PROVIDENCE – The R.I. Commerce Corp. board of directors on Monday unanimously approved $3.2 million in tax incentives to Westminster Partners LLC, the owner of the vacant former Providence Journal building and the adjacent Kresge building on Westminster Street they hope to develop into the “Hive Life” apartments, retail and co-working space.
The former Providence Journal building at 203 Westminster St. and the neighboring former Kresge department store building were built in 1906 and 1920, respectively. The redevelopment is expected to include 124 fully furnished, market rate apartments, 29,000 square feet of retail space, a pizza restaurant, 13,066-square-foot basement “Barcade” lounge and a 4,622-square-foot “Skybox” rooftop bar. There will also be a fitness center and 10 dedicated on-site parking spaces, according to planning documents submitted to the city.
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The corporation’s Investment Committee back in February had voted to support a $1.5 million Tax Increment Financing plan, whereby state capital is provided for initial development and recouped through a portion of future sales tax revenues.
An eligible project must demonstrate the need through a “financing gap,” according to the TIF legislation approved by the General Assembly in 2015. Proposals cannot exceed 30% of total project costs or 75% of incremental revenue generated.
The Hive Life project is the ninth such development approved for TIF plans to date, according to the Commerce website. Other notable projects include the $24.5 million Exchange Street Hotel and the $19.35 million Beatrice Hotel.
The amount approved Monday more than doubles the original request by Westminster Partners, a subsidiary of Abdo Development, based in Washington, D.C.
Asked why the tax benefit had increased since February, Commerce spokesperson Matthew Touchette pointed out that the $3.2 million is still far less than the initial $6 million TIF request that was approved by Commerce in 2019 for a 91-room boutique hotel, loft apartments and retail space. That plan, which was abandoned by Abdo for what they said were unfriendly market conditions, had an estimated project costs of $39 million.
“It is down from [the] original ask when the project was a hotel,” said Touchette.
An economic impact report on the current proposal was not immediately available.
A separate 20-year tax-stabilization agreement with the city received approval from the Providence City Council back in November. That deal is projected to save the developer $4.2 million.
Abdo purchased the buildings in 2018 for $4.3 million. The vacant buildings are now assessed at $3.9 million and generate $139,700 in property taxes annually, according to city records. A fiscal analysis conducted by the city says the site’s value will jump to $20.9 million by 2041, increasing annual tax revenue that year to $739,100.
Abdo Development to date has completed more than 30 development projects, totaling $1 billion and approximately 2 million square feet, according to its website.
Christopher Allen is a PBN staff writer. You may contact him at Allen@PBN.com
