Charlestown's top priced house for 2013 so far

Regardless of the outcome of the Whalerock deal, Charlestown is also going to see some growth in its tax base due to increased home sales and a slight overall increase in property values. But we may see the most profound effect on our tax base when Charlestown’s high end properties get reassessed since sales of big ticket properties have been going great.

Long-time local real estate ace Ray Mott recently expanded his Post Road business and affiliated with Sotheby’s. He has a reputation for dealing in high-end properties, which is one reason why he has frequently won the top seller title among real estate agents in Rhode Island.

Mott recently announced he sold two properties for the highest and second highest prices paid for properties in Charlestown so far this year. He sold 335 West Beach Road for $3,250,000 and 262 East Beach Road for $2,600,000. 


Both buyers are non-residents so Ruth won’t need smelling salts at the thought of more Chariho school kids. Unless they move here. And have kids.

These sales not only earned Ray Mott some big bucks in commissions, but he also added to Charlestown’s tax base because the two properties sold for $861,200 above their current assessed values. Since recent sale prices for similar properties is a major factor in the upcoming revaluation, this should have a nice ripple effect on the assessments of Charlestown’s other millionaire properties.

Charlestown has almost 300 properties assessed at $1 million or more. 80% of those properties are owned by non-residents. In Charlestown’s last re-valuation, these property owners got a big break when their assessments were reduced by an average of 20%. By contrast, middle-class property owners only received an average 13% reduction in assessment. 

The overall drop in the tax base meant a big hike in the tax rate but because the high rollers got such a large assessment discount, most of them paid lower taxes while most middle-income households saw a big jump in their taxes.

The short and simple of it is that millionaire property owners got a 7% tax break on the backs of Charlestown’s middle-class. 

But we’re not supposed to talk about things like that because, to quote several of the CCA Party leaders, that’s “divisive” and promotes “class warfare.” Like we weren’t already in a class war started by the rich, and a class war that the middle class is losing.

I expect the new assessment to reverse some of that injustice, especially since so many average Charlestown homes sold at greatly reduced prices. Between foreclosures and distressed property sales, I expect the assessments for average homes to show either little increase or even drop, while the assessments for the homes of the CCA base should spike.

Let the people vote on the Whalerock deal

What does all this have to do with Whalerock? In the coming weeks, if we have an informed debate capped by town referendum, the subject of tax impact is going to be an important factor. I think we’re at a point where the deal is not only good social policy, but also makes financial sense.

While some contrarians may argue that Charlestown already has a lot – maybe too much – tax exempt property (as much as 50% by some estimates), carving out the two house lots as James Barrows proposes will offset the loss to the tax base caused by converting the remaining 78 acres from taxable land into tax exempt open space.

With the uptick in property values, the projected 8 cent per $1000 tax hike may simply disappear if we see substantial growth in the tax base.