PROVIDENCE – City officials on Wednesday announced Providence has made an $850,000 secured loan with Farm Fresh RI to buy land on Kinsley Avenue.
The loan was made through the Providence Business Loan Fund, or PBLF, a new version of the embattled Providence Economic Development Partnership Revolving Loan Fund.
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The loan will go toward the acquisition of 3.2 acres of land at 498 Kinsley Ave., formerly a commercial building that was destroyed by a fire in 2015.
Farm Fresh, a nonprofit that helps distribute locally grown food, plans to build a food and agriculture campus – or “hub” – to expand its operations.
“Our support for Farm Fresh RI is part of our urban food strategy where the proceeds will transform a former industrial site, now vacant, to a new vibrant space bringing together food and community,” Mayor Jorge O. Elorza said in a statement.
The first-term mayor says the food and agriculture mission of Farm Fresh aligns with his urban food economic development strategy, which Farm Fresh codirector Sheri Griffin lauded in a statement.
“Early on support of this magnitude from the city of Providence represents a strong endorsement of the Farm Fresh RI Hub and its ability to strengthen our local and regional food system,” Griffin said.
The $850,000 loan marks the largest the city has made since Elorza decided to revamp the program formerly known as the Providence Economic Development Partnership.
The loan program, designed for borrowers who have been turned down by at least one traditional lending institution, was suspended by the U.S. Department of Housing and Urban Development in 2012 for loose underwriting and improper spending by administrators. At the time, HUD reported the PEDP had a default rate of 60 percent, and the city subsequently wrote off at least $1.5 million in loans.
The program restarted in 2013, but lending activity was minimal. Elorza in 2015 decided to give the economic development tool another try and divided the PEDP into the Providence Business Loan Fund and a separate committee to advise him on economic development-related issues.
The city has since made about five smaller loans to Providence businesses. The fund, comprising federal money, has a current portfolio totaling about $10 million, according to PBLF Director Thomas W. Hoagland.
Farm Fresh plans to build a new structure in place of the destroyed industrial building. Before burning down, the facilities were being considered by Isle Brewers Guild LLC. The brewing co-op eventually found a new home in Pawtucket and opened earlier this year.
Mark Huang, Providence economic development director, says the loan made with Farm Fresh exemplifies how the city can take advantage of targeted economic opportunities.
“The PBLF loan to Farm Fresh is an example of the city seizing an opportunity to strategicially create employment for residents, provide healthier food for communities, stimulate the local economy and reduce its environmental footprint,” Huang said in a statement.
The loan is a 10-year note, although Farm Fresh must pay back half the amount in five years, according to Hoagland.
Eli Sherman is a PBN staff writer. Email him at Sherman@PBN.com, or follow him on Twitter @Eli_Sherman.
