Erik Bright, a co-founder of Providence’s Partnership for Creative Industrial Space, spoke with Providence Business News this week about what his group has done to help small creative businesses find space in Providence and what zoning changes would make some sections of the city more attractive to creative businesses.
PBN: Let’s start with a little background: When and why did Partnership for Creative Industrial Space start and what are your organization’s functions?
BRIGHT: We formed PCIS in 2004 with a mission to preserve, provide and advocate for affordable and sustainable commercial space in the Industrial Commercial Buildings District (ICBD) in order to facilitate artistic and small-business growth. PCIS accomplishes this through partnering within the real estate market, advocating policy at the city level and developing spaces for the creative, entrepreneurial and small-scale industrial businesses.
PCIS was formed in reaction to the significant number of Providence mill redevelopments that were displacing hundreds of artists and small businesses in order to make way for residential condominiums. We are strong proponents of the creative economy and believe that supporting small creative businesses is necessary for the long-term economic growth of Providence. This is especially true in a global market where we believe that the creative sector of our economy is the one way in which we can remain competitive with cheap labor forces overseas. Using China as the best example, it is important to note that while products are made cheaper and increasingly of better quality than we can produce here, they are still copying us. We are still the leading entrepreneurs, designers and inventors of the world and we have a history of thinking outside the box. Not just in fields like technology, medicine and design, but also in cultural fields like music, film and fashion. As long as we continue to design, package and market our products in this country and as long as we continue to remain the trend setters and export our culture, we can remain competitive and grow our economy. Currently, one of the biggest threats that faces our economy is the fact that four years ago the Chinese government mandated that it would create 600 new design schools across the country. They realize how important the creative economy is going to be to their long-term growth and this only emphasizes our need to support and encourage the growth of our young creative startup businesses here – and Providence is especially primed for this. We have a wealth of talented students graduating from our colleges every year in Providence and we are fortunate to have a lot of creative talent in our current work force that is adapting to stay innovative and competitive. PCIS’ goal is to connect the local creative sector with revitalization efforts that directly impact the fabric of Providence, its community and its attraction as a destination. It is our belief that the small businesses we nurture today will be the big companies that sustain our economy in the future and that we need to try to keep as many of them in Providence as we can.
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PBN: And has it become more difficult to link those artists and designers with affordable space now that the state is in a recession?
BRIGHT: It has actually become easier to find affordable commercial space in the City of Providence as a result of the current downturn in the real estate market. Certainly, the significant decrease in real estate values, the tightening of available credit for loans and the flood of condominiums for sale and rent have all but halted further redevelopments of buildings in the ICBD. This has stopped the dislocation of further commercial tenants in the ICBD. Instead – and unfortunately – we are seeing many small businesses struggling and closing in the current recession. This in turn opens more and more commercial space for lease and drives rental prices down on a square-foot basis. The rental decrease that we see is for the raw commercial spaces that are out there, but the drop in values are also evident in the high-end office and retail spaces as tenants are trying to downsize and relocate to cheaper spaces. This has made it easier for us to connect small creative businesses to affordable space. On the other hand, it has also set up a scenario where young start-up businesses are competing for affordable space with established companies that are downsizing.
PBN: The use of the Allens Avenue waterfront right now is one of the most contentious issues in Providence and your group has advocated bringing in some new uses. Why does that make sense?
BRIGHT: In February 2007, PCIS entered into a 10-year lease with Providence Piers for 35,000 square feet in order to create affordable commercial space for artists and small creative businesses at 200 Allens Ave – Conley’s Wharf – on the Providence Waterfront. At the time, this was a vacant commercial building that had been abandoned many years earlier and was not creating jobs or producing revenue for the City of Providence. We found this a perfect fit for our flagship project as the building was located within the ICBD and that it was undergoing a complete historic rehabilitation within the guidelines of our mission. We also found that the developer Patrick Conley understood the need to support and nurture small businesses in our state. More importantly, he understood the ability of the creative community to create a destination. This was a mutually beneficial arrangement whereby the creative community would establish new life on the waterfront for future development plans in exchange for a very affordable rent. We lease spaces at Conley’s Wharf from $5 to $9 per square foot per year in a market where equivalent office and commercial space annually leases for $15 to $20 per square foot. In most every situation, it is the creative community that moves into an underdeveloped or blighted area and creates a destination that is later realized by developers, who then push them out through their development. Our situation is a deliberate attempt to reverse the pattern where everyone can benefit.
The facts are very clear as to what we have done along an underutilized section of the Providence Waterfront from the intersection of Thurbers Avenue, north to the City of Providence.
We have brought in 43 new businesses to that section of the Providence Waterfront. They account for 110 full-time and 35 part-time jobs. These are the only businesses created on this section of the waterfront since 1994. Having said this, it is important to recognize that the restrictive W-3 zoning that was implemented by the city in 1994 has everything to do with the fact that no new businesses have located on this section of the waterfront. To that end, it should be pointed out that PCIS received a zoning variance for 200 Allens Ave. to allow arts-related uses within the historic buildings along Allens Avenue. We can only ask the question that if there were a need for other maritime businesses that wanted to be on the waterfront, why haven’t they relocated there in the past 15 years? The creative businesses that we have relocated on the waterfront do not compete with, replace or threaten the existing businesses that work there. In fact, in many ways they complement each other as commercial and industrial uses. We believe strongly in a mixed-use waterfront that complements and functions within the existing working waterfront and creates new jobs and revenue for the City of Providence.
PBN: Opponents argue that those uses would drive the current maritime industrial and waterfront uses out of the area – what would you say to those critics?
BRIGHT: We would first of all make the point that no one in this debate except for The Working Waterfront Alliance has put forward any proposal or suggestion that lends itself to the concept or practice of driving out the current maritime waterfront uses that are supported by the W-3 zoning on the waterfront. Comments have been made that these two companies need to clean up their environmental violations, but no deadline or proposal have been put forward to date as to how that should happen. Both Sprague Energy and Promet Marine Services provide invaluable services to our state in the form of energy demands and maritime services. Promet, in particular, is a classic example of a maritime industry that makes use of our deep water channel in Narragansett Bay, provides services that keep our commercial and defense fleets operating and provides training and high-paying jobs for our work force. Having said that, I would like to make the following factual points to those opponents who object to a mixed-use waterfront:
• In the one mile of waterfront from the beginning of Allens Avenue at Franklin Square south to Eddy Street, there are only two water-dependent businesses – Sprague Energy and Promet.
• Neither business would be prevented in a general business zone. Both would be grandfathered.
• The rest of the one-mile waterfront – other than Providence Piers – consists of a hazardous-waste-disposal facility, a lot for towed autos, a limo service, a staging and parking area for Verizon trucks, two huge, nearly empty warehouses owned by Cumberland Farms and a five-acre vacant lot.
• These above areas generate only a handful of jobs, very little tax revenue and most do not conform to the existing W-3 zoning.
• Rezoning would allow many new uses for this long stretch of underused waterfront. New uses, buildings and facilities on this land would increase jobs and tax revenue tremendously for the City of Providence and the state.
• As an example of rezoning, The Conley’s Wharf project has brought in 43 new businesses, 110 full-time and 35 part-time jobs to an area that has attracted no new businesses that we know of in 15 years.
• The proposed long-term development plan for Providence Piers would expand the cruise ship traffic that has been ongoing for the past three years and accounted for over 350 hotel nights in the City of Providence last year alone. Furthermore, it involves a cruise ship terminal and visitor center, a parking garage that would service the nearby hospital and alleviate their long-term parking issues. And there would be a hotel that would provide a shuttle to the hospital and short-term housing solution for friends, family and guests of patients in the hospital. All of these are commercial uses that do not interfere with the current uses on the waterfront.
• Rezoning would allow the public much greater access to the waterfront and expand city’s downtown.
• Those who oppose rezoning say they fear a loss of jobs within the existing uses, but their businesses would be grandfathered. We would suspect that what they really fear is that the redevelopment would force the existing businesses to comply with environmental regulations resulting in considerable remediation costs.
• There are ways to assist in the environmental remediation for these businesses and there are proposals in place to freeze their current property-tax base so that they are not negatively impacted by real estate development on the waterfront.
• Vacant or grossly underutilized land generates minimal jobs or tax revenue. The 18 parcels that make up the waterfront land east of Allens Avenue and north of the Thurbers Avenue intersection bring in a total real estate property tax of $776,027 to the City of Providence. Compared to the rest of the City of Providence, this is an embarrassing example of inefficiency and a clear statement of how this underdeveloped area places a heavy burden on the city’s recourses.
PBN: For PCIS, what important advocacy issues have you worked on in the past and what issues do you see as important to address for the future?
BRIGHT: In 2005, PCIS worked with legislators to pass the West Side Arts District, a tax-free zone in the City of Providence for artists and small creative businesses. The measure created an economic development zone with hope that the incentives would keep artists in an area where redevelopments were handily displacing them. Our intention is that the incentives will encourage artists to rent or purchase space in the area and hopefully to obtain ownership of some of the ICBD buildings.
In early 2008, we worked with city leaders to pass the Relocation Ordinance, one of PCIS’ first policy recommendations upon our founding. The ordinance enacts a policy within the ICBD where commercial tenants can receive a financial stipend and at least 90 days notice of termination, regardless of the term of the lease. It recognizes the importance of small businesses and the creative community to Providence’s long-term economic growth by calling developers of rehabilitation projects to recognize the hardship of tenant displacement and the negative impact on the local community and economy. Furthermore, it hopes to give these businesses the time and resources to remain in Providence.
Further recognition of the value that small businesses and the creative community bring to our city and state is essential to a healthier economy. With this understanding, proper support measures should be established to secure and sustain space that is essential for small businesses to incubate and grow.
The history of preservation and development incentives that we have not covered in this piece point to causes that have led to the displacement of businesses and the redevelopment of industrial spaces into residential units. The original intention of these incentives was to stimulate the preservation of mill buildings that characterize our city and speak to our history. In the end, they also worked against us and caused significant loss of small businesses in the past eight years – between 2004 and 2006, over 100 businesses employing at least 500 workers were displaced in the ICBD – because of the Automatic Live/Work variance that was granted to the buildings of the ICBD.
Fine tuning these incentives to properly address priorities that reflect encouragement of small business growth and support for the creative community are necessary. Such changes should include rezoning the ICBD so that it is subject to either a new definition of live/work zoning or the selective removal of the Automatic Live/Work Variance given to these properties based on how many existing businesses occupy each building. It is clear from an economic perspective of job retention that select buildings should remain commercial only.
Other PCIS recommendations include requiring a percent of redevelopment to remain commercial in order to be eligible for city subsidy and providing an automatic property tax stabilization for commercial redevelopments of an ICBD building into code-compliant industrial space.
