An 82-unit luxury residential and commercial development planned for Federal Hill has been substantially scaled down because of concerns about the many competing projects in the city, cutting the price tag from $35 million to $7 million, one of the developers told Providence Business News.
Last April, PPG Hill LLC and the Cathedral Development Group unveiled plans for a condo and apartment project with 37,950 square feet of retail space on Atwells Avenue. Construction was set to begin last fall, after the demolition of three existing structures, including the former Rialto Furniture store.
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But while two of the buildings – a three and a half-story tenement and a building with a women’s clothing shop – have been razed, the furniture store remains. And there has been no progress on the condos.
Why? There are more than 400 luxury condos under construction in downtown Providence, leading the developers to question the viability of the Federal Hill project.
“We weren’t sure – we were uncomfortable with [the original plans],” said Robert R. Gaudreau Sr., managing partner of PPG Hill. “We see a lot of projects downtown.”
In fact, since Gaudreau and his partners revealed their plans last spring, developers have broken ground for three high-rises in the city: “One Ten” at 110 Westminster St., “The Residences” at The Westin Providence, and “Waterplace” at Waterplace Park.
Thus the developers are downsizing their initial proposal. Instead of 121,818 square feet of residential space with 82 units, recent plans call for about 36,000 square feet with 24 condos and no apartments. They’ve cut back the commercial space to 18,000 square feet, and scratched a 268-car underground garage, settling for a roughly 80-space parking lot.
Along with reducing the project’s price tag by 80 percent, the new plans would also spare the Rialto building from demolition, and use it as a key component of the project. The store is set back about 30 feet, and the new plans call for expanding it to the sidewalk, adding 3,000 square feet to the existing 14,500-square-foot floor plan.
The first floor would have 14,000 square feet of retail space, including a restaurant, with about 4,000 square feet for office space. Upstairs there would be two levels of condos. The parking lot would be off Spruce Street, which runs parallel to Atwells behind the Rialto building.
Perhaps the biggest change in the plans is the projected price for each condo, cut from about $700,000, to $300,000 to $400,000. Part of that price difference reflects the expected average size of each unit, now 1,100 square feet compared with the original 1,400 square feet, said Gaudreau. Also to reduce costs, the proposal no longer includes an indoor pool.
Meanwhile, many of the high-rise condos downtown are expected to sell for $1 million or more. “We were afraid of that market, and we decided that the Federal Hill marketplace targeted a different group of people,” said Gaudreau, who has hopes to sell the condos to professionals and empty-nesters.
Joseph R. Paolino Jr., former Providence mayor and partner at Paolino Properties, said the downsizing is “a wise development decision, because there are going to be more than 300 condos downtown being offered at more than $1 million.”
Paolino Properties shook up the city’s real estate market last fall, when the company and New York developer Athena Group co-purchased an apartment building behind Providence Place mall with plans to convert the 330 rental units into condos.
Renamed “The 903” from “Jefferson at Providence Place Apartments,” the development offers condos for between $195,000 and $400,000, focusing on the young professional market, Paolino said. He added that the sales strategy is to sell the condos before the more expensive high-rise units are completed downtown.
Gaudreau said his group aims to begin construction on the Federal Hill project, called “333 Atwells,” late this summer, and finish it by fall 2007. Because of the change in plans, however, the City Planning Commission must first approve the project, he said, adding that he hopes to get the proposal on the commission’s April agenda.
Project architect Lerner Ladds + Bartels is still finalizing the plans, said Gaudreau, adding that his group hasn’t hired a general contractor.
A hockey star at Brown University who graduated in 1966, Gaudreau played professionally and for the U.S. Olympic team. He has developed more than 3,000 residential units in his nearly 30-year career. His son, Robert R. Gaudreau Jr., owns project affiliate Cathedral Development Group.
