GeoNova dispute drag on progress

IDLE STATE: The former Ocean State Steel property is cleaned up, but $5 million in federal money has already been spent without producing any construction on the site. / PBN PHOTO/TRACY JENKINS
IDLE STATE: The former Ocean State Steel property is cleaned up, but $5 million in federal money has already been spent without producing any construction on the site. / PBN PHOTO/TRACY JENKINS

(Editor’s note: This is the final installment of a three-part series exploring the progress of East Providence’s 10-year effort to redevelop its waterfront and what it might mean for a similar effort underway in Providence.)

If the buzz of activity along Veterans Memorial Parkway signals progress in the redevelopment of the East Providence waterfront, the dusty vacant lot at the former Ocean State Steel mill in Phillipsdale shows the long road ahead.
Before there was an East Providence Waterfront District Commission, there were plans to clean up the contaminated mill site and turn it into a mixed-use village of loft apartments, shops and offices.
Unfortunately, the project, called East Pointe, fell apart with the collapse of the real estate market, becoming a cautionary tale of the challenges in reusing old industrial sites and potential pitfalls of complex public-private partnerships.
For the last four years, the city and GeoNova Development Co. LLC have been fighting in court over who now owns the 27-acre Ocean State Steel property.
The property is cleaned up to residential standards, but $5 million in federal tax dollars have been spent without producing any vertical construction.
This summer a judge ruled against the city’s motion to dismiss the case and ordered both sides into mediation to see if they can come to an arrangement to avoid trial.
“There was a lot of excitement around Phillipsdale and the brownfield at Ocean State Steel,” said Colin Kane, principal of the Peregrine Group, which developed the Ross Commons condominium complex across the street from the Ocean State Steel site. “They spent a lot of time getting permitting, but just hit bad market conditions. It’s hard to say what’s going to happen there.”
However the GeoNova land dispute is resolved, looking ahead at the next 10 years of waterfront redevelopment in East Providence, the northern section of shoreline that includes the GeoNova site, between Interstate 195 and the Pawtucket line, shapes up to be the biggest challenge for the commission. “There are really two areas of the city that we talk a lot about going forward: Phillipsdale Landing and the Valley Street area,” said William Fazioli, chairman of the Waterfront District Commission. “Phillipsdale Landing is an old mill complex that would be a perfect opportunity for a communal, urban mixed-use development. And the Valley Street area runs parallel to Waterfront Drive connecting dormant properties that need attention.”
Phillipsdale Landing is a 13-acre complex of mill and warehouse buildings now being leased to a mix of light-industrial tenants, but not filled or fully utilized.
Abutting the Landing on one side is the GeoNova property and on the other the former Almacs supermarket warehouse, another underutilized historic building.
Just a few years ago, Boston-based real estate firm Essex River Ventures had big plans for Phillipsdale Landing not unlike the GeoNova project, but Essex River’s plans also fell by the wayside in the recession.
Although not under the purview of the Waterfront Commission now, the TLA Pond View recycling facility a few hundred yards away from Phillipsdale Landing has also become a thorny issue for the city.
TLA Pond View went into receivership after the city ruled it was violating the zoning code. But the owner of the waterfront property it was on, who also owns a scrap-metal business there, successfully appealed the decision, putting everything up in the air. The outdoor recycling plant has been fought by neighbors for years and is seen as a drag on potential residential development in the neighborhood.
And just to the south of TLA Pond View, two empty oil-tank farms present new challenges and opportunities.
One, owned by Capital Properties, has been on the market since a lease with Global Companies LLC expired last spring and the oil distributor pulled its product from the tanks.
Then last month, Getty Realty Corp. put the 9-acre, 12-tank former Getty distribution terminal adjacent to the Capital Properties farm on the market at an asking price of $1.5 million. In a news release announcing a sealed bid process for the sale, Getty Realty indicated that the property’s future may not be as a tank farm.
“This site is strategically located and adaptable for a variety of industrial or other uses,” said Getty Realty Executive Managing Director Evan Gladstone in the release.
The deadline for bids on the Getty property is Oct. 15.
Eventually, the new Waterfront Drive is supposed to extend to Phillipsdale and all the way to the Pawtucket border, something Waterfront Commission Executive Director Jeanne Boyle said will eventually help the northern waterfront.
In the meantime, Boyle said land along the current stretch of Waterfront Drive up to Dexter Road is a priority area.
That includes an old 7-acre mill property, where Waterman Avenue meets the river, owned by Joel and David Cohen, who waited for years for the construction of Waterfront Drive to open up access to their site.
“There are a lot of possibilities of what might happen there,” Boyle said about the land along Waterfront Drive.
GeoNova Development first released plans for East Pointe in 2002, just as Rhode Island was putting together the East Providence Waterfront Commission.
The New York firm specialized in brownfield remediation but struggled to find private financing to buy and redevelop the Ocean State Steel site, then owned by Pimag Aktiengesellschaft of Liechtenstein.
Looking to jump-start development on the waterfront, East Providence secured a $2 million grant and $3 million loan for GeoNova from the U.S. Department of Housing and Urban Development.
But HUD required public ownership of the property, so when GeoNova purchased it from Aktiengesellschaft, it assigned the land to the city as part of a development and finance agreement.
That contract is the basis for the dispute.
The city argues that the HUD loan was secured by the Ocean State Steel property and reverted to East Providence when GeoNova failed to build 75,000 square feet of commercial space and create at least 145 permanent jobs within five years. GeoNova argues that the city misled it to believe the five-year deadline was a HUD requirement and the contract is void.
When planners first started working on waterfront redevelopment, city ownership of a large portion of the land was part of the design, but as the years have gone by, officials have avoided acquiring properties.
The GeoNova site was the only one in the waterfront district the city took over, and the experience may have played a part in making it shy away from the strategy. New London, Conn.’s poor experience with seizing private property for economic development in the early 2000s may also have played a part.
“I think it was just becoming less ambitious and realizing we were probably better off letting the private sector take its course,” Boyle said. “It is a volunteer commission, and we have enough work on our hands.”
Even in the southern part of the waterfront district, the commission has a lot on its plate.
Between Bold Point Park and the Village on the Waterfront site is land owned by the Providence and Worcester Railroad, which could become another residential development.
Where the waterfront meets Taunton Avenue, East Providence is working to revive its former commercial center at Watchemocket Square into an arts district with restaurants and entertainment venues.
And finally, the commission is waiting for utility National Grid to bury the electrical lines that run from the South Street Power Station in Providence to India Point Park and across the river to East Providence, just north of the Tockwotton Home.
As the commission moves ahead to its second decade, Boyle doesn’t see any significant change in strategic course, but hopes to engage the community even more in what it’s trying to accomplish.
“We probably need to do more to get the word out about how we operate and what our priorities are,” Boyle said. “For both the general public and businesses, it is tough for people to understand what is being accomplished on permitting and remediation because it can take so long.” •

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