Construction of the first new office building in downtown Providence in over a decade has been stalled, as the developer tries to nail down a lead tenant.
The law firm of Edwards & Angell, LLP, had planned last year to become the main tenant of the office/retail project called Nine Waterplace. In recent months, however, Edwards & Angell has been tight-lipped about its role in the Capital Center project.
“This is a private contractual matter and it’s not worthy of any public discussion,” said Charles F. Rogers, a partner at the firm’s Rhode Island office, when asked about the delay in the project.
At least two previous timetables for a groundbreaking in the fall and late winter have passed without a spade entering the ground.
Richard Wasserman, partner at Starwood Wasserman, the project’s developer, would not comment in detail concerning the project, only to say it is at a “fork in the road.” He did say he should know more about the direction the project will take in two weeks. If all goes well, Wasserman said construction could start within four to five months.
The exclusive broker for the proposed building, Charles T. Francis of CB Richard Ellis of Rhode Island, confirmed that securing a lead tenant has created the hold-up.
“There has been a small setback in the lead tenant…we however don’t consider it dead,” said Francis. “This is a wonderful opportunity to bring the right kind of space to Providence.”
He would not comment on whether Edwards & Angell remains the top candidate for lead tenant. Francis said the lead tenant would occupy at least one-third of the building.
The proposed nine-story building at Francis Street and Memorial Boulevard is expected to cost between $65 million and $70 million. The most recent plan for the building calls for a 500-car garage, 220,000 square feet of office space and 50,000 square feet of retail space.
The developer said late last year that Edwards & Angell will occupy approximately 90,000 square feet of the office space. Edwards & Angell is now located at One Financial Plaza, the former Hospital Trust tower.
One Financial Plaza is owned by FleetBoston Financial.
It is clear that without a lead tenant it would be difficult to get the project rolling. In today’s building climate, few investors are willing to take on a project based on anticipation of corralling tenants.
“This project needs a lead tenant in place with a signed lease before any shovel will hit the ground,” said Francis. “No building today is built strictly on speculation in a downtown market. It is essential that there be a lead tenant, which establishes credibility for the project as well as financing.”
Francis said the project has four “strong” potential tenants. He would not discuss the companies’ names, but said they were a mix of in-state and regionally based companies.
Delays in construction of a building of such magnitude are not unusual. It can take years before the right tenants and finances are in place.
Francis said that it should be a matter of months, not years.
“I would say that in six months it will begin.” Francis added that it would take from two to three years to build the structure.
In December, Starwood Wasserman was granted an extension on its “certificate of approval” for the project from the Capital Center Commission, which oversees development in Capital Center.
The certificate was to expire in December, but the extension will give Starwood Wasserman until June to get a building permit from the city. Without the building permit, Starwood Wasserman would need to file for another six-month extension.
Deborah Melino-Wender, Capital Center Commission executive director, said she had heard rumors about the project’s delays, but no official word has come from the developer.
Melino-Wender said the commission would likely be open to further extensions.
“I would anticipate that another few extensions would not be met with resistance. We have been very understanding of changes in market conditions,” she said.
She added that eventually the commission would want to know what the developer’s plans are and some of the obstacles that might be delaying the project.
“Because previous developments have gone on for ten years, we would have to reevaluate the request and see what the reasons are for any request (for extensions),” she said.
If built, Nine Waterplace would replace One Citizens Plaza as the newest office building in downtown. One Citizens, home to Citizens Bank, was completed in 1990. There have also been other buildings renovated for office use in recent years.
