Building in Providence: a tale of bureaucratic headaches and too many delays
PROVIDENCE — When Jason Fane began looking at Providence as a potential location to build luxury apartments, the New York developer said he was warned about the difficulties associated with building in the city. He recalls a prominent casino developer urging him to stay away.
He didn’t listen. In the nearly three years after he first applied to build a $300 million skyscraper — Rhode Island’s tallest — on a state-owned parcel atop the former I-195 land, the approval process has been littered with starts and stops. It took a year to win the support of the City Council, he still needs a state commission to sign off on the design, and he’s facing a lawsuit from Providence residents seeking to block the project.
“I have to say that if I understood the delays that were associated with it, I probably wouldn’t have done it,” Fane told the Globe in a recent interview.
State leaders have taken notice. Fearing that bureaucratic delays are sending the wrong message to others interested in building on the same 20 acres of prime real estate in Providence, the state Senate has already approved legislation that would strip municipalities of their zoning authority on certain land owned by the state.
The goal, according to Senate President Dominick Ruggerio, is to streamline the development process, removing the authority of cities and towns to block construction projects based on concerns about height and design, or in the face of public pressure.
Critics, including Mayor Jorge Elorza, say the bill is an affront to local control. They argue that municipal leaders put years of work into writing their zoning ordinances, and stripping their involvement could interfere with broader economic strategies.
Long before they started clashing over who should oversee zoning, state and city officials saw the I-195 land as a once-in-a-generation opportunity for Providence.
The state used more than $400 million in federal funds to relocate Route 195 southward, freeing up about 35 acres of land — 20 acres on developable parcels — in what has historically been known as the city’s Jewelry District. In 2011, the state borrowed $38 million to buy the land and transferred it to a seven-member commission appointed by the governor, with the input of the speaker of the House of Representatives and the mayor.
On its website, the I-195 Redevelopment District Commission says its goal is to “give developers a single entity for approving real estate development proposals and associated economic development.” It even includes a draft letter of intent that developers can print, fill out, and submit if they’re interested in one of the open parcels.
But the commission hasn’t proved to be the one-stop shop lawmakers envisioned. While the Rhode Island Nursing Education Center at South Street Landing has already been completed and the Wexford property at 225 Dyer St. is scheduled to open this summer, the commission still lists 14 parcels available for purchase, including seven that are larger than one acre.
Considering the strength of the economy and low interest rates over the last eight years, some say the true roadblock for development has been the process. Even though the state oversees the land, developers are still required to go to the city for zoning changes, design ideas, and property tax incentives. If there’s any opposition at the city level, approvals can take a year or more.
“I can’t imagine any place being more difficult than what we deal with here,” said Michael Sabitoni, the president of the Rhode Island Building and Construction Trades Council. “Doing anything of any significance has always been very difficult.”
While all cities have a certain level of red tape for developers to cut through before getting shovels in the ground, predictability is crucial, according to Scott Dragos, a vice president at commercial real estate firm CBRE New England.
In Massachusetts, he said, Governor Charlie Baker and Boston Mayor Martin J. Walsh have given developers confidence when setting construction timelines because they set expectations early on in the process.
“There’s not time wasted,” Dragos said. “It’s more streamlined. Time costs money.”
Fane, who has developed buildings in New York and Toronto, said he has learned about Providence the hard way.
His original proposal sought to build three residential towers along Dyer Street, but it faced overwhelming opposition from the outset. He returned with a plan to construct the tallest building in Rhode Island on the same plot of land, a 600-foot skyscraper so large it would even rank among the taller buildings in Boston. He calls it the Hope Point Tower.
Although he had the support of the state commission, Fane needed the city to approve a zoning change raising the maximum building height on the parcel from 130 feet to 600 feet. The City Plan Commission recommended the proposal be denied. The City Council approved it, but Elorza vetoed it after Fane wouldn’t agree to certain terms. The council ultimately overrode the veto, which prompted a lawsuit by a group of Providence residents who oppose the project. That case is pending.
Critics of the project say it’s bad public policy for the city to engage in spot zoning, the practice of making an exception to existing construction rules for specific projects. Others, including Elorza, have questioned whether a market exists in Providence for high-end apartments and condominiums like the ones Fane plans to offer.
Fane still believes his tower will ultimately be built, but said the delays may deter others like him, especially since it’s hard to predict what the market will look like years after a proposal is first made.
At one point, Pawtucket Mayor Don Grebien offered to expedite permits if Fane would move the project to his community, just north of the city — a sign that other municipalities were attempting to capitalize on Providence’s reluctance.
By comparison, Fane said, if he was pursuing a similar project in New York, the tower would be nearing completion. He said the work on a two-building condominium complex he built in Harlem started shortly before he began looking at Providence, and those units are already filled with residents.
“The state, in general, has been excellent — extremely supportive,” Fane said. “But until they change the process, they’re stuck with a complicated process.”
That’s why Ruggerio, the Senate president, crafted a bill that would remove Providence from the state requirements. His original proposal focused specifically on the I-195 land, but he later broadened it to include any large-scale, state-owned land citywide. House Speaker Nicholas Mattiello is so supportive of the plan, he included it in the new state budget that will be voted on this week.
Elorza calls the proposal an overreach. He said Providence has seen a spike in development throughout in other parts of downtown — including eight new hotels since he took office — a sign the city has been willing to embrace construction.
“It sets a terrible precedent by removing local oversight and input,” said Emily Crowell, the mayor’s communications director. “The existing zoning regulations were crafted based on extensive feedback and involvement from residents. Those residents and their local elected officials deserve a voice in the development process that will inevitably impact their communities directly.”
But others think the state needs to do something to spur development on the vacant land.
James Bennett, who served as Providence’s economic development director between 2011 and 2015, said the “city’s architecture is what it is because people have given it a lot of time to figure it out.” But he added: “There’s got to be some sort of trigger for a large investment to move down the pike.”
He said Fane’s proposal would be one of the largest private investments in state history.
“If it were me, I would be sleeping in his parking lot,” Bennett said. “I would not let him go.”