Dustin Dezube is managing partner and principal developer at The Providence Group, an interdisciplinary real estate development organization involved in complex real estate development, design, construction and property management. Dezube is a longtime Rhode Island real estate developer and landlord, doing business under the name Providence Living, as well as Providence Realty Advisors and originally Providence Student Living Capital LLC, now with its own design firm called Providence Architecture + Building Co.
Dezube, who grew up in Newton, Mass., earned a bachelor’s degree in biochemistry from Brandeis University and graduated from Brown University’s Warren Alpert Medical School in 2013 before he ultimately pursued a career in real estate development and property management.
PBN: How many residential units do you rent out throughout the Providence area now, and what’s your biggest challenge in creating more units?
DEZUBE: We rent nearly 300 apartments and have plans to develop another 750 residential units over the next five years.
One of the biggest challenges we face is properly sequencing all of the projects in our pipeline. The complexity inherent in even the smallest development project – from getting city approvals to ensuring the right utilities connections are in place – makes thoughtful planning a must. When we successfully manage the complexity, it means more housing gets built more efficiently. When unforeseeable challenges arise, it has a ripple effect on our entire pipeline.
PBN: What’s the status of your plans for 180 George M. Cohan Blvd., the former Tockwotton Home? And what drew you to that project?
DEZUBE: Breathing new life into historic structures is very complicated, but it is our jam. The opportunity to redevelop the Tockwotton Home was too exciting to pass up. Partnering with the city of Providence from the outset has been fantastic.
Simultaneously pursuing a use variance and a tax stabilization agreement is very tricky, but it is the only way this project is possible. We are targeting a completion date close to the end of this year. It’s been a very exciting project for our team, combining our passion for both residential housing and adaptive reuse.
PBN: What other redevelopment projects are you most excited about that are currently in the pipeline for Providence Architecture and Building Co.?
DEZUBE: We’re incredibly excited about developing 27 East River, a large parcel situated on the waterfront, into bespoke residential units. It will be our biggest project to date, so we’ve hired a new director of construction and a new project manager, both from Boston, to help us bring it to life. We believe we can set the standard for developing new housing in Providence.
PBN: I keep hearing about how interest rates are so high and that they are stymieing construction. What’s been your experience?
DEZUBE: Unfortunately, that is all too true. Interest rates are the highest I’ve ever seen over the last 14 years, with rates for construction lending often exceeding 8%. It’s getting harder and harder to finance projects at the same exact time that the need for new housing is greater than it has ever been. High interest rates have translated into a drop in commercial real estate transactions and a drop in construction.
PBN: From time to time, we hear about Providence approving tax stabilization agreements for developers in Providence. What is a tax stabilization agreement and how do they help?
DEZUBE: A tax stabilization agreement is the most misunderstood tax policy. It is a stabilization. It is not a tax credit or a tax deduction or a tax break. No money goes from the city to the developer. Once a TSA is agreed to, the taxes never go down. They only go up. TSAs help projects attract capital and secure funding and are more important now than ever because of the high interest rate environment’s impact on the cost of building housing.
TSAs help Providence because at no cost, the city gets a new building that it can tax for the life of the building. In Providence, TSAs are necessary because the commercial tax rate here is one of the highest in the country. In fact, the effective rate of a Providence TSA is actually still more expensive than the standard tax rate in Boston. Without a TSA, Providence’s tax structure makes it nearly impossible to finance construction to build apartments.
Marc Larocque is a PBN contributing writer. Contact him at Larocque@PBN.com. You may also follow him on Twitter @LaRockObama.
