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Nancy Pelosi assails Republican tax reform bill during RI visit

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WARWICK, R.I. (WPRI) — The U.S. House Minority Leader Nancy Pelosi called the Republican tax bill “mean-spirited” in a visit to Rhode Island Monday, criticizing the bill as bad for the middle class.

“The middle class will pay more,” Pelosi told reporters after a tour at the Community College of Rhode Island in Warwick. “Under this bill, future generations will pay more because the deficit will explode.”

Pelosi slammed the Republicans’ pitch as a “farce,” particularly in the proposed doubling of the standard deduction, which she said would not cover the cuts made to other specialized deductions including medical costs, mortgage interest and student loan interest.

Flanked by Democratic Representatives David Cicilline and Jim Langevin and Sen. Sheldon Whitehouse, she slammed Republican leadership for declining to work in a bipartisan manner to reform the tax code.

“I don’t like to spend too much time on process,” Pelosi said. “Except when the process is such that it’s done with the speed of light, in the dark of night so that nobody knows what’s in the bill and how it affects them.”

Members of the House Ways and Means committee began the process of marking up the bill on Monday. Republican leadership is aiming to get the bill passed by Thanksgiving.

Republicans including House Speaker Paul Ryan and President Donald Trump have touted the tax reform bill as a tax cut for middle-income families, lowering rates and simplifying the tax code.

The bill cuts the number of tax brackets from seven to four. It sets a 12% tax rate for people who make up to $45,000 per year, a 25% rate for earners between $45,000 and $200,000, a 35% rate for earners above $200,000 and a top rate of 39.6% for individuals who make more than $500,000.

The income thresholds for married couples would be $90,000, $260,000 and $1 million for the 25%, 35% and 39.6% rates, respectively.

The standard deduction would double to $12,000 for individuals and $24,000 for families.

“This is absolutely a middle-class tax cut,” said Mike Stenhouse, the CEO of the RI Center for Freedom and Prosperity, a conservative group. He called Pelosi’s comments “more mindless, shameless fake news.”

The Democrats also criticized the cut to the corporate tax rate in the bill, which Republicans have said will grow jobs and wages.

Rhode Island Republican Chairman Brandon Bell said Monday he supports the tax reform efforts in Washington.

“Tax reform will give Rhode Islanders millions in tax relief that they need,” Bell said in a statement. He also took a jab at Rhode Island’s proposed PawSox stadium deal, pointing out that the GOP tax bill would cut tax-exempt stadium bonds.

“Eliminating this tax break will not only save American taxpayers billions, but it will put an end to the PawSox deal now being considered at the State House,” Bell said. “Under tax reform, Rhode Islanders will get millions in tax relief and it will stop State House politicians from wasting millions in taxpayer dollars on a new stadium.

Economy, Local News, News, Northwest, Top Video

Benny’s owner on closure of family-run chain: ‘Things have changed’

PROVIDENCE, R.I. (WPRI) — The year was 1968, and Arnold Bromberg was working at the North Main Street location of his family’s retail chain, which at the time had been operating for four decades.

“There were supposedly going to be people rioting,” Bromberg recalled, with political protests happening across the country. North Main Street businesses in Providence were shutting down in light of the protests. But Benny’s – by then a neighborhood favorite – was keeping its doors open.

“We stayed open, customers came in, we took care of them,” he said.

Bromberg recalled the favorite memory from his office at Benny’s Smithfield headquarters on Friday evening, a few hours after announcing that the family-run chain would be shutting down by the end of the year.

“The time has come,” Bromberg told Eyewitness News. “Things have changed.”

Bromberg cited dwindling foot traffic and the changing retail climate as the main reasons for the closure. He declined to say how far sales have fallen, but said the trend has been going downward for the past 10 to 15 years.

“What sustains us is the people doing the shopping,” he said. “And they’re not doing the shopping the way they used to.”

Benjamin Bromberg, the founder of Benny’s, is seen inside one of the original stores. (courtesy: Benny’s)

Plenty has changed since Bromberg’s grandfather Benjamin Bromberg – the original “Benny” – opened the first store on Fountain Street in Providence back in 1924, when he decided to turn his talents as a local tire salesman into his own business selling mostly auto parts and radios.

“The radio was a new invention,” Bromberg said. “It was the iPod of the 1920s.”

While the chain has become a go-to location to buy snow shovels, Christmas decorations, bicycles and patio furniture, it hasn’t weathered the rise of e-commerce and competition from companies like Amazon. Bromberg said it wasn’t going to be sustainable for the next generation of the family to take over the company.

Bromberg and his siblings will be retiring, ceasing operations by the end of the year and selling the Benny’s properties in Rhode Island, Massachusetts and Connecticut, many of which are standalone stores with good-sized parking lots.

“We’ve never had a store in a mall,” Bromberg said. “We’ve always expected our customer to be able to pull up the door, go and buy the bag of rock salt and shovel and go right back out to the car.”

He said the company is fielding offers. “They’re great retail locations, so I’m sure somebody will slip into them,” Bromberg added. When asked if the properties would be sold to one buyer or individually, he said it could go either way.

An end-of-summer sale is already going on, and Bromberg said more sales will take place before the chain shuts down.

The Providence Journal building site on Fountain Street, looking north from corner of Fountain and Mathewson Streets, when it was Benny’s. June 1, 1933. (courtesy: Benny’s)

The company’s 715 employees, about half of whom are full-time, were notified Friday that the stores were closing and they would be losing their jobs. Gov. Gina Raimondo said Friday the Department of Labor and Training was reaching out to assist those employees.

Outside the Smithfield store Friday evening, Rosanne Morales and her grandchildren were taking a selfie with the Benny’s sign. They had just purchased a kite.

“We were looking for kites and no one else had them, but Benny’s did,” Morales said. “Years to come they’ll be able to say, ‘We were at that place called Benny’s,’ and they’ll be able to show their grandchildren.”

It’s precisely the legacy Arnold Bromberg sees Benny’s leaving behind.

“It’s always going to be, ‘Oh yeah, that’s where that Benny’s used to be,'” he said. “It’ll always be in everyone’s mind, I think. It’s built in.”

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Ted Nesi contibuted to this report.

Blackstone Valley, Economy, Local News, News, PawSox, Politics, sports, Top Video

PawSox stadium legislation introduced, will be vetted this fall

PROVIDENCE, R.I. (WPRI) – Rhode Island leaders signaled Tuesday they plan to take up the proposal for a new, $83-million Pawtucket Red Sox stadium later this year, after Gov. Gina Raimondo announced her support for a revised version of the plan.

Senate Finance Committee Chairman William Conley introduced the revamped bill on Tuesday, and said his committee will consider it this fall. The Senate is not yet committed to holding a special session to vote on the legislation, spokesman Greg Pare said.

“I think keeping the PawSox in Pawtucket and in the state of Rhode Island is really important to our future,” Conley told reporters at a briefing about the bill Tuesday afternoon. He emphasized that the legislation will “absolutely, positively not” be voted on in the few days left before lawmakers adjourn their regular session.

House Speaker Nicholas Mattiello said a companion bill will be introduced in his chamber by members of the Pawtucket delegation, and he said it “will be fully reviewed by the House Finance Committee this fall.” But he also stopped short of committing to a special session this fall to vote on the plan.

Commerce Secretary Stefan Pryor, who helped negotiate the PawSox deal on behalf of the Raimondo administration, sent a letter Tuesday outlining his reasons for supporting Conley’s legislation. “This plan offers a responsible way to keep the ‘Paw’ in the PawSox,” he wrote.

“As we conduct our work in Commerce, we aim to achieve two objectives: to promote economic prosperity and to protect taxpayers,” Pryor wrote. “The proposal for a Ballpark at Slater Mill would accomplish both objectives.”

The new bill maintains the same financing split as the original plan.

State taxpayers would contribute $23 million to a new publicly-owned ballpark in downtown Pawtucket, to be paid back with tax revenue from the stadium and a surcharge on ticket sales. The city of Pawtucket would contribute $15 million, and the PawSox would pay $45 million, with $33 million of the team’s portion paid through a 30-year lease agreement.

Crucially, the new legislation spells out that Pawtucket is backstopping its own bonds by pledging its state aid – language that Raimondo said gave her the confidence to support the bill. The team has committed to covering any cost overruns.

The plan to build a new stadium at the Apex site in downtown Pawtucket was on life support earlier this month after the General Assembly gave it a lukewarm reception and Raimondo said she could not support it because it left state taxpayers on the hook for Pawtucket’s debt.

The new bill explicitly says Pawtucket will guarantee the bonds that the city floats to pay for its portion of the stadium. The Pawtucket Redevelopment Agency (PRA), a quasi-public body, will float the 30-year bonds for both the city and state portion of the stadium debt.

A second bill submitted Tuesday authorizes the PRA to issue the bonds by expanding the power of all the state’s municipal redevelopment agencies “to finance the construction of projects for residential, recreational, commercial, industrial, institutional, public, or other purposes contemplated by a redevelopment plan,” according to a summary.

Under the plan, both the city and state expect to pay back the bonds using sales and property tax revenue generated from the PawSox, visitors to the ballpark and other development expected to crop up around the new downtown site.

The bill also says the state would receive funds from a special ticket surcharge, but Conley said the price of the surcharge has not yet been determined.

The PawSox issued a statement Tuesday evening thanking the governor and her team for supporting the proposal and referencing a “final resolution” in the fall. “While there are no guarantees of successful adoption of the legislation, we are well aware of the importance of this milestone,” the statement said.

Pawtucket Mayor Donald Grebien previously said team executives were only committing to negotiate with Rhode Island until July 1, and after that would consider moving the club elsewhere. A spokesman for the team said they would not be taking questions beyond the statement.

“All I can say to the PawSox is there’s not a better place in the universe than Pawtucket, Rhode Island, for them,” Conley said. “And for them to go anywhere else would be foolish.”

Raimondo threw her weight behind the legislation Monday – something Mattiello demanded in order for the House to even consider the proposal. “At the end of the day, I don’t think this is going to cost the taxpayers of Rhode Island anything,” she said.

Pryor agreed, saying he is confident the revenue from the ballpark would cover the state’s $23 million share of the project. “We expect it to exceed it, but we’re confident that it will cover it,” Pryor said.

“That’s a dream,” said Rep. Patricia Morgan, the Republican House Minority Leader. “We don’t have this money. I’ll tell you who does: the owners of the PawSox.”

Morgan sits on the House Finance Committee that will consider the bill in the fall. She said she doesn’t want taxpayer dollars funding the stadium, even if that means the team decides to leave the state for a sweeter deal.

“That would be unfortunate, because they do have a loyal base here,” she said. “But it is a private company. They have to look out for themselves and we have to look out for ourselves.”

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Economy, Eyewitness News Investigates, Local News, News, Politics, Ted Nesi

RI agrees to $26M settlement with Wells Fargo, Barclays in 38 Studios lawsuit

[anvplayer video=”1064486″ /] PROVIDENCE, R.I. (WPRI) – Rhode Island leaders announced Tuesday they’ve reached another settlement in the long-running lawsuit over 38 Studios, agreeing to accept nearly $26 million to drop litigation against two major banks involved in the failed deal.

Rhode Island’s economic-development agency borrowed $75 million in 2010 to lure 38 Studios, a game company co-founded by Curt Schilling, to the state; the business went bankrupt in 2012. The Chafee administration soon sued some of the deal’s architects in an effort to recoup part of the almost $90 million taxpayers owed on the loan.

The agreement announced Tuesday is the third and by far the largest settlement reached with some of the original 14 defendants in the lawsuit. It calls for Wells Fargo Securities and Barclays Capital to pay the state exactly $25.625 million, bringing the total value of settlements so far to $42 million before legal fees.

Watch: Ted Nesi breaks down why this development is significant to taxpayers. Story continues after video below.

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The settlement with Wells and Barclays will yield approximately $21.3 million for taxpayers after legal fees and other costs, Rhode Island Commerce Corporation spokesman Matt Sheaf told WPRI.com. The state still owes $61.8 million in payments to the 38 Studios bondholders, before applying the proceeds from the new settlement, he said.

“We are pleased to have reached an agreement in this case,” Wells Fargo spokesman Kevin Friedlander said in a statement. “We are not admitting liability, nor did we do anything improper. It is simply in our shareholders’ best interest to minimize the risk that accompanies lengthy litigation.”

The terms of the settlement were filed Tuesday in Rhode Island Superior Court by the parties and must still be approved by Judge Michael Silverstein, according to the Commerce Corporation, the new name of the agency that undertook the 38 Studios deal. The agency said the settlement was reached during mediation talks led by retired Superior Court Justice Francis Darigan Jr.

Darigan told reporters he thinks it’s better to settle than go to trial, because a trial doesn’t guarantee money for the state.

“This is not going to be an easy case to try,” he said.

Darigan described the settlement talks as a “grueling negotiation,” saying the state’s lawyers wanted more money and the two banks wanted to pay less. Both sides agreed to the $25.625 million amount on July 26, he said.

“We were able to strike an agreement,” he said. “The agreement wasn’t lauded by everybody as being wonderful, but it was an end to a very, very contentious litigation, the cost of which would have been compounded if the matter had gone to a jury trial before Judge Silverstein, and that was part of it.”

In a statement after the announcement, Gov. Gina Raimondo said: “38 Studios was a bad deal for Rhode Island and I was against it from the start. It’s our job to be as aggressive as we can in recovering as much taxpayer money as possible, and today’s settlement is another huge step toward that goal.”

Raimondo said her administration plans to “keep going” in an effort to obtain more money to pay off the 38 Studios bonds. “Rhode Islanders understandably feel hurt by this deal – and I do too – but I want everyone to know that we are demanding accountability, getting money back, and moving the state forward,” she said.

The Commerce Corporation board, which Raimondo chairs, approved the settlement Aug. 10 in a vote that took place behind closed doors.

The first settlement in the 38 Studios lawsuit was announced back in June 2014, when a law firm that worked on the deal, Moses Afonso Ryan, and one of its partners, Antonio Afonso Jr., agreed to settle for $4.4 million; after legal fees and other costs, taxpayers netted $3.2 million to help pay off the bonds.

The second agreement was announced last August, when four defendants – Adler Pollock & Sheehan, another law firm that worked on the deal; Robert Stolzman, who was the state agency’s legal counsel; and Keith Stokes and J. Michael Saul, top agency officials at the time – settled for a combined $12.5 million. That settlement yielded $9.9 million for taxpayers after fees.

If the new settlement is approved, the three agreements combined will have yielded an estimated $34.4 million for taxpayers after legal fees and other costs, enough to cover almost 40% of the $89.2 million in total payments scheduled to be made to the 38 Studios bondholders through 2020.

The remaining defendants in the lawsuit are set to go on trial Oct. 18, when jury selection will begin before Silverstein. Those defendants are former 38 Studios executives Schilling, Thomas Zaccagnino, Richard Wester, and Jennifer MacLean; First Southwest Co.; and Starr Indemnity and Liability Co.

Darigan said he remains in active settlement talks with the other six defendants and is hopeful they will also reach an agreement, perhaps in the next week or two. He acknowledged, though, that it could be “a stretch” to recoup enough money to cover the entire $89 million in bond payments.

“I’m hoping we can make a significant contribution towards that, but I don’t want to mislead anybody to think that the state is going to recover every nickel, because I don’t know that that’s going to happen,” he said.

Asked on Twitter for his reaction to Wells Fargo and Barclays settling, Schilling simply said: “Good for them.” He also argued that Rhode Island taxpayers “have been blindfolded for years from the actual story” about what happened with 38 Studios.

Separately in March, the U.S. Securities and Exchange Commission filed its own federal case over 38 Studios against the state agency and Wells Fargo, alleging they defrauded investors. Earlier this month U.S. District Judge Jack McConnell allowed the SEC case to proceed.

Attorney General Peter Kilmartin announced last month no criminal charges would be filed over 38 Studios following a four-year grand-jury investigation. He has so far resisted growing public pressure to allow the release of documents and other materials collected during that probe.

Also still pending is 38 Studios’ original bankruptcy case, filed in June 2012 in Delaware, where the company was incorporated.

Ted Nesi (tnesi@wpri.com) covers politics and the economy for WPRI.com. He writes The Saturday Morning Post and hosts Executive Suite. Follow him on Twitter, Facebook and Instagram

Tim White contributed to this report.

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Economy, Local News, News, Politics, SE Mass, Top Video

Attleboro City Council passes controversial budget

ATTLEBORO, Mass. (WPRI) — Thursday night’s meeting of the Attleboro City Council continued well past midnight and ended with a final vote to pass a controversial new budget.

The $125 million spending plan, proposed by Mayor Kevin Dumas, aims to partially close a $4 million school department budget gap and a $2 million city budget gap by laying off 42 school employees and 12 other city employees. The proposal has received a lot of pushback from city residents.

The budget passed around 1 a.m. Friday with a nearly split 6 to 5 vote.

The school department faces a roughly $1 million budget shortfall and Thursday night the council worked to try and amend the budget to put money back in the general fund to try and narrow the gap, however the mayor gets the final say on where that money will go.

Council members found that extra money through some voluntary salary cuts for themselves, though not all of the members volunteered. The cuts would have included the mayor’s salary, who makes six figures, along with the city councilors’ approximately $7,000 yearly stipend.

After a contentious debate, the council declined to make the blanket cut but did vote to cut the salaries of four city councilors who offered: Councilors Jeremy Denlea, Heather Porreca and Sara Lynn Reynolds offered to cut their salaries by 20%, and Councilor Mark Cooper donated his entire take-home pay to the cause. Seven councilors kept their full salaries.

The council also slashed the budget for city workers’ cellphones from $27,000 to $5,000.

The council also voted to eliminate a $50,000 constituent services salary, saying council members could do the job themselves.

The school employees being laid off are mostly teachers, according to Council President Frank Cook, but it will be up the school department to decide exactly who gets laid off. Teachers were informed in April to prepare to possibly lose their jobs.

“That is irresponsible, that is reckless, and that’s not something I will support,” said City Council Vice President Jeremy Denlea. He said the city could have cut spending with a pay freeze in order to bridge the budget gap.

“No one would be happy about it,” Denlea said. “Everyone would be discontent, but everyone would have their jobs.”

Council President Cook said contractual obligations with city workers prevented the city from cancelling their annual pay raises. He pledged to try and fix the school funding formula that caused the budget deficit, but said he would vote in favor of the budget as-is.

“There’s only so much money, and the pie’s only so big,” Cook said. “As a city we need to continue to be looking everywhere to make sure we’re getting the best bang for our buck.”

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Business News, Economy, Local News, Money, News, SE Mass

New Bedford seafood plant will close, cutting 200 jobs

NEW BEDFORD, Mass. (WPRI) — Seafood processing plant High Liner Foods said this week it will shut down most of its New Bedford operations, and about 200 workers will be laid off.

The layoffs will start April 29, and are expected to be finished by the end of September, according to a Feb. 17 letter sent from High Liner to the office of Mayor Jonathan Mitchell.

High Liner, based in Nova Scotia, uses its New Bedford plant to process breaded and battered fish cutlets, known as “value-added” seafood. The plant will shut down, while the company’s scallops division in New Bedford will remain open.

The company purchased the seafood plant from American Pride in 2013.

“We did not do the transaction thinking we would close the facility in three years,” President and CFO Peter Brown told Eyewitness News in a phone interview. “That was not part of the plan.”

Brown said the company determined it could streamline its production from four plants to three, leaving its facilities in Nova Scotia, Portsmouth, N.H. And Newport News, Va. open.

When asked why the New Bedford plant was selected for closure, Brown said the company considered the location of customers and suppliers.

“There was a very in-depth analysis done,” Brown said. The decision had nothing to do with the quality of employees at the New Bedford plant, he added.

Employees were notified Wednesday of the plant’s planned closure. Layoffs will begin April 29, and end when the plant closes in September. Employees will receive severance packages based on how long they worked with the company, Brown said.

In the letter to the mayor’s office, High Liner Executive Vice President Joanne Brown said the company is now working with the “Rapid Response Team” of the Massachusetts Division of Career Services to support employees who are losing their jobs.

Mayor Mitchell responded to the plant’s closure, releasing the following statement to Eyewitness News on Friday:

New Bedford has generally been the beneficiary of recent acquisitions and restructuring in the commercial fish processing industry, including expansions among local processors, so the High Liner decision clearly runs counter to the overall industry trend. That said, our first concern right now is to make sure we mitigate the impacts on the affected High Liner workers and their families. Connecting employees with education and job-training assistance can make a big difference, so the City has already begun working with the Career Center and the Workforce Investment Board to mobilize and coordinate these resources.”

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