The project that served as a model for updates to a R.I. Economic Development Corporation program that expedites “priority” development has been appealed on procedural grounds, but state and town leaders say that the stop-work order issued last month at FM Global’s new Johnston headquarters doesn’t reflect poorly on the Certificate of Critical Economic Concern (CCEC) program.
The $60 million headquarters announced in December didn’t receive CCEC status because the program wasn’t formally approved until last week by the RIEDC’s board of directors. But FM Global’s project was the first in years that’s benefited from expedited state permitting, said Saul Kaplan, RIEDC executive director. When FM Global announced during July of last year that it intended to leave its current headquarters, Kaplan met within 48 hours with Gov. Donald L. Carcieri and heads of the R.I. Department of Environmental Management and R.I. Department of Transportation to put together a plan to speed up state permitting that helped the company decide to stay in Rhode Island.
But, as of last week, building permits and new construction on the Central Avenue site had been halted by a stop-work order from the town. That order was the result of appeals by lawyers representing FM Global’s current landlord, Capital Lease Funding Inc. A May 14 zoning board of appeals hearing has been scheduled.
The New York-based real estate manager in April 2007 purchased FM Global’s current headquarters – on Atwood Avenue – and is appealing the Johnston Planning Board’s decision to expedite the FM Global building, saying that they didn’t have enough time to review and comment on the plans, said Edward Pare, an attorney with Providence’s Brown Rudnick who is representing Prefco II LP, a subsidiary of Capital Lease.
Pare said Capital Lease was initially denied access to the master and preliminary plans for the project in January when they were filed with the town. “I think we had one business day to review some of those materials,” he said, but requests for public hearing continuances were denied by the town. Engineers hired by Capital Lease are now reviewing the plans, Pare said, adding that they might find flooding or traffic problems that would arise from the new construction.
On May 1, Capital Lease’s attorneys filed a motion in Providence County Superior Court saying the town illegally issued building permits … before … final decisions were issued on the master and preliminary plans, Pare said.
Mayor Joseph Polisena told Providence Business News last week that all due diligence was undertaken by the town. Kaplan said the CCEC program doesn’t put in place procedures for municipal expedition, adding that “prioritization does not mean that we don’t have to follow rules at the state and municipal level.”
After work stopped at FM Global, Polisena said Capital Lease’s appeal doesn’t reflect negatively on the CCEC program. Instead, he called the complaint a case of “sour grapes.”
“It’s just unfortunate that this outside, New York company would cry foul now because FM Global wouldn’t stay in their building,” he said.
Going forward, Kaplan said RIEDC and state officials have high hopes for the CCEC program, which is aligned with the state’s economic development strategy of “creating more high-wage job opportunities and the development space necessary to house them,” Kaplan said.
The CCEC allows for expedited state permitting for developments that are more than 50,000 square feet, with 50-percent new office space, or developments that will create at least 100 new full-time jobs with average wages at or above 105 percent of the state average. Companies seeking CCEC permitting go through an application process with the RIEDC, which then notifies state agencies. •
