Target 12 on WPRI.com

Fane Tower in a ‘state of limbo’

Target 12

PROVIDENCE, R.I. (WPRI) – At 1 a.m. on June 22, developer Jason Fane sent an email to I-195 Redevelopment District Commission chairman Robert Davis, warning Davis not to delay a key vote related to his proposed skyscraper in Providence.  

“Usually reliable sources tell me that the General Assembly is not sympathetic to any further delay and that they strongly support moving these approvals forward right now,” Fane wrote.

Davis responded later that morning with some confusion.

“Jason: The Commission granted design review approval last September,” he wrote, referencing a Sept. 25 meeting last year when the commission voted 5-1 in favor of a final design for the 46-story residential high-rise.  

“There is no delay on our part,” he added.

The email, obtained by Target 12 through a public records request, led Fane spokesperson Jim Malachowski to explain that the developer is a “night owl,” and the email went out as part of a “computer glitch that sent out draft emails.” Several others went out to other people, he added.

When asked why Fane didn’t respond to Davis with an explanation for the error, Malachowski said, “that’s not the way he is.”

“He’s very busy and has a lot of business interests in a lot of different places, so for something like that, he would not make an effort to apologize and say it went out,” Malachowski added. “In his mind, he’s moved onto other things.”

The strained back-and-forth between Fane and state regulators overseeing his $300 million skyscraper is nothing new, as the project — known officially as Hope Point Tower — was first proposed four years ago. Since then, Fane has clashed with many local and state regulators over various approvals, deadlines and communications.

But the documents provided to Target 12 show the relationship has reached a new level of ambiguity during the coronavirus crisis, as regulators have become exasperated by the developer’s unwillingness to set an end date to his proposed postponement of the project.

In May, Fane asked the commission to delay all development deadlines indefinitely, including contractually obligated payments, citing extenuating circumstances caused by the pandemic. When the commission asked Fane for a “revised timeline and terms,” the developer pushed back, again pointing to the public health crisis, among other things.

“This is an inherently unfair situation under the present circumstances since Fane has been deprived of a full and fair opportunity to complete its task,” Fane attorney Scott Spear wrote to the commission on June 26, four days after his client’s unusual, late-night email to Davis.

The circumstances, Spear added, included government-mandated lockdowns, soaring unemployment, travel restrictions and “rioting mobs, arson, looting and vandalism.”

“These adverse and worsening social conditions are causing instability and harm to the local market real estate industry in which Fane is poised to make a significant financial investment,” Spear wrote.

The attorney also argued that the development process should not resume until the courts reach “a favorable decision” in an ongoing legal challenge against the project. A group opposing the project filed a lawsuit alleging the Providence City Council decision to approve a zoning variance in favor of the project in 2018 did not conform to the city’s comprehensive plan, constituting illegal spot zoning.  

Fast forward to July, and the commission’s attorney Charles Rogers fired back, arguing that to allow such ambiguity around postponement wouldn’t be advisable from a legal perspective.  

“The mechanism is flawed insofar as it proposes a start date which may never happen or over which there could be considerable debate,” Rogers wrote in a letter dated July 21. “I have cautioned the District about the risk of entering into an open-ended amendment which would call for terms that could later be subject to dispute. Such an arrangement would invite litigation if at such later time the parties could not reach agreement.”

Beyond revised timelines and terms, Fane was expected to make two payments by the end of July totaling about $250,000. Documents also show the developer has yet to execute a tax-stabilization agreement with the city — which was a major point of contention last year — “nor paid the balance of the application fee of approximately $25,000.”

As of Thursday, the commission had not yet been paid. A Providence spokesperson could not immediately say whether the issues with the city had been resolved since the July 21 letter.

On July 31, when the commission was expecting both payment and a response from the developer, Fane’s attorney Spear responded with his own cryptic email.

“Unfortunately, a personal matter has arisen which has precluded Jason from conferring with his advisors,” Spear wrote. “I am hopeful and optimistic the situation will make a quick turn for the better and that Jason will be able to get his response to the Commission next week.”

‘Working very hard’

Reached Thursday, Malachowski said Fane is now fine.

“It’s all resolved,” he said, declining to elaborate on what was being referred to in the July 31 message. “His health is fine. He’s working very hard.”

Three weeks into August, the commission and developer still haven’t reached an agreement, but Malachowski said Fane is requesting a postponement until Feb. 1, or later if the zoning litigation hasn’t been resolved.

Superior Court Judge Brian Stern earlier this year declined to make a judgement in that case, telling the involved parties there wasn’t enough information to decide.

The case remains open and no future hearings have been scheduled, court records show.

“It’s very difficult to give a specific date because it’s a moving target,” Malachowski said about providing an end date for the postponement. “The COVID situation is not over and they still haven’t gotten a decision from the judge.”

Jewelry District Association president Sharon Steele, an outspoken critic of the project and a member of the group challenging Fane in court, argues the developer’s inability to move the project forward over four years raises serious red flags.

“The combination of Fane’s inaction and excuses smacks of land banking,” Steele said, referring to an investment strategy involving developers who purchase or tie up property without any immediate plans to build.

Developers are not allowed to land bank property within the I-195 redevelopment district, which cuts through the downtown of Providence, under the state law that created the special zone.

Steele also criticized the commission for allowing the inaction. Despite the July 31 deadline coming and going, regulators insist they have not authorized any extension for the project. Yet Davis confirmed they also haven’t issued any warnings or default notices, either.

Steele said the commission’s toadying of the development has encouraged “Fane’s behavior.”

“The commission has failed badly to enforce its contractual rights or regulations with respect to Fane,” Steele said. “Rather than obsequiously asking Fane what he wants, a firmer approach was and is required.”

Speaking with Target 12, Davis said there are still a lot of “collateral details” that haven’t yet been spelled out in communications with the developer, which makes moving forward a challenge. He wouldn’t elaborate on what those details included, but said it has “not been an easy process to get clarity” from Fane.  

“Until we have that clarity, we are in a state of limbo,” Davis said, adding that he hopes to have clearer details in the near future.  

Davis said no other developer working on projects in the redevelopment district has faltered or asked for postponements during the pandemic, saying the commission could be closing on two deals this fall with construction “starting promptly thereafter.” More recently, Davis said the commission issued a request for proposals for another parcel of land, and received “quality responses” from two companies.

When asked whether the commission would be seeking to reopen the existing contractual agreement with Fane – which is something Rogers suggested as a possibility in one of his letters, especially if the developer wants to make the zoning decision “a linchpin of the transaction” – Davis said he didn’t want to speculate.

“It depends on what he’s really asking for,” he added.

The chairman declined to discuss Fane’s late-night email in June, saying, “the message speaks for itself.” But he did note that the design approval opened the door for the developer to start moving forward quickly.

“We put him in a position to proceed without any other delay, so he did have all the fall and early winter to be moving forward,” Davis told Target 12. “No one was dealing with the encumbrance of COVID-19 at that point.”

Eli Sherman (esherman@wpri.com) is a Target 12 investigative reporter for WPRI 12. Follow him on Twitter and on Facebook.

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

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