R.I. achieving ‘significant wins’ in job creation, development
Economic Recovery: With the October jobs report showing a private jobs roster of 431,900, eclipsing the pre-recession employment level of 430,800, Commerce Secretary Stefan Pryor said R.I. has regained the jobs lost during the Great Recession, returning the economy to full strength.
PBN PHOTO/MICHAEL SALERNO
HIGH PRIORITY: Commerce Secretary Stefan Pryor says manufacturing is an important part of Rhode Island's history and future. He said the Qualified Jobs Tax Credit was designed to meet the needs of manufacturers to help them stay and grow in R.I.
PBN PHOTO/MICHAEL SALERNO
IN PLAY: As companies look to make a move in the Northeast, Commerce Secretary Stefan Pryor said Providence is now "more in play," citing examples such as GE Digital and Trade Area Systems Inc. moving to the city.
PBN PHOTO/MICHAEL SALERNO
RHODY CHARM: Commerce Secretary Stefan Pryor said part of Rhode Island's character and charm is its "compliment of beautiful, historic structures." He says the Rebuild Rhode Island tax-credit program is designed to assist in the redevelopment of historic structures, adding that several such projects are ongoing.
PBN PHOTO/MICHAEL SALERNO
MAKING PROGRESS: With active construction of new commercial and housing facilities becoming more visible in the state, Stefan Pryor, who recently completed two years as the state's first commerce secretary, says he's proud of the work the state is doing but knows there's more to be done.
Stefan Pryor has reached his second anniversary as Rhode Island's first commerce secretary, a role that puts him at the intersection of job creation, business and housing development. In recent months, active construction of new commercial and housing facilities and adaptive reuse of older buildings and mills have become more visible in the state. New employers are entering the Rhode Island market, and developers are expressing interest in the Interstate 195 redevelopment district. "More than any other time in recent memory," he told Providence Business News, "we are in the game and achieving some significant wins."
You've been in your position [for] two years now. What has been your greatest challenge?
Understandably, as we emerged from the after-effects of the Great Recession, there's skepticism that lingers regarding the potential of our state ever to excel again.
That seems almost like a psychological problem.
Understandably. The Great Recession hit Rhode Island hard. I see multiple signs that the optimism is re-emerging. First, as pertains to private-sector employment, Rhode Island has regained the jobs lost during the Great Recession. We're very pleased the October jobs report showed a [private] jobs roster of 431,900. The pre-recession employment level that's considered the point of reference is 430,800. In essence, our economy has returned to full strength. Does that mean we are resting on our laurels? By no means. There is much work to be done to build an ever-stronger economy.
What have you learned about Rhode Island that you did not expect?
Every day I'm amazed anew by the degree of Rhode Island's excellence. The colleges and universities are perhaps the finest example. Our colleges and universities are ever more willing to contribute and getting ever better. Three of our universities [University of Rhode Island, Johnson & Wales University, Brown University] are building new engineering schools. Fantastic investments, as pertains to the future of our economy. Each and every time we bring a company prospect to the table, the universities step up.
In terms of redevelopment of existing buildings, new construction and job growth, has the pace been what you expected?
We're very pleased with the amount of activity that has occurred and is occurring. … We now have on the roster nearly 20 real estate transactions that have been authorized – [involving] Rebuild [Rhode Island], tax-increment financing and tax-stabilization incentives.
What would you describe the pace as?
Some people seem to think it's too slow.
I have had the benefit of having lived the cycles of economic development in other jurisdictions. Very often the first year is dedicated to establishing the policies and programs. The second year is dedicated with getting some subset of projects going, in terms of authorizations and approvals on a preliminary basis. Years three through six are the years in which we will be able to see some of the progress manifest in terms of construction, in terms of jobs materializing.
Gov. Gina M. Raimondo is two years into her term. Do you need a two-term commitment in order to get these things done?
We don't need to speak in terms of political cycles. It does require the kind of time span I'm describing in order to truly get traction and yield results. Having said that, we're very gratified that so many businesspeople, small and large businesses, are involved, and so many developers have stepped up. There are 19 economic-development transactions involving real estate. There are nine jobs transactions.
That is the number authorized. How many more are in the pipeline? Can you describe or quantify that?
There is a growing pipeline of projects. Every week, we're talking with new companies considering job growth or relocation to Rhode Island. When I say job growth, that includes existing Rhode Island companies. As it pertains to relocations, it includes jobs coming from other states.
Is there any way to tweak your approach to economic development to speed up the process?
I would simply say again, we're very pleased. The first deadline for the Rebuild [Rhode Island] program was around Thanksgiving last year, for developers to submit their applications. … This is a rapidly advancing process. We aim for more, and we will see more wins.
What is missing? Why isn't there more private investment coming in to the state?
Instead of asking that, I would ask this question: "How is it that we have successfully attracted private investment, even without subsidy? And how can we do more of it?" [Alexion Pharmaceuticals Inc.] would be a great example. Alexion recently did a substantial expansion. [We facilitated] with municipal approvals and with [adjacent] landowners, with dramatic success. No incentives. One of the lighting companies we attracted to Rhode Island was without incentives. The optimism itself is helping to propel development.
Are you seeing investment coming from financial centers that never really looked at Rhode Island before?
It's worthy of note that companies such as GE Digital have chosen Rhode Island when they've existed and are moving to other places in New England. Going from Fairfield, Conn., to Boston, as everyone knows. Trade Area Systems Inc. is moving from Attleboro to Providence. It certainly is the case as companies are looking … to make a move in the Northeast, we need to be more in play and we are now more in play.
Wexford Science & Technology LLC and CV Properties LLC have now moved forward with their plans for Phase I. What did it take to pull this project forward, from the state's perspective?
After a period of initial negotiations over several months in 2015, we arrived at the purchase and sale agreement [last] January. Over the course of 2016, the process involved a rigorous review of the project's financials by the I-195 commission and R.I. Commerce Corp. staffs, as well as a design review by the I-195 commission. During that time, Wexford negotiated [letters of intent] with the major tenants, Cambridge Innovation Center and Brown, which ultimately led us to the I-195 commission approving an investment in the project at their last meeting.
Has the sale of the company affected this project at all?
No, not from the state's perspective. We are pleased with the progress that the Wexford team has made to date.
On Hope Point Towers, there is great debate about this project, including its design. The developer indicated there could be as many as 1,000 apartments among the buildings. Are apartments the highest and best use for that land?
We believe the I-195 district ought to become a vibrant, live-work-play, 24-7 community. I happen to live in the [Jewelry District] neighborhood. I'd welcome more neighbors. It would contribute to the street life. It would contribute to the energy level. That's a positive. A mix of uses is positive. The question is whether it's precisely the right project, whether it fits our cityscape and our state, whether the state investing in such a project has the potential to achieve a catalytic effect, and whether such investment would be of an amount that would be responsible.
Does it put the state in an odd position if it agrees to incentives for new construction of housing, versus the renovation of an existing building for housing?
It is important that we transform historic, pre-existing structures and invest in ground-up, new development. These efforts can be complementary. Having said that, we are, on a periodic basis, introducing new potential commercial tenants to the "Superman" building development and ownership team. There is interest. That doesn't mean that any of the particular prospects we've introduced will materialize. We've introduced a new prospect as recently as two weeks ago.
Does the state have enough money to provide incentives for both sets of buildings?
In both cases, we need to conduct a thorough review. We need to analyze the project budget vigorously. We need to ensure the state's investment is wise, in that it leverages very substantial private investment, and that it will result in a very successful project.
In terms of the appearance of what's been proposed at Hope Point Towers … lately there seems to be an argument that Rhode Islanders may be too in love with the older skyline. Are we too quick to criticize something so different?
I don't think this is unique to Rhode Island. … I participated in the process regarding the rebuilding of the World Trade Center [site]. I was involved in the dialogue in Newark, N.J., about the new, ground-up office tower for Panasonic's world headquarters. … It's always the case that those involved in the dialogue need to weigh the various factors. Adding an element to the skyline, a new iconic element, can be very positive. It can revitalize a city's, even a state's, image.
Do you have an example?
One World Trade Center, what is sometimes referred to as the Freedom Tower. In its day, the Empire State Building. In its day, 111 Westminster, the "Superman" building. What used to be called the Sears Tower. A growing city is a healthy city. It is important that we add elements, so long as they fit and advance the city and its home state.
Do you think Rhode Island's affinity for its old, built environment is an impediment to economic development?
Part of Rhode Island's character and charm is its complement of beautiful, historic structures. Our Rebuild Rhode Island tax-credit program is designed so it may assist in the redevelopment of historic structures, and in fact there are several projects [ongoing].
Is there too much emphasis on that?
No, so long as it's joined by enthusiasm for new construction. That's why we designed the Rebuild program and the TIF program and the [tax stabilization agreement] program, so they may be used for both purposes. And, in fact, we're advancing a portfolio of projects that involve both. The Commons [at Providence Station] is a new construction project. The Ocean State Job Lot [distribution center project] is new construction.
Manufacturing is getting more national attention, it seems, with the election of Donald J. Trump. Is Rhode Island doing enough to support its existing manufacturers? What is Commerce doing to support both traditional and more highly skilled jobs in manufacturing?
Manufacturing is an important part of our history in Rhode Island, and it remains a high priority for our administration. One of our signature incentive tools, the Qualified Jobs Tax Credit, was designed to meet the needs of manufacturers, so as to help them stay and grow here. As a result, we've seen Greystone of Lincoln Inc., an auto-parts manufacturer, choose to expand in Rhode Island rather than move to Virginia or elsewhere. The program has also helped support other manufacturing projects [such as] the new Finlay pilot plant that will go into Quonset, and is supporting the move of [Lexington Lighting Group] over our border from Massachusetts into Rhode Island. … The Polaris Manufacturing Extension Partnership works with our manufacturers to make them more competitive. The Innovation Center for Design and Manufacturing is a multimillion dollar project to help Rhode Island's manufacturers generate new products, find new markets and create new business opportunities. Real Jobs RI is our program to train Rhode Islanders for good jobs at our manufacturers, and that program has partnered with the Rhode Island Manufacturers Association, [General Dynamics Electric Boat], and others to connect and train Rhode Islanders for jobs in manufacturing. It's worth noting that Real Jobs RI just received another $6 million in federal funding that will help us continue this important work. We've supported the creation of a satellite Community College of Rhode Island campus in Westerly. This will help train workers for the thousands of manufacturing jobs Electric Boat will be creating in the coming years. On top of that, we've got the P-TECH program started that's getting kids on a path from high school to a job, and at Westerly High School that's focused on manufacturing. All manufacturers today are hiring workers with a wide array of skill sets, and preparing our workforce to have the training they need to fill the jobs our manufacturers have is at the top of our minds.
What will be the 2017 legislative priorities for your office, the Executive Office of Commerce?
Stay tuned. … The governor will identify the ways in which we will continue and strengthen our efforts to create jobs for all Rhode Islanders and grow our economy.
Will there be a move to a more widespread tax policy that would benefit businesses, rather than incentives?
Our state has already made a lot of progress on this point. Rhode Island has the lowest corporate income tax rate in New England. Last year, we reduced the amount of unemployment taxes a business owes without harming the unemployment insurance fund, and the year before that we eliminated the consumption tax on energy for businesses. But there remains work to do in order to ensure that Rhode Island is optimally competitive.
Should the state provide more financial incentives to the biological sciences and tech industry to better compete with Massachusetts?
More than any other time in recent memory, we are in the game and achieving some significant wins. The Qualified Jobs Tax Credit has helped lure important tech and innovation centers for General Electric, Virgin Pulse, Finlay and Johnson & Johnson to Rhode Island. In addition, our Innovation Voucher program is helping our small businesses access research expertise to grow, such as biotech company EpiVax Inc., which is partnering with Rhode Island Hospital to develop new treatments. Talent initiatives [such as] the Wavemaker Fellowship are keeping the best and brightest working in Rhode Island. Our Network Matching grant program is helping expand Social Enterprise Greenhouse, which helps small businesses focused on social causes to grow in Rhode Island, and we've brought world-renowned MassChallenge to Providence, which has hit the ground running, helping build up Rhode Island's entrepreneurial base. The Wexford complex is moving forward and is bringing in Cambridge Innovation Center. … CIC is the premier developer of innovation ecosystems, and its companies have created [more than] 40,000 jobs since 1999. And we are engaging all the time with our tech and innovation community to see what more we can be doing to make the right investments and ensure that Rhode Island grows ever more successful. •