Even as the House reduced Gov. Gina M. Raimondo’s request for incentives to replenish her economic programs, most notably the real estate development program Rebuild Rhode Island, it expanded the ability of The Fane Organization to access Rebuild funds for a proposed luxury skyscraper.
The budget expected to be approved by the General Assembly will allow up to $25 million in Rebuild incentives for Parcel 42, the site of the Hope Point tower. The $300 million project would rise 46 stories, becoming the city’s tallest skyscraper.
The $25 million authorized for the project is $10 million more than the existing cap for individual projects. It’s also $10 million more than was afforded the nationally known Wexford Science & Technology LLC, a tech-space creator that partners with research universities.
In simultaneous moves, the House established a cumulative cap of $210 million for all other Rebuild projects – Raimondo had requested $250 million – then retroactively placed some $41 million in previously authorized sales tax incentives under the new ceiling, effectively cutting into its capacity.
The sales tax incentive allows developers to avoid sales tax payments for furniture, equipment and construction materials.
House Speaker Nicholas A. Mattiello, D-Cranston, in a statement said the amount dedicated to the Fane project was a priority for Senate President Dominick J. Ruggerio, D-Providence. Ruggerio could not be immediately reached for comment.
When asked whether the new restrictions will impact which or how many companies Rhode Island can attract in the future, R.I. Commerce Secretary Stefan Pryor said: “We are choosing to accentuate the positive. Because there are so many positive things going on in the economy and there is so much more work to do.”
As part of the budget, he noted, the Rebuild program will be easier for small manufacturers and smaller historic-preservation projects to access.
The $25 million allowed for the Fane project, he said, was the request of the developer. And Commerce R.I. will consider that as part of a broader application for incentives.
The budget would also eliminate $1 million requested for the Interstate 195 Redevelopment District fund, an account that can be used for broad purposes, including providing gap financing for district projects.
“The availability of incentives, even if they’re not major, can mean the difference between a project going forward or not going forward,” said Bob Davis, chairman of the I-195 Redevelopment District Commission.
Brent Runyon, executive director of the Providence Preservation Society, which opposes the Hope Point tower project, felt dispirited by its inclusion in the budget.
“The city and state are willing to bend over backward to carve out new rules for [Hope Point],” he said. “This is a lesson the state should have learned with past investments.”
Mary MacDonald is a PBN staff writer. Contact her at Macdonald@PBN.com.
