Commerce approves $10.4M in tax incentives for job creation, real estate re-developments

THE R.I. COMMERCE CORP. authorized the payment of tax credits worth more than $10.4 million Monday, including more than $6.4 million to Virgin Pulse, which will expand its Rhode Island operations and move into the former Providence Journal building in Providence. / PBN FILE PHOTO/BRIAN MCDONALD
THE R.I. COMMERCE CORP. authorized the payment of tax credits worth more than $10.4 million Monday, including more than $6.4 million to Virgin Pulse, which will expand its Rhode Island operations and move into the former Providence Journal building in Providence. / PBN FILE PHOTO/BRIAN MCDONALD

PROVIDENCE — The R.I. Commerce Corp. authorized the payment of real estate or job creation tax credits to three companies Monday totaling more than $10.4 million, two of which are establishing new jobs in a planned move to Rhode Island.
Virgin Pulse Inc. was approved by the Commerce RI board for two incentive programs: the Qualified Jobs Incentive Tax Credit, which rewards companies for establishing jobs in Rhode Island that exceed the state median salary, and the Rebuild Rhode Island tax credit, which helps developers meet financing gaps in building out a physical plant or office.
Virgin Pulse, a part of the Virgin Group founded by billionaire Richard Branson, in 2017 plans to move some 65 jobs now in leased space in the Jewelry District downtown to a larger space at the Providence Journal building, at 75 Fountain St.
Over the next four years, it has announced plans to create 292 new full-time jobs as part of that relocation, rather than move the jobs to its headquarters in Framingham, Mass.
The Rebuild credits, valued at up to $3,240,597, will allow the company to build-out its office space in two phases, with the state incentive covering no more than one-third of the expense for each phase, according to Commerce RI documents.
The first phase would involve 29,000 square feet, and the second would result in the renovation of 59,000 square feet at the former newspaper building, now undergoing a transformation to a mixed-use building.
The building is owned by a partnership that includes Providence-based development company Cornish Associates. The Providence Journal newspaper company is leasing a floor, and GE Digital recently announced it too would move to the building.
In addition to the Rebuild tax credits, the Commerce RI board also authorized up to $2,855,701 in Qualified Jobs tax credits for Virgin Pulse, based on the anticipated hiring schedules, and up to $341,798 in sales tax exemption on renovation-related expenses.
Virgin Pulse, which is a program for employee wellness used by 250 corporate clients, is part of a recognized global brand, noted Jesse Saglio, the Commerce managing director of financial services.
“The Virgin brand is an important brand. It’s a global brand. It’s one of the most recognized in the world,” he said.
Waldorf Capital Partners LLC, which plans to build a mixed-use development at Chestnut and Friendship streets in the Jewelry District downtown, consisting of 91 upscale apartments and retail space at street level, will be eligible for $2,975,356 in Rebuild Rhode Island tax credits, as well as $572,000 in state sales tax exemption for construction purchases.
The board determined the project met the criteria for the credits, including that the developer had invested no less than 20 percent of the total project cost, the latter of which is estimated at $32.8 million.
The tax credits will be payable on the issuance of an occupancy permit for the development, called Chestnut Commons, which also recently received incentives from the I-195 Redevelopment District Commission.
Waldorf Capital CEO Zachary Darrow said there is strong demand for and limited supply of upscale, modern apartments in Providence. “We just don’t have a lot of stock downtown,” Darrow said.
The development company is nearing the completion of a historic renovation of an existing building adjacent to the proposed site. Surplus Solutions LLC, a company based in Fall River that buys and sells used laboratory and biotechnology industry equipment, will move to Woonsocket in 2017, purchasing an existing building. To facilitate, the Commerce RI board voted to provide up to $454,681 in Qualified Jobs Incentive Tax Credits to the company over 10 years.
Surplus Solutions already employs 12 in Massachusetts, and plans to bring these employees and add four more in 2018, according to Saglio.
The median salary of the jobs created or relocated is expected to be about $51,000 in 2018, Saglio reported.
In an analysis of the economic impact, the relocation would result in a projected gross increase of $108,000 in taxes paid to the state in 2018, as well as an annual increase in the state’s gross domestic product of $3.2 million, the board was told, according to documents.

No posts to display