Rhode Island city's bankruptcy situation mirrors Hartford's - WFSB 3 Connecticut


Rhode Island city's bankruptcy situation mirrors Hartford's

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Central Falls, RI is on the rebound after emerging from bankruptcy. (WFSB) Central Falls, RI is on the rebound after emerging from bankruptcy. (WFSB)

As legislators continue to battle over a state budget, Hartford warned that unless additional aid arrived from the state, the city could file for Chapter 9 bankruptcy as soon as this fall.

The I-Team has been looking into this after taking a trip to Detroit, a city that underwent a similar process and is now thriving.

It also headed to Central Falls, RI. The New England city also hit rock bottom and is now on the rebound.

When the I-Team arrived to Central Falls, a new development was underway.

The I-Team was there when city leaders broke ground on a new train station that would provide a direct link between the city of 20,000 people and its larger neighbors of Providence and Boston.

However, the five years between Central Falls' bankruptcy filing and the development celebration was a tough time.

"Central Falls saw tax increases [and] services cut, but it was an opportunity for the community to turn around, get new leadership, get young people involved and I can tell you now that we're doing much better," said Mayor James Diossa.

Diossa took over as mayor after the state forced the city into bankruptcy in 2011.

He told the I-Team that it was a dark time in the city with multiple double digit tax increases. However, he said things have finally begun to improve.

Business owner Zack Kucukkaya agreed.

Kucukkaya said he just moved back home to Central Falls to open his store. He credited the city's new administration with turning things around.

"He's allowing businesses to come in, this way the tax burden is not just on the few that are here," he said. "It's absolutely made a big difference. And it's a better city and it's thriving."

Kucukkaya admitted that it wasn't always this rosy.

His mother has a small business nearby and struggled during the down years.

He said those tough times forced the city to take a hard look in the mirror.

"If it goes bankrupt, it's not because the store's not making money, it's because I don't know how to manage it," Kucukkaya said. "If the politicians of the city don't know how to manage it, of course it's going to go bankrupt."

State Sen. Elizabeth Crowley has a different view of the Central Falls turnaround. She represents the city and nearby Pawtucket. She's also a former Central Falls employee.

Now retired, Crowley said she and others saw their pensions cut by 50 percent.

"How would you like to wake up one morning and they say 'hey, there's no more money and we're not going to pay you,'" she said.

She said she counted herself lucky. She was young enough to adapt.

She said she knows former police officers and firefighters who found out at 80 years old that not only were their pensions chopped in half, but that they also lost their medical benefits and had to pay a $10,000 penalty to join medicare late.

"They say you have to go way down before you can go way up?" Crowley said. "Well Central Falls was down about as far as you can go. Charters, laws, nothing prevails. It's the bankruptcy court that prevails."

As the debate over how to move forward in Hartford continues, so will the I-Team's Capital City in Crisis series.

Here are the other stories in this series:

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