I-195 student housing developer wanted ‘more’ says city, leaves when it doesn’t happen

PHOENIX PROPERTY CO. AND LINCOLN PROPERTY, the developer of a proposed $60 million student housing project on former Interstate 195 land in Providence, has pulled out of the deal, according to the I-195 Redevelopment District Commission.  / COURTESY PHOENIX PROPERTY CO.
PHOENIX PROPERTY CO. AND LINCOLN PROPERTY, the developer of a proposed $60 million student housing project on former Interstate 195 land in Providence, has pulled out of the deal, according to the I-195 Redevelopment District Commission. / COURTESY PHOENIX PROPERTY CO.

PROVIDENCE – A Dallas company that had proposed to develop private student apartments on a 1.25-acre parcel in the I-195 redevelopment district has withdrawn its interest, according to the redevelopment commission.

Phoenix Property Company and Lincoln Property, through the affiliate firm, Friendship & Clifford LLC, had proposed a $60 million development for Parcel 28.

The purchase and sale agreement for the site, signed Nov. 18, 2014, included a 90-day deadline for the company to complete its due diligence, and to secure a tax stabilization agreement with the city. If no tax agreement was in hand by the date, initially set for March 1, the developer could walk away from the project without putting down additional funds.

The company requested extensions of the due diligence deadline several times. When the latest deadline ended, at the end of August, the commission received a letter from the company indicating it didn’t want to proceed with the project, according to Dyana Koelsch, a spokeswoman for the I-195 Redevelopment District Commission.

- Advertisement -

“They have decided not to go forward,” she said. “They declined to ask for another extension.” The letter did not cite a reason, she said.

Earlier this year, in an interview with the Providence Business News, Jason P. Runnels, executive vice president and principal of Phoenix Property, said the securing of a tax stabilization agreement was critical for the project to move forward.

By late June, the City Council and mayor of Providence had announced the city would extend a standardized, 20-year tax stabilization agreement for projects exceeding $50 million located on the former Interstate 195 land and the Capital Center district (the first five projects would be able to receive the TSA through administrative approval, but after that, developers would be required to work with City Council to complete the deal). The deferred taxation policy went into effect in July.

A city spokesman said the company and city officials had had discussions about a tax stabilization agreement, but the discussions never progressed to a formal application. “It became clear that what they were looking for was beyond our most generous tax stabilization agreement,” said Evan England, a spokesman for Mayor Jorge O. Elorza. “They were looking for more.”

Runnels could not be reached Tuesday by phone.

The project would have placed a six-story, 500-bed student apartment building between Clifford, Friendship, Chestnut and Richmond streets. An adjoining parcel, a 0.24-acre site in private ownership, was part of the project footprint. That contract and purchase price were not disclosed.

The company has previously developed privately-leased, student apartments in cities across the United States, including in Boston in 2014, where it completed a 17-story apartment tower, marketed to students at Northeastern University. The company also has entered the markets serving Florida State University and the University of Texas in Austin.

In Providence, the negotiated price for Parcel 28 was $2.7 million. The purchase and sale agreement would have required the company to pay an additional deposit of $270,000 two days after the due diligence period ended, in addition to a $135,000 initial payment on the purchase.

The money paid by the company, less commission expenses, have been returned to the company, Koelsch said Tuesday.

Already, the I-195 commission has received an expression of interest from another developer for the site, which is near Johnson & Wales University.

Koelsch described the project as being in the “preliminary discussions” phase, but that it would also involve apartment construction. “We would expect it would have a residential component. There is a need there. It’s a desirable parcel.”

No posts to display