Commerce RI approves $13M in incentives for Ocean State Job Lot expansion, new hotel in Warwick

Hyatt Place
A RENDERING of the new Hyatt Place hotel in City Centre Warwick, which began construction last week, shows what the finished product will look like. The project of D’Ambra Construction will include $20 million in investment and create an estimated 145 construction jobs. / COURTESY D'AMBRA WARWICK HOTEL LLC

PROVIDENCE — Ocean State Job Lot will receive $7.8 million in state assistance to expand its distribution and logistics center at Quonset Business Park, if it moves ahead with the planned $49.1 million facility and creates more than 100 new jobs.

The state incentive package, approved by the R.I. Commerce Corp. board Monday, includes $3.1 million in Rebuild Rhode Island tax credits for construction of the facility, as well as what is expected to be $1.5 million in exempted sales tax for construction materials.

In addition, the state has agreed to provide up to $3.2 million in state Qualified Jobs Incentive Act credits if the company hires 125 new individuals, as planned, over a 10-year period.

In total, the package would supply the North Kingstown-based discount retailer with $7.8 million over a 10-year period.

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The jobs, which would cover a variety of positions, are expected to have a median salary of $47,000, according to Jesse Saglio, the Commerce RI managing director, and head of its investments group.

“There is a misconception, maybe, about what the jobs are,” he said, an apparent reference to jobs in the retail industry.

The company, which operates 120 stores in eight states, had come before the Commerce RI board in February, as the state General Assembly and political leaders were considering the RhodeWorks truck toll program, but said publicly it would not build its facility if the program were approved. The application was put on hold.

In the following months, the company hired consultants and investigated moving its distribution operations into other states, according to spokesman David Sarlitto.

The company, which employs more than 4,000 people, had $650 million to $700 million in sales in 2014. Established in 1977, it operates 16 stores in Rhode Island, in addition to its distribution center at Quonset.

In evaluating whether to move out of Rhode Island, the company heard back from consultants who advised that it would financially be more advantageous to move to any number of states, according to Sarlitto.

A comparison analysis by a third party, submitted by Ocean State, between an undisclosed site it was considering in Pennsylvania and North Kingstown indicated a substantial financial gap between the costs to build in Rhode Island, versus Pennsylvania, according to Saglio.

The financial incentives provided by Commerce will not make that up, he said.

“We have negotiated a deal that does not come anywhere near to filling that gap,” Saglio said.

In comments to the Commerce RI board, Sarlitto said the company was advised by its consultants that building the facility in Rhode Island would not be advantageous.

“Consultant after consultant said, go to Pennsylvania. Go to New Jersey. Go even north,” Sarlitto said.

In the end the company wanted to build in Rhode Island. The facility, on completion, will cover $1.2 million square feet.

In other business on Monday, the board authorized up to $1.4 million in Rebuild Rhode Island tax credits, and a sales tax exemption of up to $350,000, as well as tax increment financing for up to $3.5 million to help facilitate the development of a new hotel near T.F. Green Airport in Warwick.

The project, pursued by D’Ambra Warwick Hotel LLC, will replace what had been an asphalt plant operated by D’Ambra Construction, a manufacturer of asphalt and concrete. The upscale hotel will be operated as a Hyatt Place and will include 120 rooms marketed to business travelers.

The development, which could break ground by December, is part of the City Centre Warwick footprint in Warwick, a mixed-use zone that city leaders have tried to develop for several years.

After the approval, D’Ambra President Michael V. D’Ambra said he was thankful and pleased the development would move forward. He initially started plans for it in 2008, he said.

The hotel will eventually become part of a larger, mixed-use development of office and retail buildings, as well as a structured parking deck, he said, all within easy access to the InterLink rail and bus station.

He started initial conversations with Commerce RI three to four years ago, which were expedited when the new state incentive programs were launched under Gov. Gina M. Raimondo.

“I always felt it would happen, it was just a question of when,” D’Ambra said, after the meeting.

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