PROVIDENCE — For Jonathan Bittner, working toward a doctorate in astrophysics at Harvard University, Providence seemed the last place he would end up. Even after his software startup was accepted into an accelerator program here, he and his two partners figured they would stay just long enough to complete the three-month program, then head back to Boston.
But three years later, Bittner and his company, Splitwise, are still in Providence, kept here by office rents and housing costs that are half those in Boston and a tight-knit innovation community where mentors are easier to find and willing to help. The company has raised $2 million from investors and recently released the latest version of its app that helps roommates and friends split expenses. It expects to hire its seventh employee later this year.
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"The livability of Providence is amazing," said Bittner, 30. "It felt like we were meeting very talented people, and we still felt very close to the Boston and New York ecosystems."
Splitwise and a small but active tech sector are among the bright spots as New England's third-largest city continues to climb from the last recession. Once among the hottest and hippest mid-size cities in the nation, this community of 180,000 has yet to fully recover from the downturn that drove unemployment here above 12 percent in 2010 and wiped out nearly one in 10 jobs.
Six years after the recession ended, the jobless rate remains above the US average and employment in the metro area is still nearly 2 percent, or about 10,000 jobs, below the pre-recession level, according to the US Labor Department. The nation, meanwhile, recovered all the jobs lost in the downturn about a year ago, and Greater Boston did three years ago.
"Rhode Island's economy is still pretty weak," Governor Gina Raimondo said.
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But there are signs of revival. The owners of the Pawtucket Red Sox recently proposed moving the minor league team to Providence and building an $85 million stadium near the downtown area. Three local universities have launched a $200 million redevelopment of a former power plant site into an education center of offices, classrooms, and graduate student housing. Two developers have proposed investing an estimated $500 million to build labs, offices, retail, and housing near the Providence River waterfront.
In the downtown on a recent midday, people streamed in and out of the Arcade building, a recently renovated indoor mall featuring new stores, coffee shops, and apartments. Pedestrians bustled among the shops around Westminster Street. Designers and artists collaborated in coworking spaces in redeveloped mills. With the unemployment rate falling, there's hope among residents that the city can get back its groove.
"I see Providence as a C student that could be an A student," said Andy Cutler, a public relations specialist and loyal Providence transplant from Swampscott.
A decade ago, Providence was finding its way onto any number of best places lists as an affordable community offering the amenities of much larger cities, including top restaurants, an active arts and cultural scene, and major universities, including Brown University, Providence College, and the Rhode Island School of Design. Housing boomed as Providence attracted people from Boston (one hour away) and New York (three hours) looking for lower-cost urban living. Downtown commercial buildings and mills were converted to condos and apartments.
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But when the boom went bust, Rhode Island was hard hit, losing about one in three jobs in construction and manufacturing. The less diversified Rhode Island economy didn't have the technology and biotechnology companies that helped pull Massachusetts from the recession.
In a recent interview, Raimondo said that nearly half of the jobs the state lost were middle-wage jobs that pay around $50,000 a year. Of the jobs since created, about two-thirds are low-wage, paying near the state minimum of $9 an hour.
"The only solution," she said, "is to get this economy going."
Since taking office in January, Raimondo, a Democrat, has tried to do that, proposing what Laurie White, president of the Greater Providence Chamber of Commerce, called the "most pro-business, bullish economic development budget I've seen." The budget, which passed the House and will be considered by the Senate this week, includes more money for school construction and for a college loan forgiveness program to attract innovators to the state.
The Wavemaker Fellowship offers up to four years of loan forgiveness to 100 graduates starting businesses in the technology, engineering, and design sectors. Two-thirds of the awards will be set aside for graduates of Rhode Island colleges and universities.
The program is part of an effort by Raimondo and Providence Mayor Jorge Elorza to tap the talent coming out of the city's colleges and universities. Among the successes so far: Greg Nemes, who stayed here following his graduation from the Rhode Island School of Design in 2012.
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A furniture and graphic designer, Nemes, 29, works out of the Design Office, a co-working space, where he and a business partner run Work-Shop, a design studio. Nemes, originally from Cleveland, said the community at the co-working space has sharpened his work, helping him to win a grant to build art installations in the city and contracts to design spaces and websites.
"There is a strong network and cultural system for creative people here," Nemes said.
The tech sector, though, remains small. Bittner, the Splitwise founder, said it's difficult to find qualified workers in Providence and, at times, a challenge to persuade people to relocate. Venture capital also is in short supply. But, Bittner said, it's a lot cheaper to travel to San Francisco to pitch investors than it is to live there.
Lower costs — the average rent in Providence, about $1,700 a month, is about half of Boston's, according to real estate website realtor.com — have helped attract entrepreneurs while accelerators and co-working spaces have popped up for tech, alternative energy, and food startups.
Betaspring, a tech accelerator, was founded in an old jewelry factory in 2009, offering a 12-week program that provides startups access to mentors and investors. Since its founding, Betaspring has helped 89 companies, including Splitwise. More than 70 percent of the companies Betaspring has accelerated are still operating, including about 20 companies in the Providence area.
Allan Tear, Betaspring's cofounder, said the idea behind the accelerator was to provide a focal point for entrepreneurial activity in Providence. He also helped organize the Founders League, which represents 40 startups and offers co-working space and mentoring.
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Ultimately, Tear said, Providence needs bigger companies, the kind of corporate anchors that attract workers and help build the talent pool tech sectors need to thrive.
"The longer we're in stasis, the longer we kind of are treading water from a [workforce] perspective, the less likely we get critical mass into this thing," he said.
Local officials and businesses hope the redevelopment of 19 acres on the outskirts of downtown will help achieve that critical mass. Wexford Science and Technology LLC of Baltimore is teaming with a Boston developer, CV Properties, to propose transforming five of those acres into a district that would include up to 1 million square feet of lab, office, hotel, retail, and residential space.
Wexford, which is building a similar project in New Haven, near Yale University, said Providence's universities and educated workforce make it an attractive investment. "We see great elements in Providence," said Jim Cullinan, spokesman for Wexford.
Local officials and residents also have high hopes for South Street Landing, a joint venture of Brown, the University of Rhode Island, and Rhode Island College, to redevelop a former power generation station. The project, scheduled to be completed next year, will bring students, workers, and foot traffic to part of the city that's had little activity for a decade.
Changes happen in Providence, more slowly than in Boston, Tear said, but they are happening. And, he added, "they will change things fundamentally."
Job growth from the pre-recession peak
US: Up 2.4 percent
Boston: Up 6.2 percent
Providence: Down 1.7 percent
Jill Terreri Ramos can be reached at jill.ramos@globe.com. Follow her on Twitter @jillterreri.