PROVIDENCE, R.I. (WPRI) – State regulators have agreed to extend a tax-treaty deadline for the so-called Hope Point Tower after the developer promised to pay $3.7 million to the state if the deal falls through.
The Fane Organization, which is seeking to build a 46-story residential high-rise in downtown Providence, was due to file an application with the I-195 Redevelopment District Commission on Wednesday for a tax-stabilization agreement. After some last-minute promises were made, however, the commission agreed to extend the deadline for a third time, to Sept. 6.
“Today the commission received written confirmation from the Fane Organization that the original terms of the guaranty are still in place,” 195 Commission Chairman Robert Davis told Target 12 on Wednesday.
The guaranty – a technical word used in real estate development to describe the money the state would collect if the developer walks away – has been a point of contention between the developer and the commission in recent months.
The developer, Jason Fane, previously asked for the guaranty to be reduced to $3 million after initial terms were agreed to in January. But the commission has said it has no interest in renegotiating the original terms, and warned Fane earlier this week it would be unwilling to extend the tax-treaty deadline without a recommitment to the $3.7 million payment amount. Davis said the issue was unresolved as recently as Tuesday.
It’s not entirely clear what ramifications – if any – the developer would face if he missed the tax-treaty deadline, but the commission’s stipulation appears to have worked.
“The Fane Organization has signed and submitted to the 195 Commission an amendment to the purchase and sale agreement,” Fane spokesperson Jim Malachowski wrote in an email Thursday night. “This amendment agrees to the form and language of the guaranty.”
The deadline for the underlying tax-treaty application, originally June 30, was extended for a second time last week after the developer said outstanding questions about the project design were preventing him from filing an accurate application.
Malachowski said earlier this week the two sides were still negotiating on the design, resulting in the need for a third extension.
“The Fane Organization simply cannot complete the TSA filing until it knows what the design of the project will be,” he said.
Fane’s proposal to build luxury apartments on the former I-195 land has been a hot topic ever since it first surfaced more than a year ago.
A series of letters recently obtained by Target 12 show regulators have become increasingly frustrated with the developer since first entering into an agreement with him in January.
“We are writing to express our disappointment at the organization’s failure to perform its obligations under our agreement,” Davis wrote in one letter last month.
Providence Mayor Jorge Elorza has opposed the development while a majority of city councilors have supported it. Fane has also garnered power allies at the State House, where lawmakers earmarked up to $25 million in incentives for the project in the most recent state budget.
Senate President Dominick Ruggerio, a Democrat, has been the most vocal advocate of the project, championing legislation to make it easier to develop on the I-195 land.
Ruggerio did not respond to a request for comment on the latest developments.
Nevertheless, Malachowski told Target 12 this week Fane expects to submit a final design proposal soon, which will be reviewed by the commission in the coming weeks. He has declined to estimate how much the project will cost, saying the final number will depend on the design.
“Approval of the final design is a critical milestone for the project, which will allow Fane to proceed on a number of other fronts,” Malachowski said.