Brown University last week shook up the Jewelry District with news that it will buy seven buildings in the district from Belvoir Properties, along with parking lots and a 400-car garage, in what the school said is one of the largest acquisitions in its history.
Brown officials declined to say how much they intend to pay for the properties, saying they had agreed with Belvoir to wait until after the closing, which is slated for early next year. Belvoir did not return repeated calls for comment.
But the buildings, which include the landmark One Davol Square, small and large office buildings, and the home of the R.I. Department of Business Regulation, are assessed by the city at a combined $26.4 million – $10.2 million of it for 222 Richmond St. alone.
And if Belvoir’s sale last year of 300 Richmond St. to Women & Infants Hospital is any indication of actual market values in the area, the sale price could far exceed the assessments; 300 Richmond St. was assessed at $2.37 million, but sold for $5 million, city records show.
Brown already has a substantial presence in the Jewelry District, most notably with its molecular medicine labs at 70 Ship St. (also bought from Belvoir), as well as the Coro Center – a collaboration with Lifespan, The Education Alliance offices at 222 Richmond St., an information services office at 3 Davol Square, and development offices on Elm Street.
In an interview, Richard R. Spies, executive vice president for planning at Brown, said the university has no specific plans yet for the buildings, which have a combined 232,000 square feet of rentable space, and are now occupied by business, nonprofit and government tenants.
Brown President Ruth J. Simmons’ ambitious Plan for Academic Enrichment, which calls for an expansion of the university’s instructional and research capabilities, requires additional space, Spies said, so Brown had been on the lookout for possible acquisitions.
Last year, Brown bought Old Stone Square, at 121 South Main St., for $31.5 million, saying it would occupy part of the space shortly, but it would allow most tenants – such as the law firm Brown Rudnick Berlack Israels LLP and Hemenway’s Seafood Grille & Oyster Bar – to remain.
Spies said that property is working out “very well,” and Brown has been moving part of its public policy program into the building since early fall. “As far as I know,” he said, “the other occupants of the buildings have not been disrupted. I think we’re feeling very good about it.”
Like South Main Street, the city’s Jewelry District fits well with the university’s needs, Spies said, so when Belvoir made the seven properties available as a package, Brown was interested.
“We think they provide us a critical mass of facilities,” Spies said of the properties. “They connect very well to the Ship Street facility. They’re in a good location, both within the Jewelry District and in terms of their overall relationship to the campus over here, to the hospital campus and to the city.”
Belvoir’s CEO is James R. Winoker, who was a Brown trustee from 1985 to 1991 and also a pioneer in redeveloping the Jewelry District.
For now, Spies said, Brown expects most of the space to continue to be leased to the existing tenants. And even if Brown were to occupy the majority of the space at some point, he said, it would still want to have retail shops and eateries around, so some tenants would always be welcome.
Any space devoted to institutional use by Brown eventually would become tax-exempt, but under a 2003 deal with the city, the tax payments would be phased out over 15 years, Spies noted. At the current commercial tax rate, $37.72 per $1,000 assessed value, the annual levy on those buildings is just under $1 million.
But Mayor David N. Cicilline – a Brown graduate but also the man who pushed for the 2003 deal, concerned about the large share of tax-exempt property in the city – said that right now, the properties are not zoned for institutional use, so Brown would have to seek zoning changes.
Asked how he felt about the Belvoir deal, Cicilline replied, “there’s no question that Brown will continue to grow, and that’s important to the future of the city and to their future growth as a world-class university, but it’s important that they do it in the right places.”
Colleges in other cities have used their “enormous economic power” to transform blighted neighborhoods, he said, and Providence would benefit much more if Brown acquired properties in underdeveloped areas, rather than buying occupied commercial buildings.
Michael E. Hogue, a Jewelry District resident and businessman who is president of the Jewelry District Association, said he doesn’t expect the property sale to have a negative impact on the area at all, even in terms of tax revenue for the city.
“I think it’s all positive,” he said. “I think the Jewelry District is getting close to a tipping point, such as Wayland Square was four or five years ago, and I think Brown is going to accelerate that tipping point, because they’re good neighbors, good landlords.”
Brown also brings the kind of activity to the district “that we like,” he said: “working with your mind, intellectual property.”
Furthermore, if Brown does start converting the buildings to institutional use – and Spies said that would be likely to happen at some point, and would bring students into the area – Hogue said that would bring a “young, vibrant life” to the area.
Karl Sherry, a partner at Hayes & Sherry, the state’s largest independent commercial real estate brokerage, offered the same assessment when asked how the Brown purchase would affect property values in the area.
“I think it’s just going to add more activity to the Jewelry District,” he said. “To have their presence there is just nothing but a positive thing. … There will be numbers now in the Jewelry District – and I think it’s going to change dramatically, and for the better.”
