The Rhode Island Board of Education on Monday endorsed legislation outlining the terms of a lease for a nursing education facility that is the centerpiece of a major proposed redevelopment project on the edge of downtown Providence.
The board unanimously endorsed draft legislation that outlines the lease terms for a shared University of Rhode Island-Rhode Island College nursing center in the vacant South Street Power Station.
The endorsement is an early victory for the project, which needs additional approval.
The legislation authorizes a 15-year lease with an annual cost of $6 million for the first five years. The base rent would go up 8 percent in the sixth and 11th years of the lease and again, by 5 percent, if the state chooses to exercise the option for a two-year extension.
Under the development proposal, about half the space in the old power station would be used by the public schools' nursing programs, beginning in 2016. The rest would be occupied by Brown University administrative offices.
The three higher education institutions are hoping to partner with a private developer, CV Properties, on the $206 million project, which was announced last June. The proposal also calls for a 220-bed student housing development, restaurant and retail space and a 650-spot parking garage.
CV Properties President Richard Galvin said last year the project would be financed by about $28 million in previously approved state tax credits, $26 million in federal historic tax credits, $137 million in private equity and debt and city money for the parking structure.
Gov. Lincoln Chafee said Monday that "meds and eds" developments in other cities have helped turn around troubled economies, and that Rhode Island should position itself on the "positive wave of health care and education."
"These are growth areas," Chafee said.
At a briefing on the legislation earlier in the day, state Director of Administration Richard Licht said the state plans to invest about $1 million up front for preliminary professional services, including architects and lawyers, but that the risk associated with the project would be borne by the developer.
"We do not pay one dime to the developer until we get the keys to the place," Licht said.
The project also needs the go-ahead of the State Properties Commission and the General Assembly. Both the House and the Senate approved resolutions endorsing the proposed development last year.