PROVIDENCE, R.I. (WPRI) – In a major boost to New York developer Jason Fane, Rhode Island House lawmakers have authorized up to $25 million in tax credits for his proposal to build a controversial skyscraper in downtown Providence.
The subsidy was added Friday night as a surprise last-minute amendment to the nearly $10 billion House budget, which the House approved Saturday. Developers can typically receive only a maximum of $15 million for a single project from the Rebuild Rhode Island program, but the budget allows Fane to receive up to $25 million.
The budget also raises the cap on all Rebuild credits from $150 million to $210 million, but the same amendment exempts Fane’s project from the program cap, meaning the $25 million for Hope Point would be on top of that $210 million given to other projects.
“This is an extremely important economic development initiative for the city and the state, and we set the funding aside to make sure it is available should the project come to fruition,” House Speaker Nicholas Mattiello said, noting it has been a top priority for Senate President Dominick Ruggerio.
Fane has proposed to build a 46-story luxury apartment building called Hope Point Tower on the former Interstate 195 land in downtown Providence. If built, it would become the state’s tallest building, and it has sparked controversy since it was first proposed more than a year ago.
The I-195 Redevelopment District Commission must still approve the proposal’s design for it to move forward.
The project has been fiercely opposed by neighborhood groups, who criticize the design and the use of “spot zoning” to raise the height of the parcel to accommodate the nearly 600-foot skyscraper. Democratic Mayor Jorge Elorza vetoed a zoning variance last year, but the City Council overrode his veto.
Fane nonetheless has been successful in garnering powerful allies in the General Assembly.
Ruggerio, frustrated with the pace of local approvals for the project, pushed Mattiello to include the $25 million incentive package in the budget, along with separate language overhauling local zoning control for future development in the I-195 land.
“This was a major priority for Senate President Ruggerio, and the House concurred,” Mattiello said.
Ruggerio’s spokesperson confirmed he advocated for the tax credits, but did not immediately have any further comment.
A spokesperson for Fane claims he was unaware in advance that the $25 million would be added to the House budget.
“It underscores the economic development importance of the project such that the leadership did,” spokesperson Dante Bellini wrote in an email.
The floor amendment adding the $25 million for Fane was introduced by Finance Chairman Marvin Abney, D-Newport, and approved quickly. While there was substantial debate among representatives about the project, there was little discussion of the tax credits specifically.
Sharon Steele, the president of the Jewelry District Association and a vocal critic of the Fane project, expressed outrage at the inclusion of the new tax credits.
“Ruggerio and Mattiello claim to be for economic development,” Steele said in an email. “Translation…their mission is to feed the insatiable appetite of the construction industry and all their union members at any and all costs.”
The move gives a financial boost not only to the developer but also to leaders at the R.I. Commerce Corporation, the state’s economic development agency, since exempting Fane from the Rebuild program’s cap leaves them with more authority than originally expected to finance other projects.
Pending approval, Fane will need to secure funding beyond the $25 million public subsidy. He’s estimated in the past the tower could cost $300 million.
His challenge will be convincing financiers that Rhode Island market conditions will sustain the addition of so many luxury apartments in a city where the 2017 median household income totaled $52,530, according to the U.S. Census Bureau.
Peter McNally, former executive director of the I-195 commission, said it’s been challenging to fill the I-195 land because Providence rents have remained stagnant for years. It was unclear whether Fane could successfully fill a tower of luxury apartments, he added.
Bellini downplayed the challenge, saying a final approval from the I-195 commission was needed before “we get to a more robust discussion of financing.” He was nonetheless optimistic about Fane’s prospects.
“Mr. Fane’s stature in that community is such that that’s not going to be an issue,” he said. He added that the longer the process takes, the more “variables” will exist including interest rates and cost of construction materials.
The developer’s portfolio includes apartment complexes in Ithaca, N.Y., New York City and Toronto. Hope Point Tower marks Fane’s first foray into Rhode Island, where he hopes the development could redefine the Providence skyline.