Pandemic may upend plans for Paolino’s downtown boutique hotel

Providence

The Beatrice Hotel downtown is almost complete, but the owner says it may not be able to open as planned because of the pandemic. (WPRI/Steph Machado)

PROVIDENCE, R.I. (WPRI) — A boutique hotel slated to open downtown later this summer may become apartments or an “extended stay” hotel — or just delay its opening — because of the COVID-19 pandemic, real estate developer Joe Paolino said Monday.

“The entire hospitality industry has been devastated,” Paolino, the former mayor of Providence, told WPRI 12. “Anybody that’s planning a hotel … needs to be very concerned right now.”

Paolino said he has doubts about his opening date for The Beatrice Hotel on Westminster Street, currently pegged at September, and noted that a restaurant which was lined up to open inside the mostly vacant building he owns has now pulled out because of the economic effects of the pandemic. (He declined to name the restaurant but said it was from “out of state.”)

Contingency plans include delaying the opening or changing course to offer the Beatrice to residential tenants, instead of travelers.

“I like to have two spare tires, not one,” he said. “Right now, nobody’s traveling.”

The Beatrice is one of a number of hotels being planned in Providence that could be in jeopardy because of the pandemic, as fewer people are traveling and Rhode Island implements new travel restrictions for people in states with higher levels of COVID-19 spread.

Paolino Properties has already received millions in both Tax Increment Financing (TIF) from the state and a Tax Stabilization Agreement (TSA) from the city of Providence to develop the building into the hotel and restaurant. The building straddles the block between Financial Plaza and Kennedy Plaza, with the entrance directly across from the Turk’s Head Building.

Paolino said if he transitioned the hotel into apartments or extended stay, he would structure it in a way to still collect the hotel and sales taxes to fulfill the obligations of the TIF. The state financing gives developers a portion of the tax revenue a business is expected to produce as an incentive to develop buildings.

Paolino made the comments about turning the hotel into apartments while requesting an address change for the property from the City Council Committee on Urban Redevelopment, Renewal and Planning Monday.

“I don’t know if I’m going to open up in September,” Paolino told the committee. “That’s going to be a tremendous financial hardship to my company.”

Over the objection of the city’s acting fire chief, the committee vote 4-to-1 to approve Paolino’s request to change the address of the hotel from 63 Westminster St. to 90 Westminster St., which would put it more in line with the office building he owns next door at 100 Westminster St.

He also asked for the address of the hotel’s proposed restaurant, which has a separate entrance, to be changed from 30 Kennedy Plaza to 50 Westminster St. He said he wants to begin printing marketing materials with the new addresses.

Police Chief Hugh Clements notified the committee he had no objection to the address change, but Public Safety Commissioner Steven Paré — who is the acting fire chief — said he opposes the change.

He said because Westminster Street has odd numbers on the left and even numbers on the right, changing 63 Westminster to an even number could confuse first responders who are looking for the building.

“If this continues, it brings a public safety concern,” Paré said. “It’s not a huge concern, but if we as a city continue to allow these exceptions, it’s going to get awfully confusing.”

He noted that Paolino’s office building at 100 Westminster is on the odd numbered side of the street, and said he believes the city should change that address to an odd number. (Paolino said he himself supported changing the address to 100 Westminster when he was mayor, back when it was owned by Fleet National Bank.)

Multiple members of the committee said they supported the address change in the spirit of accommodating economic development, considering the number of vacant buildings downtown. (The empty Superman building is in spitting distance of The Beatrice.)

“These two buildings are empty right now, that’s two new businesses coming online,” said City Council President Sabina Matos. She noted the high familiarity with the 100 Westminster Street office building, and said it was therefore unlikely that first responders would be confused about where 90 Westminster is located.

“It’s going to create numerous jobs,” said Councilman Nicholas Narducci. “I don’t see how it would be that big of an issue for the Providence Fire Department or the Providence Police Department to find the building.”

Councilman James Taylor, a former firefighter, said the city dispatch system allows an address to be given an alternate name such as the name of a hotel, to help dispatchers direct first responders where to go.

Councilwoman Carmen Castillo was the only no vote on the address change, saying she was concerned about whether the hotel would have “good jobs,” and noting that it’s often confusing to locate buildings downtown.

The Beatrice is not the only historic downtown building being developed into a hotel. The former Providence Journal and Kresge department store buildings, also vacant and on Westminster Street, are slated to become the Hotel Hive after a contentious fight over whether to approve tax breaks for the property.

The developer of that hotel did not immediately respond to an email Monday about whether the pandemic has affected his plans.

Steph Machado (smachado@wpri.com) covers Providence, politics and more for WPRI 12. Follow her on Twitter and on Facebook

Copyright 2020 Nexstar Broadcasting, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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