Smithfield’s gain is Providence’s loss.
Fidelity Investments last month started moving some of its workers into a new, mammoth office building on its 500-acre Smithfield campus, pulling a growing number of employees from the former American Express building next to the Providence train station.
By year’s end, the Providence location – which, at its peak, housed as many as 400 people from the company’s personal-investment division – will be empty.
The landlord, R.I. Gateway Properties LLC, is already searching for other tenants to take the place of Fidelity. At the same time, Alden Anderson, senior vice president and partner at CB Richard Ellis, the landlord’s real estate broker, said Gateway Properties is preparing a proposal intending to convince Fidelity to remain in the building in a limited way.
Fidelity’s departure from what is now known as the Gateway Building is certainly no surprise.
The Boston-based mutual fund company signed a three-year lease in 2006, agreeing to pay about $2 million annually and spending about $14 million on improvements. In return, Fidelity received about $360,000 in sales tax breaks.
The plan was to house hundreds of employees from the company’s Personal and Workplace Investing business unit until the new 577,000-square-foot building in Smithfield – what Fidelity has touted as the largest in Rhode Island – was ready.
Now it is ready, at least partially.
“We’ve got a state-of-the-art building that can get them all under one roof,” said John Muggeridge, general manager for Fidelity in Rhode Island. “[The Fidelity employees] have been very happy in Providence, but it was always understood to be temporary.”
The building in Smithfield at 900 Salem St. – the third for Fidelity on that wooded property along Route 7, a short drive north of Interstate 295 – will accommodate about 1,300 employees by January, according to Muggeridge.
Those workers will come from two areas of Fidelity – the Personal and Workplace Investing group and Pyramis Global Advisors, an investment-management subsidiary that handles institutional money. Fidelity says Pyramis has about $165 billion under management. “They’ll be managing that money out of Smithfield, which is pretty amazing,” Muggeridge said.
So far, only about 300 people have set up shop in the new building. That’s because Gilbane Building Co., the chief contractor, is still doing interior work on the four-level building, including installing drywall, electrical lines and ceilings.
Muggeridge says that only 25 percent of the building is ready to be occupied.
Last week, hundreds of construction workers swarmed the grounds around the building and inside too. Through the windows, workers wearing hard hats could be seen performing interior work in a vast room filled with metal studs. On the floor above, a half-dozen Fidelity employees conducted a meeting around a table in a finished conference room.
“The building is so large that we’re occupying floors as the construction workers are moving through the building,” Muggeridge said. “The spaces that are done are quite comfortable.”
When completed sometime in January, the $200 million building will contain 3,500 tons of steel, 35,000 square feet of stone, 115,000 square feet of glass, 4,000 hand-laid bricks and 400 pre-cast concrete panels.
Fidelity also footed the bill for traffic pattern changes along Route 7, adding some turn lanes and installing traffic lights. To accommodate the additional employees, there’s a 2,300-space parking garage under construction.
The building of 900 Salem St. was also designed to qualify for LEED certification, with energy-saving features such as adding plants on the roof to help control heating and cooling costs, and using a 6,000-gallon cistern to store rainwater, cutting down on storm runoff and providing a supply for irrigation.
The building is also slated to contain a full-service cafeteria, a gym – and even a 24-hour trading floor.
Muggeridge said those are indications that the building is not just a call center.
Part of 900 Salem St. will serve as the headquarters for Pyramis Global Advisors, which means high-ranking equity managers handlings millions of dollars of investments will be assigned there. “These are not entry-level jobs,” Muggeridge said.
In fact, Muggeridge said Fidelity expects that a steady stream of senior executives from publicly traded companies and other major institutions will come through the building both to research Pyramis’ offerings and encourage managers to make investments in their companies.
“There’s going to be some level of activity here with senior people from all over the country,” Muggeridge said. “It’s going to be interesting to see how it all develops.”
The building won’t serve as the headquarters for the Personal and Workplace Investing group, but the Smithfield location will have “very senior functions that have a national scope,” Muggeridge said, including overseeing telephone centers and managing branch offices nationwide. There will also be some product development and marketing duties there, too.
When fully completed, 900 Salem St. will bring Fidelity’s total square footage of office space at the Smithfield campus to 1.1 million, and there will be about 2,700 employees assigned to the three buildings.
It’s been 10 years since Fidelity first moved onto the 500-acre parcel in Smithfield. The site was chosen because of its location near the interstate as well as its proximity to high-quality schools such as Bryant University.
And the company has room to grow.
“The site allows us to expand at our own place,” Muggeridge said. “As we need more room, we can build. In an urban location, you can be constrained by the space that’s available around you.”
In fact, the original master plan for the site 10 years ago contained five buildings, Muggeridge said. The building at 900 Salem St., however, took the place of two of those planned buildings.
And there are no plans for additional office construction in the near future.
“We have enough growth space right now [in the existing office building], so we should be OK for a while, Muggeridge said. “But you never know.” •
