Opinion: The Fane Tower is history. Where does development go from here?
Joseph R. Paolino Jr. is Managing Partner of Paolino Properties, served as Mayor of Providence from 1984-1991 and was director of the Rhode Island Department of Economic Development from 1991-1994.
This month we witnessed the end to a seven-year saga when Jason Fane announced he was withdrawing his right to develop the $300-million Fane Tower on the old 195 land in Providence. The reason was simple: high interest rates. Several years ago, Mr. Fane admitted that the longer the process took to get the project started, the more factors such as interest rates and cost of construction materials would stand in the way. He saw the writing on the wall. Time kills development projects and that’s exactly what we saw happen with the Fane Tower.
The Fed wants to curtail economic expansion in order to get inflation under control by continuing to raise interest rates. I predict we will see many more development projects stalled or come to an end because of soaring interest rates. The question now for our political leaders in Rhode Island is how do we ensure the Superman building project does not face the same fate as the Fane Tower? I have three suggestions.
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One is to take the $25 million in state tax credits that were given to Mr. Fane for his project and give them to the Superman building with the condition of proving they have permanent financing for the project. Rhode Island is in a housing crisis and completing this project will help address it.
Second, that the state come up with a program to help subsidize interest rates for a period of at least two years. Not 100%, but perhaps 50% would be feasible. If action isn’t taken, we will see more development projects come to a halt due to high interest rates. It is something we can’t afford to let happen.
And lastly, the I-195 District Commission, which is newly headed by the adept Marc Crisafulli, should prioritize all remaining parcels for life sciences. What they don’t need are any more businesses relocating to the old 195 land from iconic downtown buildings. What will drive future economic growth in Providence is ensuring this land is set aside exclusively for life sciences, hospital, and university expansion. It is time to capitalize on Brown University’s new life sciences building and the new state health lab that was announced last fall by Gov. Dan McKee. Let’s start recruiting those companies who have paused development in Boston and Cambridge because of the new "millionaires tax" that was enacted.
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Jobs, jobs, jobs − that is what Rhode Island needs and the life sciences industry will provide them. It needs to be aggressively nurtured in order to achieve that goal, while also accomplishing the restoration of the Superman building. It is how we can compensate for losing a $300-million development deal. This stuff is not complicated and can be done if we all work together, because we all share a common goal; we care deeply about the future of Providence and future generations.
This article originally appeared on The Providence Journal: Ensuring development avoids pitfalls that doomed Fane Tower | Opinion Column
