PROVIDENCE – The Procaccianti Group is requesting more time to complete its development of a nine-story, extended-stay hotel in downtown Providence, under a revised agreement expected to be introduced to the City Council Thursday.
The request for a revision to its existing tax stabilization agreement would give the hotel management and development group a total of four years, as opposed to three years, to achieve substantial completion on the hotel project.
The TSA took effect in December 2015, when the company first received approval from the City Council to move forward on the hotel project, which would include 168 guest rooms and 5,400-square-feet of retail space at street level. On completion, it will be run as a Marriott Residence Inn.
Construction activities to date have included the demolition of the former John E. Fogarty Memorial Building, which began in March and was completed over the summer. Much of the debris has been removed from the site. Initially, the demolition activities took place during the work-week, which later was switched to weekends-only to reduce impact on neighboring businesses.
The TSA itself provides the company with a 12-year phase-in of city property tax on improvements to the site, including the first three years with no taxation.
The project this year received state approval for $7.5 million in financial incentives intended to reduce a financing gap, including a 20-year waiver of state sales and hotel room taxes.
In May, the company said it needed state financing to help cover construction cost increases.
In an emailed message, a spokesman for the Procaccianti Group said the city TSA ordinance provides only one opportunity for the hotel company to receive an extension of its timeline by one year. The definition in the current ordinance would mean the project was late, even if the project was late by a single day over three years, said Ralph V. Izzi Jr., vice president for corporate marketing and public affairs for the Procaccianti Group.
Under the city agreement, the tax incentives would be voided if the project is delayed.
When asked why the project has not moved forward from demolition to construction, Izzi said much work is taking place behind the scenes.
“We share everyone’s excitement and eagerness to get the vertical construction underway and see cranes in the sky. It is important to temper eagerness with the realization that this is a very complex project in the heart of one of the busiest areas of Downtown Providence,” Izzi wrote.
“Although there may be few ‘visual indicators’ at the moment as to the progress of the development, we have been extremely busy behind the scenes finalizing budgets, contractor bids, traffic control and myriad of details that must be addressed prior to commencing the new build.”
For example, he said, on Tuesday the group received approval from the city’s Downtown Design Review Committee for a slight design modification to the cornice line of the hotel.
“Generally we are on track with the development timeframe,” Izzi said. “Once we commence new construction activity on the site, which should be in the very near future, we will begin to refine a detailed construction timeline.”
Mary MacDonald is a staff writer for the PBN. Contact her at macdonald@pbn.com.
The scope of the project hasn’t changed. I don’t see any unforeseen circumstances that is causing this delay so why should the taxpayers be on the hook for this? I’m all for TSAs but I am tired of the same few RI developers who seem to game the system, I wouldn’t be surprised if suddenly we hear the project isn’t viable anymore and a parking lot is put in it’s place to await development in some unnamed future.