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A slow return for downtown Providence workers

Co-working spaces, like Westwey Club at the Turks Head Building in Providence, are becoming totally flexible on memberships, offering day passes to get new people to come in and use the space for $25. The space opened right before the pandemic hit.Jonathan Wiggs/Globe Staff

PROVIDENCE — On any given weekday in 2019, workers would flood out from their offices in the afternoon for lunch, snagging a table or to pick up takeout. They’d beat traffic going home by meeting for after-work drinks that could easily turn to dinner in the city.

On weekends, a new convention or sporting event might be in town, centrally located hotels would be sold out, and there was a wait to get a table for any sit-down meal.

Providence’s eclectic dining scene was always on the menu, and nightclubs like EGO and music venues like Dusk would have energetic lines wrapped around its buildings.

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But, of course, the pandemic changed all of that.

The trouble now, in an economic recovery period, is while leisure tourism is making its return, business travel might not come back until at least 2024; Providence’s “comeback” could be reliant on office workers commuting again.

“The offices are the most problematic in coming back,” said Cliff Wood, the executive director of The Providence Foundation.

According to a recent survey Wood conducted of the Foundation’s 150 members — which include businesses from Bank of America to the Providence Preservation Society — about one-third said they would not commit to returning to the office while another third were “chomping at the bit to come back.”

“I do miss the times where we could be all in person and then go disperse and have lunch in five different places on Westminster Street,” Wood said. “But in polls, everyone [business owners and executives] is contradicting each other. There’s no consensus right now about when everyone is going to be back.”

Without these workers, many lunch counters, coffee shops, and the very office spaces that rely on them for rent are still at a crux.

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“The lack of workers downtown lends itself to a much quieter weekday environment, which has ramifications for attracting office workers (and others) to stay for dinner,” said Colin Geoffroy, the president of G Hospitality, which owns GPub, Sarto, and the Ballroom and Rooftop at the Providence G. “Many restaurants, including ours, that used to provide lunch seven days a week are not anymore.”

At the end of 2021, nearly 16 percent of office spaces in Providence were vacant, according to market figures provided by CBRE. Companies like the Westwey Club, a downtown co-working space, are seeing workers return. “Mostly they want a break from their home office, or are in town on travel," owner Tom Nardacci said.Jonathan Wiggs/Globe Staff

At the end of 2021, nearly 16 percent of office spaces were vacant, according to market figures provided by CBRE, which is the highest vacancy rate for the area since 2016.

The Box Office, a structure of 12 small offices and studios constructed from up-cycled shipping containers, has hovered around a 25 percent vacancy rate throughout the pandemic, according to owner and developer Peter Gill Case. But due to the boom of co-working spaces even before the pandemic, Case said the Box Office dropped from more than 90 percent occupancy rates a decade ago down to 65 to 70 percent.

“We have always been able to offer an attractive price point since our offices are small and utility costs low. It remains to be seen how the Box Office will fare,” Case said. “If companies are looking to downsize physical space in a hybrid environment and don’t care about being in the center of the town, the Box Office may fill up once again.”

One Financial Plaza, also known as the Sovereign Bank Tower, is the second-tallest building in the state and stands alongside Kennedy Plaza at 28 stories high. About 95 percent of the building is leased, according to Alden Anderson Jr., senior vice president of CBRE. He told the Globe that CBRE just signed another lease with a company for 30,000 square feet of office space in the building.

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“We’ve been through these shocks in the system and we’re seeing a similar trend to what we saw in those days,” Anderson said, and mentioned the Great Recession of 2008 and the aftermath of 9/11. “There’s been a slow return to work, as is to be expected. But we’re starting to see some meaningful activity.”

What happens in the long run on the side of commercial real estate? “The jury is still out on that,” Anderson said.

But although leases are still being signed, it doesn’t mean everyone is physically returning to the office.

Universities like Brown and Johnson & Wales University, both of which have large campuses in downtown and surrounding areas, are mostly back to work. But in both cases, thousands of staff members who don’t have to be on campus at all times have the option to work fully remote or have a hybrid arrangement.

For employees, going back to work means having to dole out cash for expensive child care and potentially long (and pricey) commutes when it’s easier — and more productive, in some cases — to work from home, said Laurie White, the president of the Greater Providence Chamber of Commerce.

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“Major employers are still working through that. Some offices didn’t miss a single day. Others, with a large footprint, adopted protocol for in-person activity,” said White, who said her organization will have its first in-person event in June. The Chamber’s board meetings have been virtual, and won’t return in person until May. “I don’t think there’s any easy answers.”

White said over the next several weeks business should be picking up. Colleges and universities will be hosting commencement celebrations, the Rhode Island Convention Center is booking up, and the warmer weather brings outdoor dining and markets.

For employees, going back to work means having to dole out cash for expensive child care and potentially long commutes when it’s easier — and more productive, in some cases — to work from home, said Laurie White, the president of the Greater Providence Chamber of Commerce.Jonathan Wiggs/Globe Staff

But even so, some offices are unloading their downtown space, like Delin Design, a design agency on Dorrance Street. Others are working in a hybrid model, like NAIL Communications, an advertising agency on Eddy Street. Their lease is up at the end of this year and they are “exploring other options” suited for hybrid working and scalability.

“The pandemic has taught us that when it comes to work environments, one size does not fit all. In fact one size doesn’t even fit one,” said Jeanette Palmer, a partner at NAIL.

Co-working spaces, like Westwey Club at the Turk’s Head Building in the Financial District, are becoming “totally flexible” on memberships, offering day passes to get new people to come in and use the space for $25, as opposed to their $300 monthly membership.

“We are seeing four or five new faces a week now, and they are split between people who work for regional companies and national companies,” said owner Tom Nardacci, who said they’ve started hosting small networking events and began a partnership with the Innovation Studio, which has a depth of startup and business programs. “Mostly they want a break from their home office, or are in town on travel.”

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Zachary Weinberger, a partner at Sprout CoWorking, said the company lost all of its meeting room business for most of 2020 and 2021. Many of their work space and virtual address members stayed with them, he said, but revenue was off by more than 30 percent at the height of the pandemic.

“Despite the challenge, we did survive,” Weinberger said, and added their meeting room business is returning and membership is growing. Hourly and daily access to meeting and work space is also increasingly popular. “Every day we have a new sale.”

The Westwey Club at the Turks Head Building in Providence's Financial District.Jonathan Wiggs/Globe Staff

To continue filling the office worker gap, the Providence Warwick Convention & Visitors Bureau is looking to boost local spenders, too. In mid-April, the city will host its first Pizza Week, where participating restaurants will feature specialty pies that diners can only get that week. Nearly 20 restaurants have signed on, like Res American Bistro, which will serve a shrimp pizza with tomato confit, butternut squash, and cilantro pesto.

The pandemic nearly demolished the tourism and hospitality sectors, but many major corporations, like Textron Inc., an industrial conglomerate, flourished and have been back to “business as usual.” Their 225 employees have fully returned in person at their Providence office.

“We found that the remote tech was great. But it wasn’t a substitute for a human connection,” said Mike Maynard, Textron’s vice president of communications, who said the company started a phased opening of the office in June 2020. “We wanted to have informal meetings without having to schedule by e-mail or head across the street to grab coffee with a colleague. We also have a lot of early career employees and they want to find a mentor.”

Despite the uncertainty, Geoffroy at G Hospitality said there is hope for downtown.

“Workers returning to work will be helpful, but to an extent,” Geoffroy said. “There’s a number of residential units that recently went online, and as more offices become vacant, I’d encourage owners to convert them into residences, which should include workforce and affordable housing.

“As we think about the recovery for a place like Providence, it can’t just be a ‘comeback’ for the things that went away during the pandemic or be stuck on the things that will never come back — like office workers,” Geoffroy said. ”I don’t think we need to replace every single one of those people to make Providence an increasingly vibrant city.”

He added, “Let’s not let this crisis go to waste.”


Alexa Gagosz can be reached at alexa.gagosz@globe.com. Follow her on Twitter @alexagagosz and on Instagram @AlexaGagosz.