How the Providence Icon Will Benefit from a $220 Million Redesign

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PROVIDENCE — The owner of Rhode Island’s tallest and most recognizable building on Tuesday reached an agreement with city and state leaders on a deal to bring the tower — known locally as “Superman” back to life. Building” – nearly a decade after it was left vacant.

The $220 million redevelopment plan would prevent the historic Industrial Trust tower from being destroyed or continuing to cast an economic shadow over the city centre.

Instead, with approximately $41 million in state and local funding, David Sweetser of High Rock Development plans to turn it into an apartment building with event and retail space in what was once the hall of the big bank. on the ground floor.

Industrial Trust Company:What to know about the Superman Building in Providence

“It’s going to light up a building that hasn’t been lit in nearly a decade,” Gov. Dan McKee told business, political and labor leaders at a State House press conference. “What’s it going to mean for downtown Providence? It’s going to breathe life into it.”

Providence Mayor Jorge Elorza said redevelopment of the “Superman Building” would help provide needed housing and help transform a downtown struggling with the loss of traditional office workers.

“The Superman Building is a building that we all have a connection to; we all feel attached to it,” Elorza said. “In large part, it’s a symbol of our entire state.”

Where bank executives once worked, the owner of the High Rock building wants to build 285 rental apartments.

Most of them would be rented at market rates, but at least 20% would be subject to deed restrictions for people earning between 80% and 120% of the average median income.

Whether those roughly 57 apartments would actually be “affordable” is likely to be up for debate, but income restrictions will allow the project to get financial assistance from Rhode Island Housing.

On the seventh floor on Tuesday, a mockup of what the offices might look like.

Superman Building:Financing and framework of the project

The agreement

The public contribution to the redevelopment project, while significant, is less than the $48 million High Rock requested last year, according to Commerce Secretary Stefan Pryor.

And that’s smaller than the $75 million incentive package requested by High Rock in 2013 to convert the tower into apartments.

The deal announced Tuesday includes $26.2 million from the state and $15 million from the city.

The city’s contribution consists of a $10 million low-interest loan from the Providence Redevelopment Authority and a $5 million city grant.

The city is also offering High Rock another 30-year break (known as tax stabilization) on the Industrial Trust Tower property tax bill.

The state funding is made up of $15 million from Rebuild Rhode Island tax credits, $5.7 million from a Commerce Corporation “First Wave” fund, and $5.5 million from of two Rhode Island housing programs.

Providence's Industrial Trust Tower, aka the

To help make the deal a reality, the Rhode Island Foundation agreed to loan High Rock $15 million against state tax credits it is expected to receive. (Under the Rebuild program, the state only issues the tax credits when a project is complete.)

The federal government is also expected to contribute $22 million in Historic Preservation Tax Credits and $2 million in New Market Tax Credits to the project.

In total, the plan announced Tuesday includes $65 million in public funding.

High Rock is expected to spend $32 million in cash on the conversion and borrow $116 million to fund construction.

Previously:RI in “intense negotiations” to revive Providence’s Superman Building; McKee is optimistic

Collapsed face of an icon:Can ‘Superman’ be saved?

Building

Zachary Darrow, an attorney working for Sweetser, said demolition work inside the building is expected to begin in five to six months and last about six months. The whole project should last around 30 months.

High Rock is still finalizing what it wants to put on the lower floors to complete the apartments, but Darrow noted the lobby needs to be restored to qualify for historic tax credits.

“We intend to incorporate some form of community program,” Darrow said.

The High Rock agreement defines what the state and city are willing to pay now, but that doesn’t mean the state subsidy couldn’t increase if construction costs rise, as has happened with large projects such as the Worcester Red Sox Stadium.

Darrow said the $220 million cost estimate already accounts for post-pandemic inflation.

“We are very confident that we have worked to get good current numbers and take into account any market changes that may occur,” he said.

Would the state foot the bill if costs increased further?

“At this time, we don’t anticipate this issue,” Pryor said. “If any issues arise, we’ll deal with them then.”

Asked what has changed to make a deal possible now after nine years of failure, Pryor said the hot property market had a lot to do with it.

“One of the factors is the strength of the residential market,” he said. “The fact that residential rental rates can be calculated at the levels they are at…has made the project more affordable.”

The limestone facade of the Industrial Trust Tower, which is attached to a steel skeleton.

Reaction

Arnold “Buff” Chace, managing partner of Cornish Associates, was part of the team High Rock hired in 2013 to reimagine the “Superman Building”.

“The addition of hundreds of housing units at different price points and more commerce to this architectural gem will create a strong momentum in Westminster and Fulton streets and breathe new life into our city’s central square,” said Chace said in an email.

Not everyone in town was so enthusiastic about the deal.

“Correction: Taxpayers of Providence would extend a 40-year low-interest $10 million loan + $5 million grant + generous fiscal stabilization agreement. Perhaps we could also add a Convertible Bentley,” mayoral candidate Gonzalo Cuervo tweeted.

Providence State Sen. Sam Bell said waiving property taxes under the 30-year tax treaty being discussed “could well tip the city into bankruptcy.”

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