Joseph R. Paolino Jr. is managing partner of Paolino Properties LLC, the fourth-generation Providence real estate management and development firm that was founded in 1900. Paolino served as mayor of Providence from 1984 through 1991 and as U.S. ambassador to Malta from 1994 through 1996 under President Bill Clinton.
In January 2014, Paolino purchased the 20-story downtown office tower at 100 Westminster St. in Providence, together with two smaller properties at 30 Kennedy Plaza, for about $60 million. According to his website, Paolino is now the only Rhode Island resident to own a high-rise building in Providence. The 350,000-square-foot high-rise houses offices for Providence Equity Partners, Bank of America Corp. and the U.S. Attorney’s Office.
PBN: You've spent decades investing in Providence real estate through several different market cycles. How would you characterize today's commercial real estate market compared with previous periods of uncertainty, and what lessons from the past are most applicable now?
PAOLINO: This is the most challenging time for commercial property. Interest rates have dramatically increased and shaved any margin for profit. Also, the pandemic has had an effect and many of the larger office tenants, [which] have either consolidated or cut their space. Remote work has not been a friend to commerce.
What Paolino Properties has tried to do is separate ourselves from other types of buildings and create a campus feeling at 100 Westminster St. with the Beatrice Hotel, Bellini Restaurant [and] a new fitness center, which includes a pickle ball court.
PBN: Artificial intelligence is changing many industries. How do you expect AI to influence commercial real estate, whether through property management, leasing, development, investment decisions or the customer experience? Has it changed your work already?
PAOLINO: It has not changed us yet, but I am leaving that to the younger generation in the company who are more proficient than me. I am fortunate that two of my daughters are working with me and, quite frankly, I need their thinking and commitment to keep the company growing.
PBN: Many downtowns across the country are trying to redefine themselves as office demand changes. What do you think Providence can do differently over the next five to 10 years to distinguish itself from other small cities competing for residents, employers and investment?
PAOLINO: I am impressed with Steve Ross, who is the CEO of Related Cos. He built the Hudson Yards in New York City. Since the pandemic, he has moved to West Palm Beach and is making West Palm Beach as his next development project.
I think we need to think of ourselves as an artist and make downtown Providence the canvas. I would work with the universities and hospitals and plan their activities and expansions in the downtown. This would relieve congestion in the Providence neighborhoods and would be able to fill vacant office space, vacant buildings and parking lots, and create a new city.
It would be exciting to see graduate students live and work in downtown. Like it or not, eds and meds are the economy in Providence, and we should embrace it and not push it away.
PBN: Your family has been involved in Providence real estate for more than a century. What philosophies or business principles have remained constant across four generations, even as the market has changed dramatically?
PAOLINO: We are born and bred Providence. My father and grandfather always told me to maintain the integrity of our name. Keep your word, know that the person you do business with today will be your client and friend forever. Pay your vendors early so that you become their favorite client. These are good lessons that I have learned, but at the same time I need to be realistic about other factors.
The political agendas of well-meaning people can destroy an economy. We are not going to move out of Rhode Island, but when dumb decisions are made regarding tax policy, others will move. I am afraid with a lot of these policies that we have seen become law, the economic growth will slow down.
Let’s look at what has passed. The millionaires tax. Well, why does anyone need to stay here and just pay more taxes when they can go to non-tax states? The Taylor Swift tax on second homes. A person who lives in Lincoln gets penalized if they have a summer home in Narragansett. These are the two dumbest decisions I have seen the state make in a long time.
Then the governor puts a moratorium on charter schools, which is going to hurt the city of Providence and especially families from Latino backgrounds. Makes no sense. We need more education options, not less.
I hate taking one step forward and then playing defense because local and state laws get passed that are anti-business.
PBN: When people look back 10 or 20 years from now, what do you hope will be the defining achievements of your career – as a developer, businessman and former public servant?
PAOLINO: I would hope people will remember me as a decent and honest man who loved his city and goal was to make Providence or my real estate better then when I found it. All we do is pay rent to society and none of this lasts forever, but it’s important to me that if it was my tenure as mayor or as a real estate owner, that people recognize that after I found it, I made it better; otherwise, we are wasting time. We need to make the things we work on better for the rest of society.
Marc Larocque is a PBN contributing writer. Contact him at Larocque@PBN.com. You may also follow him on X at @Marc_La_Rock.
