A well-known real estate developer has failed in his attempt to destroy a local community’s long-time resource for services. The developer, who owns many properties in Providence, filed a lawsuit against the Thayer Street District Management Authority, a business improvement district approved by the City of Providence in 2006. Thayer Street DMA provides services such as sidewalk and tree well maintenance, trash removal, and recycling programs in a 10-block area comprised of over 90 businesses. The services are funded by a tax paid by commercial property owners in the district. The developer argued that, in 2009, TSDMA was three-and-a-half months late in making a statutorily required filing with signatures of the majority of commercial property owners and, as a result, had ceased to exist. The developer sought to recoup the taxes that he had paid for the DMA services over the past several years that he has owned property in the district.
In a case of first impression, the Rhode Island Supreme Court ruled that a district management authority was not “automatically dissolved” for missing a deadline and making a late filing under the District Management Authorities Act, R.I. Gen. Laws § 45-59 et seq. The statute requires that a district management authority make a continuation filing at the end of the entity’s third fiscal year, and if no filing is made, the entity is “automatically dissolved.” In affirming the Superior Court’s ruling on summary judgment in favor of Thayer Street DMA, the Supreme Court held that the deadline was “directory” and not “mandatory.” A “directory” deadline is aimed at public officials, and the Court found that the DMA is a public body. Therefore, the DMA’s late filing did not dissolve the entity, and it has been legally operating since its formation. As such, Thayer Street DMA may continue to collect taxes and provide services for the benefit of the local community.
