Before Providence’s renaissance, Capital Properties Inc. was known as the parent company of the Providence and Worcester Railroad Co. Today, it’s a major property owner, leasing land for some of the capital city’s highest-profile developments.
Capital Properties, a thinly traded, 11-employee public company based in East Providence that also operates an oil terminal, owns about 18 acres in the downtown area known as Capital Center.
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That land includes major developments such as the GTECH Corp.’s new downtown headquarters and the Intercontinental Real Estate Corp.’s 193-condominium development along Park Row West and Exchange Street.
According to President Ronald P. Chrzanowski, the company’s land came from the project that moved the city’s rivers and redesigned downtown. With the removal of most of the railroad tracks in the city, open space was created and split between interested parties.
In 1988, the firm’s primary business became property ownership when Providence Worcester split from Capital Properties. Since that time, major projects have been built on the firm’s land, which it leases to developers on a long-term basis.
Among the developments on Capital Properties’ land are the Citizens Bank Building at One Citizens Plaza and the former American Express building that Fidelity Investments is slated to move in to next month.
In the future, aside from the GTECH and Intercontinental projects, Chrzanowski said, a major development is planned for the Capital Properties land along the Moshassuck River. There, he said, Capital Cove plans to erect two buildings with 200 condominiums.
The project also would add a bridge across the river and extend the city’s riverwalk to Smith Street.
“So with those buildings that would be built along the Moshassuck River, you could actually walk out of your front door and onto the riverwalk,” Chrzanowski said.
Aside from owning key properties in Providence, the company also owns and operates an oil terminal in East Providence through a wholly owned subsidiary, Capital Terminal Co.
According to Capital Terminal President Avery Noe, Capital Properties had owned the land for years and had leased it to other operators. But when a lease ran up in 1996, the company made the decision to operate the terminal as well.
“When you lease the property to someone, they don’t have the interest in the property as you would if they owned it and operated it,” Noe said.
The home heating oil and diesel fuel terminal has undergone a major tank expansion in recent years. Noe said that the completion of the construction, slated for August, will bring the terminal’s capacity to 1 million barrels of oil – the second largest in Rhode Island after Motiva on Allens Avenue in Providence.
Capital Properties also owns Tri-State Displays Inc. – an outdoor advertising company that operates in Rhode Island, Massachusetts and Connecticut.
With all of the activity, Capital Properties has witnessed tremendous stock growth as its performance has strengthened, said company treasurer Barbara J. Dreyer: Since the first quarter of 2004, the price has jumped from a high of $13.72 per share to nearly $31.50 per share.
Part of the rise in price is related to the settlement of litigations, including a decision by the R.I. Supreme Court in 1997 stating that the city of Providence had illegally increased property assessments for properties within Capital Center.
Also, Dreyer said, the more land is leased out, the less Capital Properties has to pay in property taxes. The reduced expense has added to the company’s bottom line and offset the loss of revenue from the parking facilities formerly operated by Capital Properties.
“The property taxes several years ago were $2 million for the company,” Dreyer said.
“As each property goes under lease, those taxes are removed from Capital Properties, it ends up that our burden is tremendously reduced.”
