Kettle Point project building steam

GOING HOME: Kettle Point, the former oil-tank farm in East Providence, is set to become home to market-rate housing as developer Churchill & Banks plans to break ground on a project this year. / COURTESY UNION STUDIO
GOING HOME: Kettle Point, the former oil-tank farm in East Providence, is set to become home to market-rate housing as developer Churchill & Banks plans to break ground on a project this year. / COURTESY UNION STUDIO

(Editor’s note: This is the second 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.)

It’s all happening quickly at the former East Providence oil-tank farm known as Kettle Point.
On the market with modest interest a little over a year ago, the 48-acre Providence River site is now under agreement with local permits for a 407-unit apartment complex and a $9.4 million tax-increment financing deal to help pay for infrastructure and the remaining chemical cleanup.
Without any major setbacks, Kettle Point developer Churchill & Banks of Providence hopes to break ground on the project before the onset of winter.
“We had a short leash to get it permitted and [the seller] BP was amazed at how quickly it happened, that a small, local company could get it done,” said Richard P. Baccari II, principal of C&B Kettle Point, LLC Development. The latter is a Churchill subsidiary focused on residential redevelopment of abandoned property. “Basically we are well ahead of where even I thought we would be.”
Real estate plans like these often collapse as quickly as they’re hatched, but as it stands, Kettle Point is now poised to become the largest success in East Providence’s decade-long effort to redevelop its industrial waterfront.
The most southerly of eight special planning areas under the jurisdiction of the East Providence Waterfront District Commission, Kettle Point aims to be the first nonsenior residential project completed in the district since the much smaller Ross Commons condominium complex in 2004.
That would give it a head start on the neighboring Village on the Waterfront development, which has been stuck in a lengthy environmental cleanup and waits for improvement in the condominium market.
Churchill & Banks wasn’t the first developer attracted to building market-rate housing at Kettle Point. Back in 2007, Gilbane Development Co. proposed 280 townhouse condominiums on the site, but pulled the plug on that project when the condominium market collapsed.
By June 2010, the Kettle Point land was back on the market.
Mike Giuttari, president of MG Commercial Real Estate, which listed the land, said he showed the property to a few people over the next two years, but demand was limited.
“You know you are not going to get a lot of people looking at a site like that, because with the complexity and engineering challenges, you are going to need a sophisticated player,” Giuttari said. “It has gone quickly, though. I am surprised at how smoothly it’s been.”
In its version of Kettle Point, Churchill & Banks chose to target the healthier rental market. Of the 407 total units, 276 of them are rentals and the apartment buildings housing them will be in the first phase of construction.
“The multifamily market is extremely hot right now,” Baccari said. “There is limited supply in the Providence market, especially in new construction. The downtown market is 99 percent leased up and this is really a great alternative to downtown or the East Side.”
On a gentle slope between Veterans Memorial Parkway, the East Bay Bike Path and Squantum Woods Park, Kettle Point will look out over part of upper Narragansett Bay, the Providence River and beyond it the industrial Port of Providence.
Designed by Union Studio architects of Providence, Kettle Point will evoke a village with paths and grassy common areas between a mix of different building types with peaked roofs and various colors to avoid uniformity.
A five-story, 78,630-square-foot “signature building” is the largest in the complex and will house 69 midrise condominium apartments.
The 276 rental apartments will be in three-story, walk-up buildings scattered around the interior of the site. On the southwest side of the property facing Narragansett Bay there will be 35 three-unit, attached-townhouse condominiums, 18 duplex condominiums and nine single-family, detached condominiums.
Baccari said rents will run anywhere from $1,200 to $2,000 per month.
Condominium asking prices will start at about $290,000 for single-level units and go from the mid-$300,000s up to $500,000 for the triplex, duplex and single-families.
At least 10 percent of the units will be rented below market.
But buildings are only part of the work planned at Kettle Point, which Baccari estimates will run to around $85 million.
Before BP took it over, Kettle Point was owned by Amoco and Arco and only the Arco half was cleaned up.
Along with the cleanup, Kettle Point will include a number of public features East Providence insisted on to support the TIF deal.
The road looping into and through the site will be public and lead to a new 40-space parking lot for the East Bay Bike Path, a public beach, three small parks, a new access point to Squantum Woods Park and a new fishing pier rebuilt from an old oil offloading dock.
Of the 40 acres that aren’t wetlands, about half will be developed and half will be left as open space, according to a presentation to the Waterfront Commission.
Kettle Point will also build its own connection to the city water and sewer system.
Tax-increment financing packages, in which a community borrows against the anticipated increase in tax revenue from a project to help build it, is one of the Waterfront Commission’s chief developer incentives.
For the Kettle Point TIF, the city has agreed to borrow $9.4 million that Churchill & Banks can use to finish the cleanup and build out the parks, roads, water and sewer lines.
In its current state, the Kettle Point property is generating about $23,000 per year in property taxes. When the project is fully built, it is expected to generate approximately $700,000 per year. Over the 25-year term of the bonds, 60 percent of the annual difference between the baseline and new assessed value will go toward paying back the borrowing. “Without the TIF this wouldn’t be possible,” Baccari said.
East Providence also granted a TIF to Village on the Waterfront.
Since the fall of 2011, Chevron has been doing site work and remediation on the 26-acre property, which, once complete, it hopes to sell to developer Providence Realty Investment LLC.
Michael Hennessey, an executive with Providence Realty Investments and chief operating officer for Village on the Waterfront, said if the cleanup and permitting are done in time, construction of the project’s first of five phases could begin by the end of 2014.
In addition to the condominiums, Village on the Waterfront plans include 37,000 square feet of shops, a public boardwalk and dock, plus the final southern extension of Waterfront Drive.
Hennessey is aware of the movement at Kettle Point, but said it does not affect Village on the Waterfront.
“We have had that in the market-conditions analysis as if it was built,” Hennessey said.
At Kettle Point, Baccari said in addition to local approval, his project has conceptual endorsement from the R.I. Department of Environmental Management and R.I. Coastal Resources Management Council. He is still waiting for final approval from those agencies and the R.I. Department of Transportation. After that, he has to go back to East Providence for a subdivision plan, but all of these consist of mostly technical questions, he said.
C&B Kettle Point has hired DiPrete Engineering Associates Inc. of Cranston for much of the technical heavy lifting.
Baccari said he is working with three banks on financing, but the loans are contingent on all of the permits being finalized.
“I think banks are excited to get into a big project,” Baccari said. •

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