PROVIDENCE — Rising construction costs have led to a financing gap for a mixed-use development that had been approved for a parcel of vacant land in the Interstate 195 Redevelopment District, according to the district’s executive director.
In a public vote Wednesday, the district commission voted to lower the sales price for the land to help the developer make the numbers work. The lot, which is Parcel 30, will be sold for $500,000 less than the previously agreed amount of $1,251,837.
Waldorf Capital Management LLC, the developer, plans to build 91 apartments and street level retail in the building, called Chestnut Commons. In December 2016, when the I-195 commission initially authorized the project, it was discussed as a $27 million building.
The construction costs have since escalated, said commission executive director Peter McNally, to the point where the project now faces a greater than $1 million financing gap, he said.
In addition to seeking a reduction in the purchase price for the lot, which is owned by the commission, the developer recently sought an increase in incentives through the Rebuild Rhode Island tax credit incentives.
The building has also had a design revision, intended to reduce construction costs.As a condition for its approval, the commission agreed to stipulate that in exchange for the lowered purchase price, Waldorf has to demonstrate that it is otherwise prepared to close on the land and begin construction of the project promptly afterward. Robert Davis, the commission’s new chairman, said the Boston development market is now leading to increased construction costs across the area.
Mary MacDonald is a staff writer for the PBN. Contact her at macdonald@pbn.com.
