Newport presentation proposes conveyance fee to fund coastal resilience

Newport city staff presented a proposal for a Resilience & Sustainability Fund that would create a predictable, bondable revenue stream for coastal protections and other resiliency projects by levying a one-time conveyance fee on commercial and non-owner-occupied residential property sales.

Chief Donnelly described the model as targeted and market-based: purchasers of investment or second-home property would pay a tiered, one-time fee (exempting year-round owner-occupants who commit to residency for five years) and the city would be enabled to set an annual rate up to 5 percent if the General Assembly authorizes municipalities to adopt such a fee.

Donnelly said the fee is not intended to burden long-term residents, that it would be applied to the purchaser (not the seller), and that Block Island and Little Compton have used similar local conveyance-fee models for decades. Using prior-year sales figures for relevant property categories, the presentation showed an estimated revenue scale (1% of the identified sales base would approximate $16.82 million; 5% would roughly correspond to a mid-to-high tens-of-millions figure in model estimates presented).

Councilors asked whether the fee would affect flood insurance premiums or deter buyers; Donnelly said the city has reached out to the Rhode Island Interlocal Trust to investigate possible insurance benefits and that the fee’s impacts on market behavior would need further study. He reiterated that enabling legislation at the state level would be required before the city could collect such a fee.

City staff and legislators agreed that the proposal merits more vetting, community input and formal council consideration before any resolution or legislative request is filed.