The health and education sector, which employs more than 35,000 people in Providence, is one of the most important foundations of the city economy. Between 2002 and 2007, this sector created 3,500 new jobs — while the rest of the city economy lost more than 6,000. It is vitally important that health and education employers continue to grow. They should be encouraged to expand on the best land we have available — including the prime land that will be opened up when the old Route 195 is demolished in a few more years.

Brown University, Rhode Island Hospital, Johnson & Wales University and other health and education institutions are among the state’s biggest employers. They have large endowments and offer services that are relatively recession-proof. They have the capacity to expand in the near future. In the Route 195 corridor, we do not want a repeat of the Capital Center experience, where prime land sat fallow for decades while we tried to attract big corporations from outside the state. In the 195 corridor, we should still go after the big out-of-state companies. But we should also permit the hospitals and universities that anchor our economy to expand their operations, increasing downtown employment and continuing the renaissance of the city.

The Sunday Journal reported on June 29 that Mayor David N. Cicilline was cool to the idea of allowing Johnson & Wales to expand in the 195 corridor. J&W, which has 10,000 students in Providence and 1,200 employees, is preparing a $126-million plan to consolidate its campus in the downtown area. J&W would purchase about 25 percent of the 19 acres that will become available. Mayor Cicilline said his first preference is for commercial office buildings that would create high-paying jobs and pay property taxes to the city.

As a former mayor of Providence, I understand and respect Mayor Cicilline’s desire to increase the city’s revenues. But attracting new banks, insurance companies and corporate headquarters is very difficult to achieve. Class A office development has been minimal in Providence over the last decade, in large part because banking and insurance employment in the city fell by more than 4,000.

In Capital Center, the Citizens and Blue Cross buildings are transfers from elsewhere in the downtown, and GTECH is a transfer from elsewhere in the state. Many parcels in Capital Center have been developed for residential instead of commercial purposes. Of course, the Providence Place mall has been hugely successful, and has fueled a renaissance in the city; the new hotels and the convention center are also important additions. But the rest of Capital Center has not offered the tremendous economic benefits that had been hoped for, despite the excellence of the infrastructure. We must also consider the very long time frame: planning on Capital Center began in the mid-1970s, and there is still some undeveloped land left.

Meanwhile, the health and education sector has continued to expand, adding almost 5,000 jobs in the city over the last 10 years. In 2007, the sector’s payroll reached $1.7 billion — by far the highest in the city. Average salaries are about $45,000, well above the state average. The 35,000 employees pay millions in income, sales and property taxes. Another plus: The institutions have a good mix of professional, clerical and manual jobs, meeting the needs of the city’s diverse population. In addition, the colleges bring more than 20,000 full-time college students to the city, many from out-of-state. These are major economic assets for Providence. Imagine if J&W were to consolidate instead in North Carolina or Florida, where it already has satellite campuses. The impact on Providence would be devastating.

In the Route 195 corridor, we want large-scale investment and job creation, and we want it to happen soon. The large universities and hospitals that dominate the health and education sector are more likely to meet this objective than finance, insurance or other commercial ventures. J&W and RISD already have a major presence on the northern edge of the corridor; Brown and Rhode Island Hospital already have a major presence on the southern edge. In the near future, J&W wants to construct eight new buildings, and Brown plans to create a new campus for its medical school near Rhode Island Hospital. A downtown medical school could also attract private medical companies and research centers. The vacant land along the highway corridor could fit into these plans.

In my view, all land in the highway corridor should be open to tax-exempt as well as tax-paying institutions. The property-tax payments that we give up will be more than offset by economic and community benefits in other forms. This includes new personal income and sales taxes for the state government — which the state should share on an equitable basis with the City of Providence. In addition, the city and the state governments should reach agreements with the institutions on the ground rules for expansion into the corridor. It is appropriate to negotiate a tax treaty that provides for some level of annual payment by the institutions in lieu of taxes. The important thing is to continue building a strong partnership with the universities and hospitals of Providence, so that they will continue to expand and enrich our city.