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PBN: Why is it so hard to build in Providence?

waterplace-cranes-2006

Cranes constructing the Waterplace Towers in 2006.

Development is not predictable, to the point of being difficult. Companies that have built projects in the city, or who want to, describe a market beset by financial obstacles, administrative hurdles and, as a result, a yearslong paucity of new construction – even as cranes have seemingly dominated the skyline in Boston.

Despite the poor general economy and loss of jobs, however, Providence has construction costs that remain as high as in Boston, according to development professionals. But the rents that can be collected from buildings in Providence, whether from business tenants or apartment residents, don’t approach those of Boston.

And the property taxes are higher here – particularly for residential buildings. In Boston, an apartment building falls under the residential tax rate, currently $12.11 for each $1,000 of assessed value. In Providence, the same building pays the commercial rate of $36.75.

All of this amounts to what developers call a “feasibility gap” for Providence, the void between rents and costs of construction.


What do you think needs to be done (if anything) to jump start development in Providence?

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13 Responses to PBN: Why is it so hard to build in Providence?

  1. James March 16, 2015 at 11:19 am #

    We should fix a tax code that makes owning a surface lot more profitable than owning a building.

    http://www.ecori.org/green-opinions/2015/3/12/providence-should-be-about-people-not-parking

  2. Observer March 17, 2015 at 8:44 am #

    It’s about time the City leadership focused upon the point made by James above and quickly.

  3. Peter Brassard March 17, 2015 at 9:28 am #

    I’m not sure that it’s just the tax code or surface parking.

    New Haven and Stamford, which are more comparable in size to Providence than Boston or New York are experiencing construction activity that Providence is not. Because Stamford is closer to New York its rents are higher, but New Haven is more similar to Providence. Construction costs are roughly the same as Boston and New York in the smaller cities along the northeast corridor, so Providence is not alone with that.

    The lack of cranes may have more to do with regulations and the political structure in Providence. In Stamford minor zoning changes don’t require the approval of the City Council. The Zoning Board make those decisions. There is indeed much public comment and the process is not that fast, but the board members are not pressured by NIMBYs or the next election cycle. Also, Stamford is aggressive at courting developers to build in the city.

    The 210 West Exchange Street project is a prime example of what’s wrong with Providence. If not cranes in the sky the 210 West Exchange group should have already been pouring their foundation. Will that project ever get built?

  4. James March 17, 2015 at 1:05 pm #

    I definitely agree with Peter. There are all sorts of things in the way of Providence development besides the parking issue, but I think that fixing the parking problems would be one of the easier fixes, and the ways we’ve been going about “fixing” the problem have seemed wrong to me so far. We keep misdiagnosing the problem as “not enough parking” instead of “too much parking”.

  5. Aaron March 17, 2015 at 3:19 pm #

    This all makes me so very sad and discouraged. I honestly believe that Providence could be a major destination, similar perhaps to a smaller Portland, OR, and yet instead we have acres upon acres of barren land and surface lots.

  6. Jason March 17, 2015 at 7:02 pm #

    Complex permitting, licensing, inspection, and jurisdiction sure as hell doesn’t help. It seems to me like it’s virtually impossible when opening a business or starting construction to figure out what you need and when you actually have the “Yes” to move forward.

  7. mothra March 17, 2015 at 8:32 pm #

    It doesn’t help that PVD has an inferiority complex and too often allows the lowest possible use for projects that in other cities would be models of form AND function. Developers are NEVER held accountable, and they know that they can get what they want simply by waiting it out.

    And I do think that the temporary parking lot is a real problem.

  8. KCB March 18, 2015 at 9:38 am #

    I can speak from experience when I say that the Doorley building is a complete clusterf**k. Providence building inspectors and fire make it so difficult to develop projects in the city. They pick their pet projects and they hold up the projects of people that don’t have friends in high places. No wonder why people don’t want to even play the game.

  9. Mark Moreno March 18, 2015 at 5:38 pm #

    Wanting more development is fine but a city should be people-centric as well. I’m grateful that Providence already has a people-centric foundation but the city hasn’t capitalized on it enough. How hard is it to add at least a neckdown or a bike lane.

  10. Mark Moreno March 18, 2015 at 5:43 pm #

    Who knows, making Providence a people-centric city could make development boom.

  11. Aaron March 19, 2015 at 3:10 pm #

    I think it could lead to a boom insofar as it would get more people outside, on the streets, looking for places to spend their time and money. We’ve already got the population down there to support this!

  12. Jon April 5, 2015 at 12:45 pm #

    I also think it’s just where the (inter) national economy has moved, we were a center of regional banking and had the buildings to prove it – as they consolidate and grow Boston and Stamford (and Charlotte, Edinborough, Madrid) get new buildings and ours empty out (or get converted), and there is a surfeit of square footage-so from the private sector through the public there is little urgency to build anything.

  13. Steve November 24, 2015 at 9:11 pm #

    The City Council and Mayor need to be confronted with the fact that there is a culture of obstruction to a clear path so as to achieve political gain (campaign contributions) and union favors that have and continue to push dvelopers away.

    The last two examples were the 18 story hotel on West Exchange Street torpedoed
    by the ward’s Councilman and the destruction of the 9 story hotel proposal at the old Fogerty building…fir the sake of ahi tell workers union.

    The Mayor touts the need to create more taxable property but does nothing about these outrages!

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