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16th of January 2018

Economy



R.I. Commerce board OKs $14.95M in incentives for three business projects

Kate Bramson Journal Staff Writer journalkate

PROVIDENCE, R.I. — The Rhode Island Commerce Corporation on Monday night approved tax credits and other financial incentives totaling $14.95 million for three projects — a new design and innovation hub by an Indian technology company; a new Fairfield Inn hotel in South Kingstown; and renovations of apartments in several Providence buildings along Westminster Street.

Infosys, the Bangalore company pledging to hire 500 people over five years, received the largest incentive package, but most of the discussion by the Commerce board focused on increasing incentives for Providence developer Cornish Associates to renovate historic downtown buildings.

And although the Fairfield Inn is the sixth hotel to get incentives from the board over the past two years, after members cautioned in June against helping too many more hotel projects, this project's location outside Providence worked in its favor.

"It's great that we're reaching out beyond the center of Providence," said board member Karl Wadensten, who noted he lives in South County and said the South Kingstown local government supports the project.

The board approved:

— $9.85 million for Infosys: $8.5 million in Qualified Jobs tax credits to be paid over 10 years, with a company pledge to keep employees here at least 12 years, with average annual wages of $79,400; $750,000 in Rebuild R.I. tax credits to help offset an $8.5-million cost to outfit an as-yet-undisclosed new Providence office; $100,000 in sales and use tax exemptions for construction costs; and $500,000 in First Wave Closing Funds, to help the company collaborate with local universities to hire employees.

— $1.8 million from sales and hotel occupancy taxes collected in a tax-increment-financing district, to be given over 15 years to Southern Rhode Island Hospitality LLC. That entity is controlled by Thomas DiPrete and Alexander Petrucci, whom Commerce said also owns Suffolk Realty LLC, which owns the land where the hotel would be built. They expect it would cost $19 million to build the 100-room hotel near The Village at South County Commons.

— $3.3 million more to Cornish Associates, whose president is Arnold “Buff” Chace, for a renegotiated Rebuild R.I. tax credit loan, which would now total $10.6 million. In January, the board had approved a loan totaling $7.3 million for the residential and commercial project along Westminster Street.

Although the board's three-member investment committee met Monday before the full board meeting, only members Michael F. McNally and Bernard V. Buonanno III attended. They each voted to recommend the Infosys and Fairfield Inn projects to the board.

But Buonanno left before they discussed the Cornish Associates project because he had to catch a flight. Thus, the committee cast no vote about the Cornish project, although McNally heard details from Jesse Saglio, head of the Commerce Corporation's investment team.

Saglio then told the full board the Cornish project costs have risen since discussions began two years ago, from $29.5 million to $39.7 million. Saglio cited several reasons: The project scope has grown since the developer has acquired another building to be renovated, 31 Aborn St.; construction costs have risen; and it's a complicated renovation of historic office buildings into 54 apartment units and 29,000 square feet of commercial and retail space. The project includes 270, 276 and 290 Westminster St. and 91 Clemence St.

Board member Mary Jo Kaplan noted the board's initial enthusiasm for the project but asked if members should now consider other ways its incentive programs could leverage development investment. Saglio said it was a fair question but the agency still believes finding new purposes for older, empty office buildings in the heart of the city is a sound investment.

Board member Nancy Carriuolo said the agency should continue to invest in this part of the city, which has drawn other state help and has attracted companies whose employees might live in such apartments. She said the possibility exists that "we could lose what we've already invested" if assistance to transform this neighborhood stalls now.

The three projects were approved 6-0, with only six voting members of the 13-member board in attendance. Gov. Gina Raimondo, who chaired the meeting, only votes when there's a tie. Approving the projects Monday were: Carriuolo, Kaplan, Jason E. Kelly, Mary Lovejoy, McNally and Wadensten.

— kbramson@providencejournal.com

(401) 277-7470

On Twitter @JournalKate

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