PROVIDENCE, R.I. (WPRI) – Gov. Gina Raimondo took a victory lap Tuesday after her administration inked a deal to have a nationally known real-estate developer build a new innovation complex on the old 195 highway land.
“This is the first major project. It’s a transformative project,” Raimondo said during a news conference at Brown University’s Institute for Computational & Experimental Research in Mathematics, which has breathtaking views of Providence’s city skyline. She described the project as “a game-changer.”
Under a deal finalized Monday night, the state is slated to provide more than $32 million in taxpayer subsides to Wexford Science & Technology and its local partner, CV Properties, to build a nearly 300,000-square-foot innovation complex and hotel. The anchor tenants will be Brown’s School of Professional Studies and the Cambridge Innovation Center, a company that leases space to startups.
Raimondo noted that Rhode Island leaders have been talking for years about the economic potential of the prime land freed up when I-195 was relocated, and said taxpayers will finally see significant construction on the land “in just a few short months.” She argued the Wexford project will be a catalyst for more companies to set up shop in the area.
“That’s going to begin the snowball,” she said, emphasizing that the Wexford project will also create jobs for people without college degrees.
“We’re changing the narrative here in Providence and here in Rhode Island,” added Providence Mayor Jorge Elorza, saying he saw “no reason why Providence cannot be one of the premier cities in the entire United States of America.”
Wexford renderings (Dec. 2016)
Wexford renderings (Dec. 2016) x
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Executives from Wexford and Cambridge Innovation highlighted their experience building innovation districts in other cities such as St. Louis and Winston-Salem, and said they were drawn to Rhode Island by what they saw as the untapped potential of its college research base and the active solicitation of the governor.
Wexford President and CEO James Berens said the project will create “a dynamic mixed-use site that brings together intellectual capital, innovation and infrastructure to create a center of gravity and congregation that can give a sense of place to the growing innovation and entrepreneurial activities taking place in Providence and across Rhode Island.”
Alan Fein, Cambridge Innovation’s chief operating officer, also suggested the state’s proximity to Boston will help the company make an impact. “As a result of the fact we’re so close to Providence, Providence is going to get our A team,” he said.
William Hatfield, Bank of America’s Rhode Island president and chairman of the Greater Providence Chamber of Commerce, applauded the news Tuesday.
“Today’s announcements are unprecedented in scope, vision, and impact,” Hatfield said in a statement. “The combination of Wexford Science and Technology, CIC and Brown University and their combined investment of $160 million marks a generational shift in the innovation landscape in Rhode Island.”
The Wexford project has been pitched as eventually encompassing more than 1 million square feet of space, but the first phase announced Monday is considerably smaller than the nearly 500,000 square feet originally envisioned.
Thomas Osha, a Wexford senior vice president, said future phases of the project will be “success-based” and depend on whether the first phase works out, particularly demand for the roughly 66,000 square feet of Class A office space that the new innovation building will include. He said Wexford’s Winston-Salem complex grew to about 1.2 million square feet over around seven years.
“I still want a million square feet,” Raimondo said, to laughter.
Osha also indicated future phases of the Wexford project may not cost Rhode Island taxpayers as much as this one. “We tend to see, as these grow, the amount of public subsidy reduces,” he said.
Raimondo noted that the South Street Landing project, which is turning an old power plant in Providence into a complex anchored by a new state nursing school, has received more than $60 million in taxpayer subsidies despite having no commercial tenants or significant new jobs attached.
“No one is more focused on being a steward of taxpayer dollars than I am,” Raimondo said, adding that state leaders were “tough negotiators” but that “the first few deals are challenging.”
One aspect of the state’s deal with Wexford includes providing the land for the project, valued at about $4.5 million, for free in exchange for a share of any future profits. That has raised questions because the law governing the 195 land says it must be sold at fair market value, but Pryor said Commerce lawyers think the move is permissible.
“The 195 Commission will be contributing the land at its fair market value,” Pryor said. “The value of the land, approximately $4.5 million, will be included in the calculations necessary to fulfill the project budget. So it is attributing the fair market value to the land, and in that sense is fulfilling the requirements of the statute.”