PROVIDENCE – The hotel part of the “Hotel Hive” project planned for downtown Providence is off the table.
In its place, the developer wants to turn the former Providence Journal building into an apartment complex with retail and coworking space, and is asking the city for a new tax deal to do it. The city Finance Committee was originally slated to take up and schedule for public hearing the new tax deal for the set of empty Westminster Street buildings on Thursday, although its meeting has been canceled, according to Parker Gavigan, a spokesman for the city council.
The request comes after several years of delays on the initial plan, which was a $39 million boutique hotel with retail and loft apartments. Jim Abdo, the Washington, D.C., developer of the Hotel Hive project, said in an interview on Wednesday, he changed his plans due to market demand.
“There are just too many challenges in the marketplace for financing hotels,” Abdo said. “The headwinds are just too hard to make that happen right now.”
Abdo also said that city leaders and residents were “pretty vocal” about the need for more permanent housing downtown, and called the apartment plan the “most plausible and logical option.”
The original, $39 million Hotel Hive project called for 91 hotel rooms and 48 studio units, as well as a coworking space and outdoor cafe. The amended project centers on 124 fully furnished “upscale” apartments which would be rented at market rate, with 10 dedicated parking spaces. There would also be 29,000 square feet of retail space including a pizza restaurant, coworking space and 1970s-style “Barcade” basement lounge, according to plans submitted to the city.
While Abdo said he still needs to line up financing and borrowing for his amended project, he is aiming to start construction by the end of the year, with an 18-24 month timeline until the work would be complete.
The original TSA for the $39 million project drew controversy, with residents, union representatives and some council members denouncing the tax deal, although it was narrowly approved by the city in December 2019.
The original agreement required the project to be finished and issued a certificate of occupancy, but an extension seemed inevitable with little progress achieved in the ensuing two-and-a-half years, which Abdo blamed on the pandemic.
The request by Abdo’s company, Westminster Partners LLC, for a new tax deal mirrors the original deal for a $2.7 million tax break over 20 years, which the city approved in 2019, according to Abdo.
“The only thing we are really shifting is the timing,” he said.
City documents state the new deal would start in 2022 and incrementally increase taxes annually, to reach the full amount of the renovated properties by 2042. However, the documents do not state the total value of the tax savings offered.
City spokespeople did not immediately respond to inquiries for comment.
Nancy Lavin is a PBN staff writer. You may reach her at Lavin@PBN.com.
Want to share this story? Click Here to purchase a link that allows anyone to read it on any device whether or not they are a subscriber.