PROVIDENCE – The developer planning to turn the former Providence Journal building into a boutique hotel with retail and loft apartments will not meet the December occupancy deadline set in his tax deal with the city.
Jim Abdo, the Washington, D.C.-based developer behind the $39 million Hotel Hive Providence project, told Providence Business News Monday that it is “inevitable” that he will need an extension on the tax stabilization agreement. The controversial agreement, which gives Abdo a $2.7 million break on property taxes over the course of the 20-year deal, required Abdo secure a certificate of occupancy within 36 months of its approval – which will be December 2022.
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Exactly how much longer it will take to redevelop the two vacant Westminster Street buildings – one of which formerly housed the Providence Journal – is unclear. Abdo said he is still working to secure the private financing to pay for the project, which has been difficult since the pandemic sank the hospitality industry.
“Hotels unfortunately right now are a dirty word in the world of financing,” Abdo said.
With that in mind, Abdo is thinking of nixing the hotel element of the project, at least at first, instead concentrating on more residential “micro apartments” that could later be repurposed as hotel rooms when demand returns.
Failing to meet the deadline, and changing the makeup of the project, gives the city the opportunity to reevaluate the terms of its tax deal, including, potentially, taking it off the table.
But Abdo said he wasn’t worried that would happen, despite the controversial nature of the original tax agreement which six of 14 city council members voted against.
“It’s too important of a project,” he said, adding that he is standing firm in his commitment to redevelopment with retail and residential. “It’s a complicated project and these are challenging times, but we always do complicated projects and we make it work.”
Council President John J. Igliozzi also said he was open to adjusting the existing tax deal to help make the project work, noting that the original agreement was inked before the pandemic hit.
“I think TSAs are even more important now than ever before because of what’s going on now economically and the aftermath of COVID,” Igliozzi said. “We have to give the developer an opportunity to turn it around.”
Whether the redevelopment of the long-vacant “Superman” building down the street will help jump start Abdo’s project, he was unsure, though he lauded the news as a sign of progress for the city.
The original Hotel Hive project called for 91 hotel rooms and 48 studio units, as well as a coworking space and outdoor cafe. The project also received $6 million in tax-increment financing from the state.
Providence Mayor Jorge O. Elorza did not immediately return inquiries for comment.
(Update: Adds comments from Council President John J. Igliozzi in ninth and tenth paragraphs)
Nancy Lavin is a PBN staff writer. You may reach her at Lavin@PBN.com.
