PROVIDENCE, R.I. (WPRI) – Rhode Island has agreed to pay nearly $2 million to lease the former Citizens Bank building in Cranston for at least six months, one of three locations where the state is setting up makeshift hospitals.
The R.I. State Properties Committee on Tuesday approved the deal with 100 Sockanossett LLC, a subsidiary of the Carpionato Group, along with a $100,000 month-to-month lease to use the former Lowe’s store location owned by R.I. Commerce Corp. at North Kingstown’s Quonset Business Park.
The state plans to set up the third hospital at the R.I. Convention Center, which is owned by the R.I. Convention Center Authority – a quasi-public agency – but details of that lease are still under negotiation.
Dimeo Construction Company has been hired to do all of the retrofitting work at the three locations, which are slated to open soon, according to the committee.
General Treasurer Seth Magaziner, who is also a committee member, lauded the R.I. Department of Administration and the R.I. National Guard for securing the three locations so quickly, saying the effort will help address the expected oncoming surge of COVID-19 patients.
The disease, which had killed 30 people and hospitalized 123 others as of Tuesday, is expected to overwhelm current resources — such as beds — available at hospitals. The three locations combined are expected to add at least 1,000 more hospital beds to the state’s capacity.
“These are obviously unprecedented times for the state, so when the surge comes all Rhode Islanders who are inflicted by the COVID-19 virus will be able to receive high-quality treatment in facilities that are safe and secure and professionally managed,” Magaziner said during the meeting, held remotely on a conference call.
When asked why the state had to pay to use space in buildings owned by quasi-public agencies, state spokesperson Brenna McCabe said it’s the quickest option possible. But it might also be fiscally beneficial to the state and its quasi agencies if the spending is reimbursed by the federal government.
“It’s important to note that quasi-public corporations are separate entities with their own debt and liabilities,” McCabe wrote in an email. “The State has agreed to pay the quasi-public corporations for use of the facilities and to shoulder the operating costs of spaces that would otherwise have minimal or no activity during this time. We fully expect these COVID-19 direct response efforts to be reimbursed by federal funds.”
Nonetheless, taxpayers will pay less to Commerce in North Kingstown than to the Carpionato Group in Cranston.
The cost of the Cranston lease totals roughly $12 per square foot compared to $8.22 per square foot in North Kingstown. Nonetheless, Magaziner said he thinks the Carpionato price is fair given the developer recently listed the vacant building publicly at $14 per square foot.
“Similarly, I understand this site was also in play during a public RFP for a different use, and while not successful again the rate that was proposed was comparable,” Magaziner said. “There are good data points that the price here is at market price, or even slightly below market price.”
In addition to paying the Carpionato Group $302,105 per month through September, which can be extended month-to-month if necessary, the state is expected to pay for utilities and the company’s real estate taxes for the building and 13 acres – about 60% — of the surrounding property, according to the lease agreement.
The developer long-time tenant Citizens Bank used the more than 300,000-square-foot building, located at 100 Sockanosset Cross Rd., before moving to its new corporate headquarters in Johnston.
John Ryan, deputy chief at the R.I. Division of Capital Asset Management and Maintenance, or DCAMM, said the Carpionato Group recently donated a large amount of left-behind furniture to the state, which is going to be used at the Pastore Center in Cranston.
“The state of Rhode Island received the bulk of 500 workstations left over,” he said.
Care New England is slated to operate the new makeshift hospital in Cranston, which will provide care to low-acuity COVID-19 patients. The building will also serve as headquarters for the state’s Joint Command Center.
The former retail building is likewise expected to serve low-acuity patients and those in recovery, although it’s not clear yet who will operate the facility. Lifespan, the state’s largest hospital group, is expected to operate the Convention Center hospital.
DCAMM, a division of the R.I. Department of Administration, chose the three facilities after touring eight locations with the National Guard and Army Corps of Engineers.
Those locations included the Dunkin Donuts Center, the Louis Pasture Building, five buildings at the University of Rhode Island including the Ryan Center, the old Memorial Hospital and the former St. Joseph’s Hospital.
The group said the three locations at the top of the list were chosen based on location, parking and building features, including size, floor plans, sprinkler systems, electric systems and access, among other reasons.
“It’s important that we still do our due diligence and it’s my determination that we did a good job in making sure these rates were appropriate,” Magaziner said.