Ruling on pier sale cost city

FROM THE SCRAPS: The former Promet land will now be home to Sims Metal Management's primary export terminal as well as a ship-repair yard. / PBN FILE PHOTO/FRANK MULLIN
FROM THE SCRAPS: The former Promet land will now be home to Sims Metal Management's primary export terminal as well as a ship-repair yard. / PBN FILE PHOTO/FRANK MULLIN

Six years before it was part of a $16.8 million sale to an international metal recycler, the Promet Marine Services pier on Allens Avenue was nearly sold to the city of Providence for a more modest price of just over $1 million.
But that deal was struck down by the R.I. Supreme Court in a decision that supporters of waterfront development point to with dismay as a key reversal that helped stymie proposals to rezone the area and open it up for nonindustrial uses.
“The city got screwed,” said Providence Ward 10 City Councilor Luis Aponte, the most vocal advocate for waterfront rezoning on the council. “Given the size of the parcel and where it is located, it may have cast a whole different path for the types of activities that could have occurred down there. It could have been a very different terrain than what is there today.”
Not everyone thought or thinks city ownership of the old state pier would have been a good thing.
The former owners of Promet, David and Joel Cohen, have fought to keep the working waterfront industrial for years and after selling their business to Sims Metal Management this fall point out that the property is now producing tax revenue and high-paying, blue-collar jobs.
Mayor Angel Taveras, who was not in office during the aborted city purchase, supported Sims’ purchase of the Promet property.
But at the very least the cash-strapped city lost out on a very valuable piece of land that it could have sold down the line at a handsome profit.
Now the home of Sims Metal Management’s primary New England scrap-metal export terminal, as well as the Promet Marine Services ship-repair yard, the pier at 242 Allens Ave. a decade ago was owned by the state, which had maintained it since condemning the property in 1911.
In 2004, the state decided to sell the pier, which Promet had been leasing for years with a contract that guaranteed it could remain as a tenant through 2021.
As it turned out, Promet owners David and Joel Cohen, under the corporate name Tidewater Realty, won the bidding for the state pier with an offer of just over $1 million, their long-term lease being a likely factor in the low price. But under state law, the city had a right of first refusal on land and could match any offer.
When learning of the proposed sale, city Planning Director Thomas Deller wrote the state to say the city would only be interested if Promet did not want to buy.
Before the sale to Promet went through, the issue was brought to the city council, which decided it did want to buy the pier and directed the Providence Redevelopment Authority to act as its agent to buy the property for the same terms offered by Promet.
Hearing this, the state canceled the sale to Promet and the Cohens sued the city and state for breach of contract in a case known as Tidewater v. State of Rhode Island and City of Providence.
In Superior Court, the sale to the city was upheld, but after the Cohens appealed, the state Supreme Court in 2008 struck down the sale on the grounds that the Providence Redevelopment Authority was only authorized to buy “blighted” land, which the pier was not.
It was a ruling that came down amid the legal fallout over the U.S. Supreme Court’s controversial decision in Kelo v. City of New London (Conn.), in which the high court struck down that city’s attempt to seize land through eminent domain for private development.
“Kelo was a taking for economic redevelopment and there was a lot of backlash,” said Michael Burger, who teaches environmental, ocean and coastal law at Roger Williams University School of Law. “That was the concern here, that cities and states are overusing their power to take private property for private development. Post Kilo, the reaction is to see public economic development as more private than public.”
In the end, the city’s bid for the property was lost to a technicality, but one that played into fears about governments overstepping their authority to seize wide swaths of private property to give to favored developers.
The immediate aftermath of the Tidewater decision was mostly focused on whether other transactions involving the PRA, such as the Dunkin’ Donuts Center, could also be vulnerable to court challenge. But on the waterfront, the impact was to blunt the effort by then-Mayor David N. Cicilline to open up Allens Avenue, which is now zoned marine industrial, to allow a wide range of commercial and residential uses.
Fought by waterfront industrial businesses who argue rezoning will ultimately replace the working waterfront with shops and condominiums, the broad rezoning proposals of the Cicilline administration appear dead. The latest waterfront zoning change being discussed by the city would add only office space to the current use mix.
Cicilline, who was elected to Congress last year, declined to respond to questions from Providence Business News about the future of the Providence waterfront or about the Promet case.
Those disappointed by the 2008 state Supreme Court decision included Patrick Conley, the developer who owns neighboring Providence Piers and supported Cicilline’s plans to rezone the area.
Conley’s vision of building on the waterfront relied on changes to the zoning, and Providence Piers is now bankrupt.
Of course, even if the city had bought the Promet property, there is no guarantee it would have led to rezoning or that officials wouldn’t have decided, as Taveras has, that an industrial use such as Sims’ metal-export terminal is the best use for the land. No move has ever been made to force the ship repair off the property.
“I would think that having the city own the site would have made zoning more likely, but I don’t know,” Conley said.
What is more certain is that, because of the court case, the cash-strapped city missed out on owning a very valuable property.
The 5-acre, former state-pier parcel was only part of what Sims paid the Cohens $16.78 million for. The sale also included the existing Promet business and adjacent land. Joel Cohen declined to discuss details of the sale to Sims or the court case.
But while it may not have reeled in $16.8 million, the city certainly would have done better than the $1 million it would have had to pay for the parcel.
“I think now it is clear why the Cohens fought any changes down on Allens Avenue,” Aponte said about the amount Sims paid for the property. •

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