PROVIDENCE — The R.I. Commerce Corp. awarded a series of financial incentives on Monday to several companies that are either expanding into Rhode Island or proposing to develop significant commercial buildings.
Infosys Ltd., one of the largest companies in recent years to announce an expansion into the Ocean State, has promised to create 500 new jobs over the next five years.
The proposed technology and innovation hub to be built by the Indian company is one of three centers announced for the U.S., but the first one focused on innovation.
As an incentive, the Commerce RI board authorized up to $750,000 in Rebuild Rhode Island tax credits, aimed at the buildout of an as-yet unidentified location.
The company is in the process of finalizing its selection of a location in downtown Providence, according to Commerce Secretary Stefan Pryor.
“Generic though it may be at the moment, it does attach to a proposed real estate development project,” Pryor said. “The company will come forward with the specifics before the transaction proceeds.” The buildout will take place in two phases.
The company will also receive Qualified Jobs tax credits, with a value of up to $8.5 million, based on the number of jobs created and the length of time they are continued. The figure represents about 35 percent of the state taxes withheld for the jobs.
Another $500,000 will be taken from the First Wave Closing Fund, a flexible Commerce account, which will be directed to promote collaborations with universities in Rhode Island, according to Pryor.
The incentives will be paid out over a 12-year period, according to Jesse Saglio, the Commerce RI investment director.
“This is our largest jobs deal to date. We are very excited,” he said.
Gov. Gina M. Raimondo, who is chairwoman of the board, said the Infosys expansion represents a significant deal for the state and she recognized the Commerce RI employees who helped initiate the transaction. The company chose Rhode Island because of the talent coming out of the universities and colleges, she said. “It happened because the team was doing their job. It’s a turning point and it’s a big deal.”
In other business, the Commerce RI board approved incentives for a new hotel project in South Kingstown, which will be developed into a 100-room Fairfield Inn by Marriott. The location is a phase now in development at the Village at South County Commons. The development team is led by Thomas H. DiPrete, principal of Southern Rhode Island Hospitality LLC.
According to Commerce officials, DiPrete also developed the Hampton Inn hotel nearby.
The incentives awarded to the $18.7 million project amount to $1.8 million through the use of a tax increment finance district. Seventy five percent of the additional revenues generated by the hotel will be directed back to the developer for 15 years.
The rationale is a financing gap for the project, according to Saglio.
Commerce RI also authorized an increase in incentives for a multi-building project to be developed by Cornish Associates LP.
The four-building project includes the historic Lapham Building, as well as three adjacent buildings, and would renovate the structures into residential and commercial uses. The footprint of one of the buildings will be expanded slightly, according to Saglio, into an adjoining urban park.
The size of the incentive package, originally authorized by Commerce RI this year at $7.3 million, will be increased by about $3 million to $10.6 million total.
The enlargement of the project includes not only a greater project scale but also increased construction costs. The developer will invest another $2.7 million, Saglio explained.
The rationale for approval is the importance of developing downtown residential units to satisfy new employees attracted to expanding and relocating companies.
“When you think of the DownCity area of downtown Providence, if these buildings don’t get repurposed, and renovated, they sit there. They don’t get torn down. It is enormously important to the downtown … that there are quality places of the type in the neighborhoods where these folks will want to live,” he said.
Mary MacDonald is a staff writer for the PBN. Contact her at macdonald@pbn.com.
