Superman: Before Public Investment, Time for an Independent Analysis - John Palmieri

Superman: Before Public Investment, Time for an Independent Analysis - John Palmieri

Mr. David Sweetser has done his best, I suppose, to develop this iconic building- maybe the only building in Rhode Island that every adult Rhode Islander can identify -  a building smack dab in the middle of downtown without a viable use. He claims the economics of a rehab for principally residential occupancy do not make financial sense, even with the already nearly $100 million in tax credits and subsidies.

The subsidies, likely, would have to be increased significantly to create any reasonable return for the developer. Sweetser’s expense and revenue assumptions have not been made publicly available for inspection, and the State has not commented on the reliability of Sweetser’s submissions requesting additional financial support.

But we do know that the Governor has denied additional funding commitments. And while Mr. Sweetser’s company, High Rock Development, has stated it is seeking city permits to begin asbestos removal and interior demolition. I can't help but wonder whether this is a sincere effort to finally start the project or buy time. If the State is unable to get a firm commitment from High Rock that private financing is in place to match public sector commitments to build the roughly 300 dwelling units promised, it may soon be time to take public action.

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The Downtown Improvement District, a few years ago, discussed the prospect of using its condemnation authority to “take” the building through eminent domain - a process that would permit a public authority to condemn a building in arrested and deteriorating condition. Board members understandably voiced concern about taking such action unilaterally without sufficient funding in hand to achieve ownership and redevelopment responsibility.

The building may be worth little or nothing on the open market in light of the hundreds of millions needed to rehabilitate it for any productive use. But condemnation will be costly in as much as the owner will fight such an action and demand at least as much as he has spent to purchase, repair, and maintain the building.

But continuing to sit around for another ten years would be a travesty. As this hallmark building sits fenced off and unoccupied, it hurts surrounding property values and sends the wrong message to investors, abutters, and all of us who want to see downtown prosper.

Public trust will be essential to this process. The Rhode Island Foundation, a respected non-profit devoted to the people of R.I., can provide a valuable public service in securing impartial advice from experts in the fields of development and finance. While critics and politicians might attack any governmental plan to save the Superman building, few would question the integrity of the Foundation in finding expert independent consultants (McKinsey, Deloitte, or KPMG for example) to identify a strategy for redevelopment. Different consultants than those working for Commerce Corporation.

Any report issued by the consultant would have to demonstrate that desirable economic impacts, i.e., jobs, taxes, and local spending, would offset costs associated with the investment from the state and city to save this signature building.

The Foundation’s new executive director, former Providence Mayor and Congressman David Cicilline, who has the skill sets needed to convince the public, state, and city officials that the Foundation’s role is to serve as an impartial third party, an honest broker and convenor, devoted to identifying the most viable way forward.

Leaving this blight in place is no longer an option. The Superman building and Providence deserve better.

 

John F. Palmieri has held top planning and economic development positions in Providence, Boston, and in the state of New Jersey, working with Vincent Cianci, Thomas Menino, and Chris Christy.