More than a year after interior demolition and asbestos removal started at the Industrial Trust Co. Building in downtown Providence, the future of the high-profile project is now unclear as rising construction costs and higher interest rates have slowed progress.
Initial estimates placed the cost of transforming the 26-story office building into apartments at $223 million, but "Superman Building" owner High Rock Westminster LLC estimated in December that the cost had climbed to $270 million, according to project filings with the city.
That's why Mayor Brett P. Smiley is asking for changes to a state tax credit program that could give High Rock an additional $4 million in tax incentives.
The state has already approved about $26 million in incentives for the plan to redevelop the empty 1928 skyscraper at 111 Westminster St. into nearly 300 apartments, as well as office, retail and community space.
The majority of those incentives come from the Rebuild Rhode Island Tax Credit Program, which caps its tax credits for such projects at $15 million.
But Smiley has proposed state legislation that would separate sales and use tax rebates on construction costs from the Rebuild RI cap, which would allow High Rock to be eligible for full sales and use tax rebate benefits of an additional $4 million.
The proposal, which Smiley first unveiled on Jan. 6 as part of his 2025 legislative priorities, needs to be submitted by a state lawmaker and the mayor is still looking for a sponsor.
House Speaker K. Joseph Shekarchi says he has spoken to Smiley about the proposal but is so far noncommittal about backing the idea.
“I look forward to reviewing the details after the House Finance Committee holds a public hearing and everyone has an opportunity to provide testimony,” Shekarchi said in a statement.
Matthew Touchette, spokesperson for R.I. Commerce, says the agency is supportive of Smiley’s proposal.
“Rhode Island Commerce supports exploring potential changes to the Rebuild legislation to enhance its effectiveness, ensuring that any amendments balance economic growth with the responsible use of public resources,” Touchette said in a statement.
The "Superman Building" project is widely viewed as key to boosting the city’s economic development and adding much-needed housing, but it has been a long time in the making. The building has been vacant since Bank of America Corp. moved out in 2013.
As of now, the deal involves $26 million in state incentives and contributions, a $10 million loan from the city’s housing trust and a $5 million city grant, bridge financing from the Rhode Island Foundation as well as millions in federal tax credits. In 2022, the City Council also approved a 30-year tax stabilization agreement that was projected to save High Rock $29 million in property taxes.
After delays, the first phase of renovation started in October 2023 with a $25 million interior demolition and asbestos abatement that was expected to take six to nine months.
But inflation and high interest rates apparently fueled cost increases and hampered the work. It's unclear if construction activity continues in the building.
A fire alarm permit was issued on Dec. 16 for the remounting of existing smoke detectors in the building, and electrical permits were issued in early December for the wiring of temporary interior heaters. Also, a building permit for the renovation issued in October 2023 remains active.
William Fischer, a spokesperson for High Rock, did not respond to PBN’s repeated request for comments.
Smiley spokesperson Samara Pinto says the mayor's proposal to amend Rebuild RI is meant to offer funds to help ensure the developers can complete the project.
High Rock purchased the 428-foot-tall skyscraper – the tallest building in the state – in 2008 for $33 million. It is now assessed at just more than $14 million, according to the city’s 2024 tax records.
The project was originally expected to begin in 2022 and take 30 months to complete.
Former R.I. Housing Secretary Stefan Pryor, who stepped down in July 2024, had said the development may require federal funding through the U.S. Department of Transportation. But the R.I. Department of Housing, now led by Deborah Goddard, is not involved in the project, according to spokesperson Emily Marshall.
She says Pryor was involved in the project during his time as Commerce Secretary and was simply supporting the developer by suggesting federal funding.
“This was never a Housing Department-led project, but we remain ready to support project partners should they need our assistance moving forward,” Marshall said.
For $270 million I wonder if they could tear down the building and put up a brand new one?
The industrial Trust Tower, aka the Superman building, is among the most historically significant art deco, set back skyscrapers in the country, predating both the Chrysler Building and Empire State Building. To tear it down would be the same sort of colossal loss of historic and iconic architecture as when Penn Station in Manhattan was torn down to make way make way for the ugly Madison Square Garden. Let’s not make the same mistake that certain small minded New Yorkers made in the early 1960s
Peter – You are so right! Now is the time to save the building once and for all.
Cheers,
Ted
We are way past the time that the city should initiate eminent domain and take this from High Rock and turn it over to a real developer. High Rock is a disaster and incapable of managing a cat liter box let alone a piece of property.