The bid on the part of General Assembly leaders to purchase the former American Express building next to the Providence train station represents another embarrassing chapter in Rhode Island politics.
On Sept. 16, House Speaker William J. Murphy and Senate President Joseph A. Montalbano, on behalf of the General Assembly’s Joint Committee on Legislative Services, bid a reported $20.9 million for the vacant building in a Boston bankruptcy court.
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Fortunately, for Rhode Island taxpayers, the Rhode Island pension fund, which holds the mortgage on the property, dismissed the bid and is now seeking the bankruptcy court’s permission to take over ownership of the property and sell it on its own.
The pension fund gave several reasons for rejecting the General Assembly’s bid. Among them, the fact that the full General Assembly would have to approve it, as would the governor, the Rhode Island Economic Development Corporation and the State Properties Committee.
The legislative leaders saw the building as not only an opportunity to consolidate some state offices, but also as a way to provide offices for part-time legislators.
But here’s a better idea. Why not sell this Class A office building and its 113,609 square feet of space to a private entity that will fill it with workers from a company that isn’t even here yet? Why doesn’t the state recruit a company to this location, perhaps a company feeling the weight of Boston’s commercial real estate prices?
Didn’t we just lose Spherics, a biotech company born out of Brown University, to the Bay State? So we owe them one. At one time the building made sense to American Express and then to Boston Financial Data Services. Why not recruit another financial services company?
By all reports, officials from the pension fund are anxious to sell to the highest bidder. It is unfortunate the property has yet to reach its potential. But maybe now, with a GTECH headquarters next door, hotel and condo projects under way and Providence Place a shining success, the market will bear better results.
Office space in the capital city, after all, is at a premium. A Hayes & Sherry Office Market Survey released this past summer found that total square footage of office space in the city has fallen from 7.1 million to 6.4 million over the past year. And Class A office space is especially hard to come by.
The embarrassing part of this whole episode is that legislative leaders thought it made sense to do an end-run and bid on this building without going through proper channels.
Why the covert operations?
The American Express building should attract a high-profile tenant that will add to the development of Capital Center.
