PROVIDENCE – The development team for a proposed technology-innovation complex in Providence has attracted two anchor tenants and was awarded more than $20 million in state incentives Monday night by the I-195 Redevelopment District Commission, whose members hailed the project as the kind of development the city needs.
The partners in the endeavor – Wexford Science & Technology of Baltimore, and CV Properties LLC, of Boston and Southport, Connecticut – are seeking a total of about $32 million in state incentives for the first phase of their project, which is expected to cost $150 million to build, Commerce Secretary Stefan Pryor told The Providence Journal. The developers hope to begin construction in the second quarter of 2017 on the first of a planned three-phase project, and finish the first phase in early 2019.
In all, the three phases could result in more than 1 million square feet of development, Wexford President and CEO James Berens told The Journal.
As part of the first phase, the highly regarded Cambridge Innovation Center and Brown University have agreed to the terms of 15-year leases in Wexford’s 191,000-square-foot “innovation complex.” The partners also expect to create a Venture Cafe© and meeting space where nonprofits and civic groups can gather. The two tenants are now drafting and preparing to execute those leases with Wexford, Pryor said.
Brown will move its School of Professional Studies into the new Wexford complex from its current location in a building across Dyer Street, Pryor said. The Ivy League university expects to invest $35 million in the complex during its 15-year lease, including lease payments and other investment, Sheaff said.
Next to that “innovation complex,” Pryor said, CV Properties expects to build a 170-room Aloft hotel by Starwood Hotels & Resorts, which would be more than 96,000 additional square feet.
The Cambridge Innovation Center, which began in Kendall Square in 1999 and has expanded outside Massachusetts in recent years, would be the largest single tenant in the complex. The for-profit center offers new and expanding technology and entrepreneurial companies shared working space; access to venture-capital investors who work in the same building; and networking opportunities for its entrepreneurs. Well-known alums include Android co-founder Rich Miner, Apple, Google and Cambridge-based HubSpot, a marketing software company.
Executives from Wexford, CV Properties, the Cambridge Innovation Center and the architecture firm designing Wexford’s portion of the development addressed the commission for about 90 minutes. The commission then moved into an executive session, which is closed to the public. Once it reconvened in open session, commissioners praised the project for its creativity, thoughtfulness, energy and for the quality of the partners, whom commissioners said they expect will infuse the now-vacant highway parcels and adjacent land with entrepreneurial activity and new jobs.
Then, the commission voted to commit up to $18.5 million from its $25-million fund, as “disbursements” with a timeline that was not specified at the Monday meeting.
Gov. Gina Raimondo’s administration created the 195 Fund in 2015, and the General Assembly approved it, as an incentive to attract “anchor institutions” or “catalytic” projects to the land or to fill “project financing gaps” for real-estate projects.
The commission also approved advancing up to $1 million from that fund for renovations to an adjacent building at One Ship St., which Wexford bought earlier this year for $3.5 million.
One Ship St. is northwest of the five acres of former 195 land where Wexford and CV Properties expect to build their complex. The firm expects to renovate that space and move tenants in more quickly than it can complete construction of the new development project, Pryor said.
In addition, the 195 Commission voted Monday to “contribute the commission’s land [for the first phase] in return for a profits interest,” Chairman Joseph Azrack said. Azrack explained to The Journal that after the project reaches certain “returns” or financial thresholds, the commission will “receive the return of our land value.”
Azrack said that value is $4.5 million.
When Wexford and CV Properties signed a purchase-and-sale agreement in January to buy Parcels 22 and 25 in three phases, Azrack told The Journal it was expected then that the firms would pay $6.6 million for the first phase of the land and likely more than $13 million in all. Responding to a Journal question about the value he cited Monday, Azrack insisted the land’s value is now $4.5 million.
In addition to the 195 Commission incentives, the Rhode Island Commerce Corporation is expected to consider about $12.5 million in Rebuild R.I. tax credits for the project, Pryor said in an interview. Those Rebuild credits could be voted on as early as next Monday’s Commerce meeting, Pryor said.
State leaders have been negotiating the terms of this agreement since at least May 2015, when Raimondo announced plans by Wexford and CV Properties to build 1 million square feet.
“It’s enormously exciting that a world-class enterprise such as the Cambridge Innovation Center is choosing to invest in and operate in Rhode Island,” Pryor said. “They have an abundance of choices across the world, and they are choosing Rhode Island.”
In a phone interview with The Journal, Raimondo said: “The thing that is so exciting for me about this project is that it has the potential to create thousands of jobs for Rhode Islanders at every level.”
An independent analysis of the project conducted for the R.I. Commerce Corporation estimates the office complex and hotel will contain up to 800 jobs once the project is fully operational, Pryor said. Of those, about 100 are expected to be university jobs. In all, about 700 are expected to be new jobs, based on the Cambridge Innovation Center’s track record of creating new jobs in other cities, Pryor said. Plus, the firm expects more than 450 indirect jobs would be created, at dry cleaners, restaurants and with vendors doing business with the firms in the complex.
The New York City-based firm Appleseed, which Commerce has retained to conduct financial analyses of projects the state invests in, further estimates that 800 construction jobs will be needed to build the facility, and 250 other jobs connected to that influx of workers would be created, Pryor said.
Appleseed estimates the project will generate $5 million in taxes annually to the state, or $100 million over 20 years, including personal income, sales and corporate income taxes. Plus, Pryor said, the analysis shows the value the project could add to the state’s gross domestic product could be more than $125 million each year.
Source: Providence Journal |