Developers of bank building seek $39M in state help

111 Westminster St., Providence

The owner of the vacant bank building at 111 Westminster St. said Tuesday its plan to redevelop it for residential use would require $39 million in state support, an amount immediately dismissed by the top House legislator as too much.

The proposal by High Rock Development envisions transforming the 26-story building -- the state's tallest and the modest Providence skyline's most distinctive -- into 278 rental apartments. It also would create 33,000 square feet of shops, restaurants and offices on the lower floors.

The developer's request for a major public investment by the state, plus the city and the federal government, comes at a time when the state is still reeling from its failed $75 million loan guarantee to former Boston Red Sox pitcher Curt Schilling's video game company. Schilling's company, 38 Studios, collapsed into bankruptcy last year, and the state is on the hook for about $100 million related to the deal.

The $39 million in support that Newton, Mass.-based High Rock Development is seeking from Rhode Island likely would include historic tax credits in a program the General Assembly is considering reviving but could come in other forms, spokesman Bill Fischer said.

The plan also calls for a 17-year tax stabilization agreement with the city worth $10 million to $15 million and federal historic tax credits worth $21 million. High Rock would invest $55 million in cash equity and debt.

The Art Deco landmark lost its sole tenant in mid-April when Bank of America closed its branch on the first floor.

House Speaker Gordon Fox, D-Providence, said in a statement Tuesday that Rhode Island is "in no position" to provide that much financial support. He said he supports bringing back the historic tax credit program with a $5 million per-project cap and said High Rock could apply for that amount if the program is revived.

Providence Mayor Angel Taveras, a Democrat, also raised questions about the plan and its cost.

"I am concerned this proposal would not be the wisest public investment, especially if there is a less costly alternative to maintaining the Superman Building as a contributor to our state's economy," he said in a statement. "More work needs to be done to explore the option of maintaining the building as office space."

An economic impact study commissioned by High Rock said the project would bring $4.6 million in tax revenue, support nearly 1,100 jobs during 30 months of construction and create 230 permanent jobs. The report, released Tuesday, said the conversion ultimately would pump $26 million into the economy each year, including from retail spending by the building's 450 residents, spending to operate the building and "ripple-effect" activity.

"Eighty-six percent of the growth in Providence has occurred in downtown living. If you add 450 residents downtown spending, dining, entertaining, you're talking about an economic input of $26 million annually to the city and to the state," Fisher said.

There is "limited potential" for office development and leaving it as vacant office space would drag down the market and result in lower property values across downtown, the study said.

"Right now, commercial office space in downtown Providence, the vacancy rate is already 19 percent. If we flood the market with another 380,000 square feet of office space -- that's just a massive amount of office space -- we're talking about taking that 19 percent vacancy number up to 25 percent," Fischer told NBC 10 News.

A city-commissioned independent study also found the building had little potential to attract large corporate tenants given its condition and infrastructure. Gov. Lincoln Chafee, an independent, had previously floated the idea of it being used for state office space.

Fischer said High Rock understands it is seeking significant public financial backing in a tough political and economic climate.

"The obligation is on us to prove the merits of our proposal, and we intend to continue down that road," he said.

He also noted: "We're the first ones to enter the fog of 38 (Studios) and so we are judged with extra scrutiny, I think, and that's good. But we want people to really look at these numbers and really understand the consequences of inaction."

Associated Press writer David Klepper contributed to this report.