Providence wants $45 million from state to take over Cranston Street Armory, emails show

Talks between the Smiley and McKee administrations over the ownership of the building have been ongoing since the beginning of the summer

The Cranston Street Armory in Providence, R.I.Jonathan Wiggs/Globe Staff

PROVIDENCE — If the City of Providence takes ownership of the long-vacant Cranston Street Armory, Mayor Brett Smiley’s administration said it will need a minimum $45 million from the state to help with ongoing maintenance costs and capital improvements, according to new documents released this week through a public records request.

The records, which were first requested by The Providence Journal and later obtained by the Boston Globe, indicated that Smiley’s administration is eager to take the armory off the state’s hands, but that the cost could be burdensome on the city.

“Historically, this property has seen underinvestment, with maintenance over the years rightfully aligned with use of the property which was minimal,” wrote Smiley’s chief of staff Emily Ward Crowell on July 7 to McKee’s office. The cost of the armory’s future investments “are beyond the scope of what the city’s budget can absorb.”

Crowell wrote that if the city was to take over the deed for the armory, the city would request that the state provide grants that totaled $45 million over the next three years “to ensure that the city can care for the building while also making the necessary improvements to its core infrastructure quickly.”

These dollars, she wrote, “would ensure that the building is transferred responsibly with a clear plan for future success.” She proposed the city receive $20 million of the requested dollars during this current budget year. Another $15 million could be directed in Fiscal Year 2025, and the remaining $10 million in Fiscal Year 2026.

The state previously estimated that the ongoing maintenance and operations of the armory property will cost the state $28.5 million over the next 15 years if it’s not developed.

The inside of the Cranston Street Armory in December 2022.John Tlumacki/Globe Staff

The state sent the city a spreadsheet of possible funding sources, which could include $45 million of the state’s $1.13 billion in American Rescue Plan Act dollars from Congress. Those dollars could stem from $125 million for “broadband equity, access, and deployment,” $16.6 million for community learning facilities, $4 million for “out-of-school-time learning grants,” and $27 million for “housing priority projects.”

These federal funds would need to be obligated by Dec. 31, 2024, and fully expended by Dec. 31, 2026. The state also included a potential $7.3 million grant over five years from the Rhode Island Capital Plan Funds that could be directed to the city for the armory.

The armory is a piece of “Providence’s history and should be used as an asset to spur economic development, contributing to the vitality of the neighborhood and city where it’s located,” Crowell wrote.

None of the requested dollars had been committed to the city for the armory as of Thursday. It’s unclear where negotiations between the city and state stand regarding the armory’s ownership. McKee spokesman Matt Sheaff told the Globe discussions regarding the potential transfer of the building “remain ongoing.”

“At this time, terms are still being negotiated and discussed,” said Sheaff on Thursday. “A final agreement has not yet been reached.”

Smiley spokesman Josh Estrella said the city expects discussions “to be ongoing for the next several months.”

“What we need to do now is integrate the community’s desire for this space with the level and sources of funding that is available so that we can develop a plan that meets the needs of our community and is financially sound,” said Estrella. “The administration hopes to see a combination of small businesses, maker space, public spaces, community organization spaces, and potentially even housing.”

For decades, the urban castle that is the Cranston Street Armory has largely sat vacant, held by the state, and plans to redevelop the historic site were merely long-sought-after dreams of nearby residents and local businesses.

After years of back-and-forth with historic preservation committees, community members, and an outside development firm, the state finally released the $60.9 million plan for redevelopment from Philadelphia-based firm Scout Ltd. this year, which included an indoor soccer complex, state offices, and a small business incubator.

West Broadway Neighborhood Association President Rebecca Atwood leads a group of demonstrators outside Messer Elementary School in July 2023 to apply pressure for the state to redevelop the Cranston Street Armory. Ryan T. Conaty for The Boston Globe

While there was a willingness to work with Scout from neighbors and local politicians — including Lieutenant Governor Sabina Matos, who previously served as the president of the Providence City Council — the relationship between the development firm and the McKee administration took a turn earlier this year.

In July, McKee’s administration terminated its contract with Scout, which came months after Scout executives accused two Rhode Island state officials of inappropriate conduct that included a series of racist and sexist comments during a business trip to visit the firm’s property in Philadelphia. The same day the contract was terminated, the McKee administration also released a report from a real estate consulting firm hired by the state that determined the project would not be “in the financial interest of the state taxpayers.”

Critics speculated the governor was retaliating against the firm, but McKee said the cost analysis report showed that Scout’s proposal “put too much risk” on state taxpayers.

The March trip to Philadelphia, as well as a lunch McKee had with a local lobbyist and Scout executives, have spurred ongoing investigations by the Rhode Island Ethics Commission.

The two men who were accused of misconduct during the trip to Philadelphia in March are no longer employed by the state. Former state property director David Patten resigned in mid-June; James E. Thorsen, who previously served as director of the R.I. Department of Administration, stepped down in April to return to a federal position.

The misconduct allegations and McKee’s termination of Scout’s contract sparked an outcry among Providence residents. The state-owned property has largely sat vacant since 1996, when the Rhode Island National Guard announced it would move out. In December 2022, the McKee administration used the property as a homeless shelter.

Talks between the Smiley and McKee administrations over the ownership of the building have been ongoing since the beginning of the summer. During a June episode of the Rhode Island Report podcast, Smiley said the city was “prepared to put real financial resources into the proposal,” but that “the level of investment that we can make is not enough to get the project done on its own.”