The Industrial Trust Co. Building holds a towering place in Neil D. Steinberg’s memory.
He started his banking career there nearly half a century ago, a junior executive helping customers open checking and savings accounts, and he eventually rose to the top as CEO of Fleet National Bank, which had its headquarters in the 26-story skyscraper that’s stood since 1928 at the heart of Providence’s financial district.
“I remember back many years when it was bustling,” Steinberg said of what many locally know as the “Superman” building due to its resemblance to the Daily Planet Building from the “Adventures of Superman” TV series.
“The bank had five or six floors when I started there. There were attorneys, accountants and dentists. Most of the major accounting firms had their offices there.” The art deco tower at 111 Westminster St., where resplendent images of Greek gods adorn the ceiling of the cavernous lobby, was especially lively around the holidays.
“On the mezzanine level, someone would play holiday music on an organ. It was a great place and a very active place,” said Steinberg, now CEO and president of the nonprofit Rhode Island Foundation.
For the last nine years, however, the building has been vacant, a growing symbol of the downtown’s past and, amid a lengthy pandemic, uncertain future. But on April 12 city and state leaders unveiled a redevelopment plan they hope will not only revive Superman but offer a glimpse of a once-again bustling, post-COVID future for the downtown.
Building owners and state and city leaders have reached a tentative agreement on how to finance a massive overhaul of the property. The plan would convert offices on the upper floors into 285 apartments while using the remaining 34,000 square feet for offices, retail, commercial and event space.
The transformation could cost as much as $220 million but will be bolstered by $41 million worth of tax credits, grants and loans from the city and the state, and another $24 million in tax credits from the federal government.
Many see it as the early rumblings of a major shift in the landscape of downtown, brought to a head by a public health crisis and a severe housing shortage.
“This has been the solution for a while, but this is the first time the state has put two and two together,” said Arnold “Buff” Chace Jr., managing partner at real estate development company Cornish Associates LP, which already has converted numerous downtown properties into residences. “The need for traditional office space has been on the decline. It’s no longer [strictly] a business district. We’re really rebuilding downtown Providence in this mixed-use way.”
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BUILDING BLOCK: City and state leaders believe a plan to provide financial assistance for the residential conversion of the Industrial Trust Co. Building, second from the left, will dovetail with a planned transformation of Kennedy Plaza, the public space in front of the building. / PBN PHOTO/
PAMELA BHATIA[/caption]
‘HAD TO GIVE SOME’
The deal has been a long time in coming.
Massachusetts-based High Rock Development LLC purchased the Superman building in 2008 for $33.2 million while it was still occupied by Bank of America Corp. But when the bank packed up and left in 2013, the building’s flaws became glaring.
It was constructed when the city was still an economic powerhouse during a boom period between the world wars. But now tight office layouts on the upper floors created by the building’s stepped facade and the numerous interior columns required by its steel skeleton make the space unattractive to commercial tenants looking for open plans on fewer floors.
While High Rock principal David Sweetser insisted early on that his company needed financial assistance to remodel the building, state leaders balked, still stinging from the 38 Studios bankruptcy debacle that left taxpayers on the hook for $75 million in bond payments.
In the meantime, multiple attempts to bring in large tenants failed, including Citizens Financial Group Inc. in 2015, Paypal Holdings Inc. in 2016 and Samsonite Corp. in 2018. The property’s assessed value dropped to $14.2 million in 2021, from $31.3 million in 2009.
After several years of off-and-on negotiations, Sweetser said the “stars aligned” recently in terms of the demand for housing and financing offered by the state.
The deal was brokered after Gov. Daniel J. McKee last year floated the idea of demolishing the building and High Rock temporarily faced the prospect of a potential tax sale of the property for being delinquent on $450,000 owed to the city, which the company has since paid down.
As it stands, the state will provide $26 million in tax assistance, with the federal government chipping in a potential $24 million in tax credits. Meanwhile, the Providence Redevelopment Agency would make a $10 million, 40-year loan at 1% interest and the city would provide a $5 million grant. Additionally, High Rock will also seek a tax stabilization agreement from the city, giving the developer a discounted property tax bill for decades.
High Rock, meanwhile, will finance the rest of the project with cash, equity and debt, and has agreed to make 20% of the one- and two-bedroom apartments available at below market rates to people making less than the area median income.
“I had to give some,” Sweetser said in announcing the agreement with state and city officials. “Frankly, the state … needed to give a few points. The bottom line is I could live with what I was asked to do. Obviously, the state made the same conclusion.”
Certain aspects of the deal still need approvals from the R.I. Commerce Corp., the PRA and the City Council. And the General Assembly may need to pass legislation to allow the city to enter into a 30-year tax stabilization agreement.
Not everybody’s onboard.
Detractors say the agreement gives the wealthy property owner government assistance that essentially rewards him for sitting on the empty property for nearly a decade to the detriment of the local economy.
Critics span the political spectrum, from progressive state Sen. Samuel W. Bell, D-Providence, vowing to vote against the “corporate welfare” tax stabilization agreement authorization if it comes before the General Assembly, to the state Republican Party, which branded the deal as a “super bad bailout” for a real estate owner who made a bad investment in a “dilapidated” building.
But City Councilman John Goncalves, who represents the district that includes the building, points out that a city subsidy is still better than the alternative.
“What would you rather have, a vacant building or a building that’s going to be revitalized?” Goncalves said.
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William Fischer, spokesperson for the building owner, High Rock Development LLC, tours the vault in the Industrial Trust Co. Building.
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NEW LIFE?
Many city and downtown business leaders are giddy about the thought of 500 new downtown residents, some of whom may frequent Kennedy Plaza right outside the doors of the Superman building.
Right now, the plaza serves as a central hub for the R.I. Public Transit Authority, but it’s also become a battleground of sorts over the downtown’s future, pitting state transportation officials and the city against RIPTA riders, many of whom are low income and minorities.
The city has proposed a three-phase, $140 million plan to transform the plaza into what outgoing Mayor Jorge O. Elorza envisions as a thriving public square.
Where bus stops are located now, the conceptual design includes a larger skating rink that would double as a splash park in the summer months, as well as a café and performance area. Bus stops would be limited and moved to the edges of the plaza. The street between the plaza and Burnside Park would be closed to traffic.
The project spans not only Kennedy Plaza but also includes improved connections to Waterplace Park. Elorza, who is term-limited and will leave office in January, says the return of an active Superman building would “help accelerate” those plans.
“We could see a Kennedy Plaza where folks are coming and spending a full day there, which is very different from what it is now,” Elorza said. “It hasn’t been that kind of a draw. That’s the kind of experience we can create in Kennedy Plaza.”
Elorza said this vision of Kennedy Plaza as a destination is being pursued in tandem with an effort to relocate the bus hub from the plaza to a depot built in an empty parking lot on Dorrance Street, which could take two to three years and cost an estimated $77 million. Some public transit advocates have resisted the idea because the central location of the plaza is more convenient for bus passengers.
Beyond the plaza, Elorza sees the revitalized skyscraper feeding the food hall proposed by Christopher J. Marsella, president of the Marsella Development Corp., in a vacant section of nearby Union Station. The $23.5 million project recently received a go-ahead from the Capital Center Commission and is expected to draw 2,000 people a day once it opens in the spring of 2023.
Elorza says “it works both ways” with visitors to Kennedy Plaza activating the first-floor retail, community and event space being planned at 111 Westminster St. and elsewhere.
“The Superman building redevelopment is part of a larger plan,” Elorza said. “I can’t be more excited about what it means for Greater Kennedy Plaza. … The reality is a whole world of opportunities lies ahead of us.”
The restoration of the property couldn’t come any sooner for public safety reasons as well, to shore up the building’s crumbling, discolored facade that is now pockmarked by chunks of missing limestone. Scaffolding has been set up at the base of the building to protect passersby.
“I’ve always been concerned that if any of the concrete chipped off, fell and hit someone in the head, people could die or get injured,” said Joseph R. Paolino Jr., the former Providence mayor and managing partner of the real estate investment company Paolino Properties LP. He’s been based in the adjoining glass office building at 100 Westminster St. since 2014.
High Rock said it hopes to start the redevelopment in five to six months by first conducting interior demolition work, while also going through the permitting process for full construction.
The work will entail installing new heating and ventilation systems, replacing the building’s 1,500 windows and repairing the facade. It’s unclear how long it’ll take to get the project permitted, but the company said the full construction phase of the project will take about 2½ years to complete once it commences.
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A QUIET PLACE: The lobby of the Industrial Trust Co. Building, which also once served as a bank branch, has changed little since Bank of America Corp. moved out in 2013 leaving the skyscraper vacant. / PBN PHOTO/MICHAEL SALERNO[/caption]
‘ACTIVE STREET’
It’s clear the downtown area has been evolving for years, but the pace of change has quickened during the COVID-19 pandemic. A shift to remote work has further reduced the need for office space, making office workers scarcer on the streets in the business district and vacant storefronts much more common. Meanwhile, the demand for affordable housing has skyrocketed.
In March, Paolino sought $390,000 in tax credits from R.I. Commerce for his $17.9 million conversion of the six-story Studley Building at 86 Weybosset St. into 65 residential units. Paolino, who told Commerce officials that the building has not had office tenants since 2010, received preliminary approval.
When Paolino’s company purchased the 12-story Westminster Square Building on Dorrance Street at auction for $6.55 million earlier this year, he acknowledged that an apartment conversion was among the options he was considering. The property is in the shadow of the Superman building.
Now city and state officials believe the effort to restore the Superman building into a thriving, mixed-use residential property will become a standard-bearer for the future of downtown development.
“Single-tenant commercial buildings are increasingly being reimagined as spaces with a mix of active uses that help sustain a neighborhood,” said City Planning Director Bonnie Nickerson, who is also executive director of the Providence Redevelopment Agency. “As demand for office space shifts, and residential housing demand remains strong, we expect to see this trend continue.”
Elorza says the Superman building is special with the amount of state and city funding it may receive, but he wants to see other underutilized buildings undergo renovations that fill them with people, contributing to downtown’s economic ecosystem.
He points to the former Providence Journal Building at Westminster and Eddy streets. A $39 million plan to convert the little-used, 116-year-old building into a hotel has stalled, and Washington, D.C.-based developer Jim Abdo has hinted that it might become apartments.
“We supported converting it into a hotel, but we’re also very open to that being residential,” Elorza said. “That’s another building we have in our sights that we’d like to get redeveloped.”
Cliff Wood, executive director of The Providence Foundation, a vocal supporter of the Superman building renovation, says an influx of new residents will contribute to a safer environment, as a result of more eyes on the street looking out for each other, which will further increase the economic vitality of the area.
It’s “a boon” for “people who are buying and selling suits, sandwiches and the like,” Wood said.
Wood argues that the around-the-clock activity created by a residential development of this size trumps that of a commercial office building, which only brings people to the area during normal workday hours.
“What really creates safety is an active street,” Wood said.
Steinberg, who can still see the Superman building each day from his office on the opposite side of Kennedy Plaza, has accepted that the structure won’t be used as it was intended when constructed, solely as office space.
“The opportunity to anchor a revitalized Kennedy Plaza and downtown Providence has only grown, as has the need to jump-start this area given the COVID-19 impact,” he said. “The pandemic has shined a light on the need to help bring back the downtown economy and build the population here.”
(PBN Staff Writer Nancy Lavin contributed to this report.)
Marc Larocque is a PBN staff writer. Contact him at Larocque@PBN.com.
As much as I love the building, having spent the first 17 years of my career working there, I think we are all kidding ourselves that it is only going to take $65 million of tax payer money to bring it back to life. BTW, for that $65 million the taxpayers should get at least 30% ownership of the building.
I spent my entire 43 year career working in downtown PVD (almost 100% in the Superman and Fleet Center Buildings) and have watched the city steadily deteriorate ever since Cianci left office for the last time. I fear Elorza and Covid have driven the final nails in its coffin and I have zero confidence in the ability of any of the current PVD mayoral candidates to turn things things around.
What about the Fane Tower?
Isn’t it time to start tearing down these outdated buildings and start adding new construction to downtown? The economics on this are ridiculous.