PROVIDENCE, R.I. (WPRI) – The board for the Providence Economic Development Partnership voted Wednesday to write off more than $200,000 from a loan it approved in 2009 in order to clear the path to begin construction of a proposed $206-million nursing school inside the former South Street Power Station.
In exchange, the PEDP will receive $100,000 from the Providence Redevelopment Agency (PRA) and CV South Street Landing LLC, the developer of the nursing school, as a partial repayment of a $313,000 loan awarded to the Heritage Harbor Museum Corporation.
That loan was awarded to help Heritage Harbor secure millions of dollars in historic tax credits to build a museum, but the project never came to fruition.
During a presentation to the PEDP board, PRA executive director Don Gralnek called the $100,000 payoff “one of the last steps to commence construction of the project.” The PEDP will receive the payment as long as the nursing school is built, he said. If the project does not move forward, the agency would hold a lien on the property.
“PEDP has no downside in approving this,” Gralnek told the board. Gralnek made it clear that Heritage Harbor did not intend to pay off the loan itself.
The $206-million project, unveiled last year by developer Dick Galvin of CV Properties LLC, would redevelop the former power plant along the Providence River and adjoining property into academic space for the state; office space for Brown; student apartments; and a parking garage.
If all goes as planned, the University of Rhode Island and Rhode Island College would share approximately half of the 265,000-square foot building for their nursing programs, while the other half would be dedicated to Brown administrative offices. State leaders have hailed the project as central to their efforts to jumpstart the local economy.
Officials broke ground on the project in December, with a goal of opening the new building in time for the fall 2016 semester.
The PEDP’s vote Wednesday relinquishes the city from a lien it had over the property stemming from the unpaid $313,000 loan given to Heritage Harbor. Last April, the president of the museum corporation told Target 12 that his organization had reached an agreement with the nursing school developer to receive $4.5 million for about $2.3 million in Rhode Island historic tax credits and the control of an easement on the property.
“We weren’t going to let $213,000 stand in the way of this project,” Brett Smiley, the chairman of the PEDP board, told Target 12. Smiley’s husband, James DeRentis, is chairman of the PRA, which is making part of the $100,000 payment to the PEDP.
The South Street Power Station was in use from 1912 until it was decommissioned in the early 1990s. A $150-million plan to turn it into a hotel and museum was abandoned in 2008 after the Great Recession struck.
Ted Nesi and Walt Buteau contributed to this report.