Olin Thompson’s Jewelry District walking tour begins at the corner of Richmond and Ship streets in Providence, on a plaza covered in stepped, wooden decking and stone pavers designed to be an inviting gathering place.
It’s a convenient starting point for the two-hour tour in which Thompson, an amateur historian, takes visitors through the dynamic history of one of the city’s oldest neighborhoods. The plaza is also one of 39 properties owned by Brown University in the district, a roughly 100-acre area nestled between the downtown to the north and Interstate 195 to the south.
The university says it has invested $341 million in the neighborhood, located about a half-mile from its historic home on College Hill. It has nearly 2,000 faculty members, staff and students who work, live and study there.
Most residents, including Thompson, and city leaders welcome Brown’s adoption of the neighborhood as its second home, after years of fruitless attempts to reinvent it.
But others wonder whether the city is bearing too much of the financial burden of the university’s ongoing expansion.
Most recently, the school’s commitment to the area has paved the way for multimillion-dollar developments, including a $165 million, 208,000-square-foot lab that will soon be under construction on Richmond and Clifford streets. The R.I. Department of Health will use part of the building for its new public health lab, and Brown has agreed to lease some of the lab space, too.
And Brown is also moving ahead on plans to erect an “integrated life sciences” building in the Jewelry District.
Many have praised the university’s investment in the former neighborhood of jewelry manufacturers that has been trying to reinvent itself for decades, applauding the economic development this involvement has brought in the form of jobs, capital and prestige. Supporters of Brown’s plans say there is plenty of room for the university’s ambitions and for private-sector companies to set up shop in what many call the Innovation and Design District.
But the growth of the institution beyond its traditional borders has also drawn attention for other reasons.
In many cases, Brown’s real estate purchases have kept valuable property off the city’s tax rolls because the university is a tax-exempt organization, even while it continues to build upon its multibillion-dollar endowment.
Grumbling about whether Brown is contributing its fair share to the city has gotten louder among some city and state officials now that long-standing agreements that had Brown paying millions of dollars annually to the city have expired or are about to expire.
City Councilman John Goncalves, whose Ward 1 covers the Jewelry District, has been one of the most outspoken critics of Brown’s increasing real estate holdings and its financial contributions to the city.
“We’re vigilant about Brown’s growth in general because as Brown continues to grow and expand, it results in land or real estate being taken off of our tax roll as a municipality,” said Goncalves, who is a Brown graduate. “That’s a big concern for us.”
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MIXED FEELINGS: Providence City Councilman John Goncalves applauds Brown University’s presence in the Jewelry District as revitalizing for the neighborhood, but he says the Ivy League school should be making a bigger financial contribution to the city.
PBN PHOTO/
MICHAEL SALERNO[/caption]
MOVING IN
Brown’s push into the Jewelry District started simply enough.
The university, which has long had a contentious relationship with residents on cramped College Hill when expansion plans are announced, instead leased a former foundry in the Jewelry District at 110 Elm St. in the late 1990s to house Brown’s advancement division, which needed more space than available on the main campus.
With that successful foothold, Brown bought the Speidel Co. building at 70 Ship St. in 2003 for $13.5 million and renovated it into modern laboratories to replace antiquated spaces on College Hill, said Russell Carey, executive vice president for planning and policy at Brown.
The big move came in August 2011, when then-President Ruth Simmons opened the doors to the new home of the Warren Alpert Medical School in the Jewelry District, a 134,000-square-foot space born from a $45 million renovation of a former jewelry manufacturing plant.
It was current President Christina H. Paxson’s arrival in 2012 that solidified Brown’s intent to plant roots, just as plans to relocate Interstate 195 and open 26 acres of land to development were becoming reality.
“There were a lot of conversations about how can our activities also create traction for commercial development, housing, biotech, startups, other types of activity,” Carey said. “With the relocation of highway and the 195 lands being available and the general opportunities in that area, that was an area where growth and development were desired.”
A 10-year strategic plan was drawn up that called for Brown to expand in the Jewelry District to “free up space on College Hill for undergraduate-focused departments and programs; and contribute to the economic and cultural vitality of Providence and Rhode Island.”
Such talk was applauded by city and state officials who had stumbled in marketing the area as the “knowledge district” in the early 2000s.
By 2017, Brown relocated almost all of its administrative offices to the South Street Landing along the Providence River, anchoring the revitalization of an abandoned power station along with Rhode Island College and the University of Rhode Island, all of which are leasing space there. The collaboration “brought the building back to life, turned it into tax-paying commercial property, and brought hundreds of new people in that space that had been vacant for 20 years,” Carey said.
Brown diversified its real estate holdings in 2021, spending $75 million to buy a 174-unit luxury apartment building called River House next door to South Street Landing. The property, converted to house Brown graduate and medical students, was kept on the city’s tax rolls under a tax stabilization agreement the city had with the previous owner.
Then last year, the university purchased 10 Jewelry District parcels from Care New England Health System – including four buildings that were already tax exempt. While two buildings continue to house CNE research operations, Brown is developing plans for how to use the other two.
Nevertheless, the size of Brown’s Jewelry District portfolio – which now includes 17 buildings, 20 parking lots and eight leased spaces – isn’t setting off alarms for those in the local real estate industry.
Joseph R. Paolino Jr., managing partner of Paolino Properties LP, says the university’s outsized presence won’t crowd out private-sector businesses or dissuade others from moving in.
Paolino called Brown University one of the city’s “best economic development engines,” mainly because of the number of jobs its investments are creating. But it goes beyond that.
“What they’re able to do is hopefully find cures for diseases through their research,” Paolino said. “So you’re expanding your tax base, you’re expanding your job base, you’re expanding your income base, and you’re employing people.”
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MAKING THEMSELVES AT HOME Since the early 2000s, Brown University has accumulated real estate holdings in the Jewelry District, effectively making it a second campus away from its original home on College Hill. Brown says it owns 17 buildings, 20 parking lots and an open plaza. It also leases spaces in five buildings and three parking lots. / SOURCES: CITY OF PROVIDENCE; BROWN UNIVERSITY[/caption]
TAX TALKS
Still, Brown’s buying spree – coupled with its $6.5 billion endowment – have some city and state leaders questioning if it should be chipping in more to the city.
While nonprofit institutions such as private colleges and hospitals are exempt from paying property taxes on noncommercial properties, the city has struck deals with the schools and other nonprofits for annual payments meant to offset some of the cost of providing city services to those organizations.
In a payment in lieu of taxes – or PILOT – agreement reached in 2003, Brown and the city’s other three private colleges have been paying annual fees to the municipality. That pact ends in May.
Brown had a second agreement with the city, signed in 2012 with then-Mayor Angel Taveras, which had the university paying an additional $31.5 million over 11 years. The last annual installment – a payment of $2 million – was made last June.
Negotiating new deals with Brown, Johnson & Wales University, Rhode Island School of Design and Providence College is now high on the to-do list for Mayor Brett Smiley during his first year in office.
It may be a tricky balancing act.
In an interview with PBN shortly after his election in the fall, Smiley said he was going into negotiations “hoping for a significant increase” in payments from the colleges.
But when asked about it in early February, his response was a bit more restrained.
Smiley acknowledged Brown has become an anchor in the Jewelry District and has shown a “willingness to be a tenant to catalyze private development.”
“We are hopefully about to hit the tipping point where the promise of a true life sciences cluster will take off,” Smiley said. “I believe we need to come up with an agreement that works for everyone, that recognizes Brown’s economic impact on the city, that supports the services they consume and identifies the other ways they can contribute to the fiscal health and vibrancy of our city other than just payments.”
Brown’s land holdings in the city are immense. A Providence Finance Department report issued a year ago calculated that Brown owned property with a combined assessed value of $1.3 billion as of fiscal 2021, and if the university paid full property taxes on its portfolio, it would owe $49.3 million annually.
Under PILOT agreements with the city, it paid about $3.4 million in fiscal 2022.
Goncalves says this is not enough, figuring Brown should be contributing at least $10 million a year.
“If the cost of living is going up for everyone else in the city, there is no reason why the wealthiest institutions aren’t expected to contribute more, particularly during a housing crisis,” he said.
Goncalves said he does not deny Brown University’s role in building out the biotechnology infrastructure the city needs to stand out and compete with other leading cities such as Boston. But the implications of Brown’s expansion in the city can’t be ignored.
Most of Brown University’s properties – including academic buildings and dormitories – are untaxed. There are some exceptions, including the River House apartment building in the Jewelry District, which Brown bought through the subsidiary River House Holdings LLC. The university paid nearly $1 million in taxes on the property in fiscal 2022.
But Goncalves argues that converting the building to student housing removed almost 200 units from an already tight housing market.
“Brown is an incredible economic driver, but we’d like to forge a greater partnership and revisit the model,” Goncalves said.
It’s not that Brown is unwilling to talk.
The university acknowledges that it and the other colleges are “beginning detailed conversations” with Smiley this month on voluntary payments to the city.
But in an emailed statement, Brown spokesperson Brian Clark says Brown has already been the largest voluntary financial contributor among nonprofit institutions in the city – more than $80 million from 2012 to 2022 – and it opposes any effort to tax properties used for academic activities.
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KEY PLAYER: Russell Carey, Brown University executive vice president for planning and policy, at an announcement in 2016 that Brown would be an anchor tenant for the Wexford Science & Technology building at 225 Dyer St. in the Jewelry District. COURTESY BROWN UNIVERSITY[/caption]
ON A MISSION
Sharon Steele has put out the welcome mat for Brown.
Steele, president of the Jewelry District Association, is known for fiercely objecting to projects that the group deems detrimental to the neighborhood’s residents and businesses.
She’s displeased with the direction of several projects that have been given the green light by the I-195 Redevelopment District Commission. Her complaint: too many residential projects.
That’s why Brown’s investment in the neighborhood is so crucial, Steele says, spurring more than just apartment buildings.
“We are well on our way to being a center for life sciences,” Steele said. “We’re not talking about small changes; we’re talking about [changing] the face of the Jewelry District. [Brown’s presence] has been extraordinarily important because they’ve led this charge.”
Not that there aren’t some concerns from residents about Brown’s plans.
When university officials, including Paxson, appeared at a Jewelry District Association meeting in December to outline its future plans, they fielded questions from several attendees about potential disruptions caused by construction and the comings and goings of lab workers at all hours when the buildings are operational.
Steele says Brown’s responses – including promising to provide frequent updates for neighbors – have eased worries.
Caroline Skuncik, executive director of the I-195 Redevelopment District Commission, says the commission’s choices of projects have been due to the real estate market. In recent years, rents for commercial and office space in Providence have not increased enough to justify construction costs, which have grown exponentially. But Skuncik says the next few years will likely be different.
“It’s always a balancing act,” she said. “We’ve done a lot of residential, so we’re trying to move away from it and focus on commercial.”
On that score, Brown has been invaluable, Skuncik says.
Brown University’s involvement in the district is creating a “cluster of activities,” she said. It’s attracting other parties, from private companies and investors to potential startups, driving the innovation sector and setting the foundation for a life sciences sector.
“If you look at innovation districts around the country, they all have to have an active research institution that serves as an anchor. Brown has been playing this role,” she said.
Case in point: the eight-story lab building set to be completed at Richmond and Clifford streets in 2025. The property is being developed by Ancora L&G LLC. The R.I. Department of Health will use the bottom three floors to replace its aging lab on Orms Street.
Brown committed to leasing 20,000 square feet for 10 years.
The project would never have been possible without Brown’s involvement, Skuncik says. “There’s a spillover effect of Brown’s investment in our projects. Because the developer had those commitments in place, they were willing to take risks,” she said.
Brown certainly benefits, too.
At the state-of-the-art Wexford building on Dyer Street, the university leases two floors – totaling 31,000 square feet of lab space – and is planning to lease a third floor.
“Larger projects that one entity like us probably wouldn’t do on our own, when combined with others and others’ need and developers … has generated tax revenue for the city and larger development opportunities,” Carey said.
‘MOVING THE NEEDLE’
For all the space it owns or leases in the Jewelry District, Brown is looking for more.
Last year, the university unveiled plans for an “integrated life sciences building,” a facility that will provide new laboratories for biology, medicine, brain science, bioengineering and public health researchers.
Brown says the facility will be needed because the Laboratories for Molecular Medicine at 70 Ship St. and other research facilities on College Hill and South Main Street are at or near capacity.
No wonder. According to the university, life sciences units at Brown include 20 biology and clinical departments and more than a dozen research centers and institutes.
The project will “bring more research activity into the Jewelry District and lots of collaborations with hospitals and increase the attractiveness for other types of life sciences research and commercial activity,” he said.
Matthew Fair, a partner at Hayes & Sherry Real Estate Services, sees very little downside to Brown taking up so much space in the Jewelry District.
“The investments they are making there are the only reason or the main driver for why others are coming in to invest and build new apartments and redevelop office space and open new retail,” Fair said. “They’re moving the needle more than anyone else in that area of the city.”
Thompson has lived in the district since 2006 and started the tours eight years ago. For him, the challenges that come with Brown’s expansion – such as construction disruptions, loss of parking and higher rents – are offset by long-term benefits.
“When Brown comes into the state lab, we’re going to see more retail coming in, more restaurants, more coffee shops, things like that, smaller service-oriented things,” Thompson said. “[Businesses] go where the people are.”
The tours, he says, celebrate the neighborhood’s historic buildings. And Brown, he added, has done its best to “pay homage” to that history by matching the look of existing buildings.
As long as they and other developers do this, he says, the district’s history is safe.
“There is history in the buildings,” Thompson said.
I don’t get Goncalves thinking. Here he says the city is in a “housing crisis” and then turns around and is against further residential development in the I-195 district. Actually this double talk is a natural by-product of a “transactional” mentality focused on the blame game when what the City pf Providence needs in its leadership is so much more depth.
I agree with Richard in general, but by no stretch of the imagination does Brown pay its fair share.
Richard – you are correct! These folks are against everything but will not tell you what they are for, wonder why?
It’s a challenge to say what is specifically Brown’s fair share except that it should be more given growth of Brown’s real estate holdings in the district and inflation. It’s useful to benchmark what “the in lieu of taxes” payments are by other universities and cities similar to Brown/Providence.
Here is a 2021 news release relevant to issue: “Yale is extending its lead as the institution that makes the largest annual voluntary contribution of any U.S. university to its home city,” Salovey said of adding $10 million to the university’s existing $13 million annual contribution.
Using a reasoned and balance approach, realize that Yale has an endowment that dwarfs Brown’s. Also that Harvard, far richer than Yale, pays Boston/Cambridge on a level more equivalent to Brown.