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Study: $100M needed to make Cranston Street Armory worth $25M

No easy options to redevelop Providence's massive 'Castle for the People,' built in 1907

PROVIDENCE, R.I. (WPRI) - A new assessment of the towering Cranston Street Armory, which has cast a shadow over the city's West End for more than a century, offers a stark opinion about what even a $100 million investment in the landmark would do for its value, the Target 12 Investigators have learned.

The 116-page Redevelopment Feasibility Assessment by the Peregrine Group LLC was commissioned by state officials "to assess the merits of potential investment in the restoration and redevelopment" of the Armory, at a cost of $180,000.

One of the "key findings" in the document might be jolting to fans of history in general, and the immense building in particular.

"Due to its unique configuration, its current condition, and current market rents, the rehab costs are massive compared to potential revenue," the document states. "As a result, a developer (or the State) would need to spend upwards of $100 million to create assets worth $20 to $25 million."

The assessment also estimates it would cost $5.5 million to demolish the Armory, while mothballing the structure - by shoring it up but leaving it vacant - would cost about $1.2 million. Annual expenses such as heat, electricity, insurance and taxes are said to be "a minimum of $500,000/year not including significant capital improvements," according to the assessment.

The state owns the property and has started to invest in those capital improvements, budgeting about $5.5 million through 2018 to patch up what is referred to as deferred maintenance. Those issues include repairing the roof and the distinctive yellow bricks.

Taking care of the Armory falls into the lap of the R.I. Department of Administration. Its director, Michael DiBiase, said his department is looking to "stakeholders" from the neighborhood, city and state for ideas.

"If we're going to put more money, substantial money to improve this building," DiBiase said, "we have to have an idea that those uses are sufficient to outweigh the cost."

The castle for the people

The Armory was built in 1907 for $650,000 and was home to the Rhode Island National Guard until 1996. The Rhode Island State Fire Marshal occupied part of it until recently, and the building is currently used for storage for a number of entities. It is listed on both the state and national historic registers.

It became known as "The Castle for the People," and at one point was regarded as a sort of civic center. A wide variety of events were held there over the decades, from car shows and vaccination clinics to the inauguration of Gov. John Chafee in 1965. In 1973, after a rock concert destroyed the New England Patriots' field, the team practiced in the humongous drill hall.

More recently, Providence Mayor Jorge Elorza held his inauguration celebration in the building last year. The films "Outside Providence" and "Underdog" used that same 83,000-square-foot drill hall as a sound stage.

Kari Lang, executive director of the West Broadway Neighborhood Association, is an optimistic and enthusiastic supporter of the Armory's past and future.

"It's been here for over 100 years," she said. "And it could be here for another 100 or longer if we do the right thing. There is so much potential for this building. There could be a brewery in the basement. It could be a business incubator."

She said wind turbines and solar panels could defray the cost to heat and power the cavernous facility, and argued the projected costs for redevelopment could be offset with grants and historic tax credits.

"I would say that cost is not that high, relative to what it could be," Lang said.

The assessment acknowledges the potential for closing the Armony redevelopment's "financing gap" with financial mechanisms such as a property tax break, sales tax abatement on construction materials, and tax credits. And the document includes a hint of optimism, stating that "subsidies could possibly render the project economically feasible."

But it goes on to indicate the gaps would still be large: a $38 million shortfall to convert the Armory to rental apartments and a $44 million gap to turn it into office space. Most plans would involve building on the two acres of hard wood flooring of the drill hall where so many of the Armory's most notable events took place.

Refurbishing would not be market driven

There are no current plans to tear down the Armory, according to state officials, but one of the "key findings" of the assessment is that the current condition of the real estate market would probably make private investors shy away from sinking a lot of money into a project there.

"Given the physical condition of the building, the anticipated cost of conversion, current market conditions and the complexity of execution, repurposing of the Armory is not recommended," the document states.

State Sen. Paul Jabour, D-Providence, represents the West End neighborhood and said he would love to see the giant structure brought back to life, but is concerned about the financial obstacles.

"It would be a very long-term return on dollars," Jabour said. "It doesn't look like a good idea for even the state to continue to maintain it and spend the money which they clearly have to do. They have to continue to heat the structure. They insure the structure."

DiBiase acknowledges that most of the proposed redevelopment projects seem cost prohibitive, but he's under the impression saving the Armory is an obligation supported by the majority of Rhode Islanders.

"I think most Rhode Islanders believe we should preserve a treasure like this, an asset like this," DiBiase said. "But I also think we have to be responsible about that."

A variety of ideas to fill the space

The assessment looked into several potential plans, including a few that would convert the space into an education facility with classrooms and a cafeteria. Other schematics depict filling the 192,000 square feet with office space, complete with a courtyard. The assessment also took a look at how apartments would look inside the armory, with one option for 168 units of various sizes projected to pull in just over $2.6 million in annual rent.

Lang looks at the Armory as four different sections, including the two head houses, which are the structures with the high-rising copper-crowned turrets. Lang said the basement and drill hall make up the other two sections.

"Refurbishing this would put us on the map," Lang said, calling the landmark one of the most important of its kind in the country. "This could be an economic engine for the city and for the state. The possibilities are really great for this building."

Financial hurdles aside, DiBiase said the Raimondo administration is committed to talking with members of the community about what would work, what is needed and possibly how to pay for it.

"We want ideas," DiBiase said.

Department of Administration spokesperson Brenna McCabe said the first Armory stakeholders meeting was held earlier this month to give a small group of interested parties the chance to discuss redevelopment. She said that discussion resulted in an agreement to create a steering committee to organize meetings and workshops to engage the community.

"It was clear from the meeting that the community treasures the Armory ... and is excited to move forward with this process," McCabe said.

Send tips to Target 12 Investigator Walt Buteau at wbuteau@wpri.com and follow him on Twitter @wbuteau

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