RENDERING COURTESY CV PROPERTIES LLC
POWER OF PLACE: Planned for a joint URI/RIC nursing-education center, the South Street Landing project will also include other pieces, such as Brown University administrative offices, a new parking garage and a residential/commercial component.
Building advanced nursing education centers for the University of Rhode Island and Rhode Island College was always going to be expensive.
The specialized classrooms and operating room simulators wanted by school leaders aren’t available in the kind of “off the rack” office space they could rent in downtown Providence or a suburban office park.
Throw in the complexity of building the facility in a historic former power station in Providence’s Knowledge District and the costs go even higher.
“If this were a flat, clean piece of land, we wouldn’t need to work with a developer. We build buildings all the time,” said R.I. Director of Administration Richard Licht. “But this is an extraordinarily challenging construction project because there are unknowns, and I don’t think the state is best equipped to do that. I would rather have the risk on [a private] developer.”
While the nursing center is complex, the project has a number of other moving parts that make it a much bigger project. First, the RIC/URI facility will share its footprint with Brown University administrative offices. In addition, South Street Landing includes a significant residential/commercial component as well as a new parking garage, elements that have injected that private developer, CV Properties LLC, into the process and brought the publicly stated price tag for what is known as South Street Landing to $206 million, $120 million for the redevelopment of the decommissioned South Street power station and $86 million for the rest of the project.
So how much of a premium will Rhode Island be paying to have the nursing centers located in one of the state’s largest and most prominent vacant buildings, with Connecticut-based CV Properties assuming the build-out risk?
An important piece of the financing of the project is the fact that, because the Landing, as it has become known, is being privately developed, the state has no direct construction costs to capitalize. Its costs are captured by a projected $6 million per year lease payment for 15 years, based on a plan that was made public last month, a total nominal cost of $90 million, not including options to buy or renew the lease.