‘Eyesore’ pitched as job catalyst

DYNAMITE: Once the site of the proposed Dynamo House project, the former South Street Power Station in Providence is being considered for a massive redevelopment, with Brown University and Commonwealth Ventures LLC eyeing the property. / PBN PHOTO/NATALJA KENT
DYNAMITE: Once the site of the proposed Dynamo House project, the former South Street Power Station in Providence is being considered for a massive redevelopment, with Brown University and Commonwealth Ventures LLC eyeing the property. / PBN PHOTO/NATALJA KENT

Brown University and Commonwealth Ventures LLC are receiving rave reviews for their bid to redevelop Providence’s empty South Street Power Station.
The decrepit brick shell of the former Narragansett Electric Co. plant has cast a shadow over the city’s fledgling Knowledge District since a plan to turn it into a hotel and museum called Dynamo House collapsed in 2009.
Filling the building with Brown offices and a long-sought, advanced nursing school for the University of Rhode Island and Rhode Island College should kick-start activity on other fallow properties in the neighborhood, members of the local development community say.
“I think it’s a huge winner,” said Karl F. Sherry, partner at Hayes & Sherry commercial real estate brokerage in Providence. “It has been an eyesore for the last five or six years and getting activity and people moving around there will jump-start that whole area.”
Interstate 195 Commission Chairman Colin Kane said the project should stoke interest in the 20 acres of state-owned former highway land his group is trying to develop nearby.
“Just having an incomplete, burned-out, vacant building in the neighborhood in a very prominent location adjacent to open space was a problem,” Kane said. “So anything that could rehabilitate it is a big deal. Not only did they solve the Rubik’s Cube, but this is the closest thing in the area to being shovel ready and deserves a standing ovation.”
The public reaction to the $206 million Brown proposal has been far warmer than responses to High Rock Development’s $114 million proposal to convert the downtown Industrial Trust Tower into apartments.
Both projects are requesting substantial government assistance, somewhere in the neighborhood of $70 million in combined city, state and federal investment.
But public-sector support, and confidence, in higher education far exceeds confidence in housing.
Where both Gov. Lincoln D. Chafee and Providence Mayor Angel Taveras opposed the High Rock proposal, both support the power-station plan.
Chafee in Brown’s news release called it a “promising project” that “will further cement Rhode Island’s reputation as a center of excellence in academia, health care, medical research and collaborative innovation.”
Asked why the mayor supported one proposal and not another, Taveras spokeswoman Liz White said “support of Nursing & Health Sciences” was one of the top priorities in his city economic-development plan. The power-station plan unveiled by Brown combines several major objectives that had proven unfeasible on their own, but proponents say are viable combined.
Both URI and RIC have wanted to build a new facility for their upper-level nursing students that would allow them to expand enrollment and take advantage of clinical opportunities at the nearby Providence hospital complex. Building a space that would accommodate both URI and RIC was intended to get the most out of the new building and URI President David Dooley suggested employing a private developer to add speculative laboratory space.
The state studied possible locations, including the South Street Power Station, but it was considered too large, expensive and difficult to convert.
Meanwhile, Brown was looking for more graduate-student housing and had solicited bids from developers about potential sites in the Knowledge District and College Hill.
One of the interested developers was Richard Galvin, a Brown graduate and founder of Commonwealth Ventures, a Connecticut-based real estate company with holdings throughout New England, including two buildings within the Davol Square complex and its parking lot (Brown owns 1 Davol Square).
Galvin had been looking to build graduate-student housing for Brown at Davol Square, but a stand-alone project didn’t take off.
As years passed with apparently little interest from commercial developers in restarting the Dynamo House project, Galvin became increasingly intrigued with the idea of bringing the much-larger power-station property next door into a more-far-reaching Davol Square project.
Along with its location, the power station was attractive because Dynamo House developer Stuever Bros. Eccles & Rouse had reserved $35 million in state historic tax credits.
And because the historic-tax-credit program was suspended, the Dynamo credits were the only way to access that level of state financing.
Galvin said the project will use $28 million in state historic tax credits plus $26 million in new federal historic-tax credits.
To keep those state credits alive, Commonwealth will create a new ownership entity for the property that will include Beatty Development Group LLC of Baltimore, the company that bought Dynamo’s mortgage to protect its earlier investment in the hotel project. Even with the tax credits and Brown agreeing to lease 120,000 square feet of the rehabbed power station, Galvin still needed another major tenant to make the massive project work and reached out to URI and RIC.
With the power-plant building leased, Galvin intends to build a new 150,000-square-foot apartment building for Brown international and medical students on the site of Davol Square’s current surface parking lot.
The building will also have 20,000 square feet of incubator office space and 15,000 square feet for shops and restaurants. And Galvin hopes to work with National Grid, owner of an abutting vacant lot, to complete a public river walk from Point Street to the planned I-195 park.
The last piece of the puzzle was parking and there the city stepped in and agreed to build a new 600-space parking garage on a surface lot across Point Street from Davol Square that Brown now leases.
In addition to state and federal tax credits, other recent historic-reuse projects in Providence have taken advantage of property tax “stabilization” breaks.
White in Taveras’ office said it was too early to know whether the project would be eligible for or receive a tax-stabilization deal.
She also said it was too early to know if the parking garage would generate revenue for the city, pay for itself, or cost the city money.
An analysis of the project by Brown consultants Appleseed estimated that it would generate 998 construction jobs and eventually 622 people will work at the complex, including 400 from Brown; 75 from URI and RIC; 80 from startups in the incubator space; 58 in restaurants and shops; and nine in building maintenance. It estimates $248 million in direct and indirect economic output from the project.
The General Assembly passed a resolution authorizing the state to negotiate leases for URI and RIC and the next step is to hammer out detailed agreements with each of the partners.
Galvin said the project is unique in his experience and compared its potential to the development going on in Boston’s Seaport District.
“We think there will be more interest in the I-195 land and more people willing to make bets on Providence because they see the state and Brown making these big investments,” Galvin said. •

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