Questions linger as Fane tower project inches forward

THE FANE TOWER recently received a new design, but questions surrounding its height and market availability linger. / COURTESY FANE ORGANIZATION

PROVIDENCE – Six years after it was first introduced and amid continuous opposition, the Fane tower project is still inching forward, with the latest development altering its structure and outer façade. But some are wondering whether the market for expensive downtown apartments still exists – if it ever existed – in the district.

Months since the last update, the Fane organization announced earlier this week it had submitted a new design plan for the $300 million luxury tower, proposed on former Interstate 195 land at 250 Dyer St. According to the new designs, the building will have less parking, more residential floors and more rounded corners. While the changes add one story to the building – set to become the tallest building in Providence if ever built – the height will remain the same at 550 feet.

Fane spokesperson Jim Malachowski said the developers are anticipating to present the plan at a hearing before the I-195 Commission in January. He said Fane has paid the $50,000 application fee to the commission and is hoping these plans will be final, but he is not “setting any timelines or committing to a construction date until he sees how the design review plays out.”

So a finish line remains far for the luxury tower, whose journey has been riddled with obstacles, with the project running into repeated delays and extensions of deadlines since it was first unveiled in 2016.

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The project has received mixed support over the years. Mayor Jorge O. Elorza vetoed the zoning change needed to surpass height limits to build the controversial tower in 2018, but the Providence City Council later voted to override Elorza’s veto. State officials, including Senate President Dominick J. Ruggerio and House Speaker K. Joseph Shekarchi, have expressed their support for the project.

One of the questions that have been following the tower over the years is whether the Providence real estate market has a need for luxury apartments in the district.

Benjamin Scungio, regional manager for the luxury Realtor Mott & Chace Sotheby’s International Realty, said he is confident the tower will not struggle to attract buyers, no matter the price point. He said the same discussion took place years ago with Waterplace, a two-building high-rise complex built in 2008.: “Everybody said the design was terrible and now it’s completely filled and there’s a 20% to 30% turnover every year, so there’s plenty of people who want to live there.”

“I think there’s always going to be objections to certain aesthetics and designs but I think if it’s built and has the right amenities and it’s nice and modern, I think people will warm up to it over time,” Scungio said.

Brett Pelletier, chief operating officer for Boston-based Kirk & Co., said the Providence market is looking better than it has in the past few years, with lots of capital and activity coming in, but the Fane tower remains a very expensive and ambitious project.

“The neighborhood seems to be growing up,” Pelletier said. “Every time you drive to Providence everything is changing and evolving.”

Many of the changes have happened in the same district the tower is set to be built, with several projects reshaping the district. But the housing market remains promising and in need of new activity, Scungio said.

“Any type of downtown living is needed in the city,” Scungio said. “Especially in that location, it’s going to be beneficial for the city no matter the aesthetics.”

With the tower still likely years from being complete, the fast-paced real estate market is likely to transform again. Pelletier and Scungio said this could help Fane.

“Every five to seven years there’s a cycle. We’ve gone beyond that five-to-seven-year period currently, which is why a lot of people are predicting real estate to normalize,” Scungio said. “But I think it could work out really well for [Fane]. I think demand will be there in the next two or three years.”

And while luxury apartments remain a “tough sell,” Pelletier said the hope is that by the time the tower is complete, things will be different. And when the project is finally completed, it will be a “shock” to the supply market.

“It certainly is a long-term strategy,” Pelletier said. “When they do deliver it’s going to be more units coming on the market, adding to the supply more than any other project has.”

Neil Amper, vice president of Capstone Properties in Providence, said the Providence downtown market is likely to attract residents from Boston and other neighboring cities looking for cheaper prices.

“The supply has gone up and there hasn’t been a lot of new population in the state,” Amper said. “But there are enough amenities to make it attractive to a wide variety of people.”

Beyond the demand for the downtown apartments, much of the opposition continues to surround the building’s height.

For Brent Runyon, executive director of the Providence Preservation Society, the design changes make no difference to the organization’s stance. The Providence Preservation Society continues to oppose the development based on its height and continues to question both the “financial and market feasibility” of the project and its environmental impact on the bank of the Providence River.

“The tower was approved at a time when there wasn’t much going on in the district,” Runyon said. “The unfortunate thing is that something that fit within the allowable zoning would have been built on that spot by now as well as on the adjacent site they have an option to buy.”

The latest design changes do not make the project any more appealing, said Runyon.

“Even with a reduced parking podium, this isn’t a good fit for a riverfront, parkfront location,” he said. “The parking podium is too large even with the reduction in size.”

Over the years, the tower has faced legal obstacles related to its height. New York developer Jason Fane and the city’s I-195 Redevelopment Commission had requested an amendment to the property’s zoning to allow a 600-feet maximum building height, exceeding the parcel’s current zoning regulations that cap building height at 100 feet.

The proposal was approved by the city and Superior Court, but Peter Scotti & Associates, Inc. and Building Bridges Providence challenged the court’s decision process and filed a lawsuit against the zoning change, calling it inconsistent with goals outlined in the city’s “Providence Tomorrow” comprehensive plan. Scotti and Building Bridges said the building should adhere to the original 100-feet maximum height allowance, but the R.I. Supreme Court eventually ruled in favor of the Fane tower project in late June.

Sharon Steele, president of Building Bridges Providence, declined to comment at this time.

Joseph Paolino Jr., former Providence mayor and managing partner of Paolino Properties, a real estate management and investment firm with several major downtown commercial properties in its portfolio, said the marketplace will dictate whether the building will become a reality or remain a project.

“If the marketplace isn’t there, he’s not going to be able to do it,” Paolino said. “If he can get the financing, he can prove there’s a market for this.”

In the meantime, Fane will have to face other changing variables, including high interest rates, high cost of material and increasing inflation.

“I think that they have a tough job ahead of them,” Paolino said. “I don’t know if it will get built or not. But I’m not one to be critical of it.”

“We live in a diverse city, we have diverse architecture,” Paolino added. “And I believe that this is something that will be part of the skyline of Providence and I think it’s fine. We need to help the developer.”

Claudia Chiappa is a PBN staff writer. You may contact her at Chiappa@PBN.com

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