Hope Point Tower developer wants to revisit purchase agreement, relief from project deadlines

PROVIDENCE – The developer who has sought to build a luxury high-rise in Providence for the past four years has asked the I-195 Redevelopment District Commission to remove all project deadlines, given the COVID-19 pandemic, and to reopen the agreement for the land purchase.

So far, the I-195 district leadership has extended deadlines, but has not agreed to lift them entirely. And the commission wants to know what Jason Fane wants, before it agrees to remove those deadlines or renegotiate the purchase and sale agreement, according to its chairman.

“We don’t know what he wants and we’ve asked him to specify it,” said Robert Davis, in a June 19 interview with Providence Business News. “We don’t want to be in a position to agree to some unlimited timeframe.”

The current purchase and sale agreement, already renegotiated twice, gives The Fane Organization a release from purchasing the land for the high-rise if the state is in a recession at that time.

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The agreement sets the closing date at Dec. 31, 2021. If the economy slows for two quarters in 2021, Fane can push the closing back by another year.

Davis said he doesn’t know what Fane wants to revisit in the agreement.

According to documents released by the commission in response to a public records request filed by PBN, The Fane Organization is arguing that travel restrictions imposed by Gov. Gina M. Raimondo, as well as business closures, city service interruptions and other aspects of the COVID-19 pandemic have made it “temporarily impossible” for them to meet project deadlines.

A draft agreement, forwarded by the Fane group on April 17 to the commission’s attorney, cites the series of executive orders by Raimondo, as well as the declaration of an emergency by Providence Mayor Jorge O. Elorza, and the economic impact of business closures.

The proposed agreement would allow Fane to have a suspension of all timelines, in response to the global pandemic, from March 20 to the point where all businesses, universities and activity in Providence resumes. The agreement also states that deadlines would be lifted until normal activities in and out of Providence resume for foreign students, as well as New Yorkers.

At that point, the agreement states, “the seller and the purchaser shall adopt mutually agreeable, revised timelines and terms which are reflective of the economic conditions existing at that time.”

The I-195 commission has not met this month. Its June meeting was canceled. The developer, under its agreement to purchase the land, has agreed to cover the commission’s expenses in hiring outside professionals to help review the project. The developer also has agreed to cover the commission’s costs in defending the approval of Hope Point Tower through a zoning appeal.

Emails in April released by the commission show that the Fane group had not paid $50,000 for the third-party expenses initially due on March 31. That payment, as well as $75,000 due at the end of June, have now been extended to July 31, said Davis, who said he has the authority as chairman to make such decisions on behalf of the commission.

On May 13, the Providence-based attorney for Fane said the developer remains committed to the project, but expressed frustration that the I-195 commission had not yet met to consider the draft agreement that would remove the project deadlines.

“Current circumstances are not business-as-usual; our economy is in a rapidly worsening major depression and the [purchase and sale agreement] deadlines are no longer attainable,” wrote Scott T. Spear, a partner at Blish & Cavanagh LLP.

A week later, the commission’s attorney, Charles F. Rogers, a partner at Locke Lord, responded with his own letter. “Your draft amendment to the purchase and sale agreement includes a provision to the effect that once ‘normal activities’ are resumed, the parties will adopt ‘mutually acceptable revised timelines and terms.’ In order for the commission to evaluate this request, we must know with specificity just what ‘revised timelines and terms’ your client contemplates,” Rogers wrote.

While the pandemic has disrupted business activities in Rhode Island, Raimondo deemed construction an essential business and it was not stopped. In an update in May, the commission revealed that multiple developments in the district were progressing on schedule.

Davis, when asked whether Fane has an argument that the pandemic has disrupted construction, pointed to those other developments.

The agreement with Fane gave them latitude to make design changes and progress through pre-development over two-year span of time, but Davis said it’s not clear to him what the developer has done since gaining initial design approval in November 2019.

The documents released by the commission to the PBN include a May 14 exchange between Daria Fane, vice president of The Fane Organization, and Caroline Skuncik, the commission’s executive director.

In it, Skuncik said the level of detail in a required design development submission was not specific enough. “We were surprised that this was called a Design Development set, as it does not include any engineering drawings … which would normally be included at this level of design. Has the Fane team or [architect] engaged any engineers for this project?” Skuncik wrote. “We would like to see some more detail of your work over the last 8 months. What consultants have you retained? What is the scope of their services and where are they in the performance of their services?”

In response, Fane said the organization has made numerous changes to the high-rise design, including a lobby redesign to accommodate a larger package room, different elevator designs and smaller footprints for apartments, which reflect a changing market. The new designs for floors reflect “changes in our understanding of the market to have more smaller units, and fewer large, luxury units,” Fane wrote.

“All of these and many more changes and revised details do constitute design development, as we have moved forward in revising and finalizing the actual design for the building, taking it way beyond the preliminary drawings done for design review,” Fane wrote.

Mary MacDonald is a staff writer for PBN. Contact her at macdonald@pbn.com.