The failure of Providence’s Fane tower is a lesson in politics and reality

David Salvatore had plenty of reasons to support a 46-story tower in downtown when he was council president. But he didn’t believe it was financially feasible.

Rendering of the proposed 46-story luxury residential Hope Point Tower on former Interstate 195 land in Providence.

If anyone in Providence deserves to take a victory lap now that the pipe dream of a proposal to build the state’s tallest building – a 46-story luxury housing tower – is officially dead, it’s David Salvatore.

Salvatore was the president of the City Council in 2018 when New York developer Jason Fane and his influential local lobbyists were putting on the full court press to try to convince city leaders to support a zoning change to increase the maximum building height for the proposed location – across from the Cambridge Innovation Center on Dyer Street and next to the pretty pedestrian bridge – from 130 feet to 600 feet.

Salvatore had every reason professionally and politically to back the project. He was, and still is, employed by the Rhode Island Association of Realtors, which almost by definition is required to support large-scale apartment projects like this one. He’s also a Democrat in Providence who always enjoyed the support of the building trades, which pour money into the campaign accounts of the politicians who vote in favor of big jobs like this one.

He had no interest in wasting time on the silly arguments from a handful of vocal critics – “the design is ugly” or “that’s too tall” – but he did have serious questions about the feasibility of the project. He didn’t think Fane could find the investors to pay for the tower, and he didn’t want to see the city and state left holding the bag if it failed.

The council voted to approve the zoning change anyway (with Salvatore abstaining) and overrode Mayor Jorge Elorza’s veto – but Fane announced last week he had officially given up hope of building what he had named the Hope Point Tower. In a statement, he cited “recent risk factors outside of my control,” but truthfully, the I-195 Redevelopment District Commission was fed up with his repeated requests for deadline extensions on a variety of issues.

So does Salvatore, who is out of politics for the first time since 2010 after being term-limited on the council and losing a race for state Senate last year, feel vindicated? Not really. He’s not looking to spike the football.

“I had long, hard conversations with people on both sides of the issue,” he told me Monday. “My biggest concern was always the financing. I didn’t think it was feasible at the time, and I certainly don’t think it’s feasible now.”

Salvatore admits that he wrestled with himself over the tower because he has always viewed himself as supportive of development. He agreed with former mayor Joseph Paolino and politicians like Senate President Dominick Ruggerio that it would have been irresponsible to ignore a developer who wants to spend hundreds of millions of dollars in the city.

But Fane always balked when he was asked about financing the project, mostly offering some version of “trust me” when he talked to people like me. I admit that I fell for it. There were plenty of people in the development world in my ear who were raising legitimate questions about the viability of the tower, but I wrote them off as worried about competition from the eccentric outsider.

It’s not necessarily the City Council’s job to vet a developer’s ability to pay for their proposal, but Salvatore said he was especially concerned because “there were tens of millions of taxpayer dollars on the line” – in the form of subsidies – if the project got started but couldn’t be completed.

Of course, there’s no way to know what would have happened if Fane didn’t face initial roadblocks from Salvatore and former mayor Jorge Elorza, and then an extended legal battle over the zoning change (brought by residents, not the city) that cost him hundreds of thousands of dollars over several years.

The state Supreme Court ultimately sided with Fane last summer, but by then, just about everyone was starting to lose hope in the project. Between the COVID-19 pandemic, a spike in construction costs, and skyrocketing interest rates, there was very little chance that the tower would be built without even more public subsidies.

Paolino, who is still a real estate mogul in the city, pointed his finger at the politicians.

“Time kills development,” Paolino said in a statement. “The world has changed dramatically since the pandemic started more than three years ago. And the development world has also changed due to rising interest rates. Six years ago, interest rates were 3 percent. Today, they are 8 to 10 percent. There is no way a project of this magnitude could be successful with such high interest rates right now.”

The most important question now is what happens next. Behind the scenes, other developers have been reaching out to the I-195 Commission for months to express interest in the property if Fane couldn’t get his act together. But it’s unlikely anyone is going to propose anything that would be even half the size of Fane’s proposal.

For now, it’s going to be beautiful green space where dogs can run around and I can drink at the beer garden that’s open most weekends during the spring and summer. That’s great for me, but it’s not going to help the city or the state address our massive housing crisis.

Wearing his Rhode Island Realtors’ hat, Salvatore said he is optimistic that a new developer can make something happen with the land.

“I hope this is a learning experience for a lot of folks,” he said.