Reaction to Failure of Fane Project - What Message Does It Send?
GoLocalProv Business Team
Reaction to Failure of Fane Project - What Message Does It Send?
Developer Jason Fane announced Friday he is pulling out of his proposed project, more than six years after it was first proposed.
“I am disappointed in the news that the Fane Organization will not be proceeding with their proposed development. The project would have provided badly needed housing and jobs, and helped to foster a vibrant downtown. I always looked to the I-195 Redevelopment Commission to conduct their necessary diligence, but my concern with this particular project was that the developer faced numerous roadblocks separate and apart from that review process,” said Ruggerio.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLAST“Particularly, I am concerned with the signal being sent to other developers who might want to invest in Rhode Island when we put up obstacles to development that take years to overcome. In construction, time is money. When a developer is seeking to invest hundreds of millions of dollars in our capital city, we should welcome them, not chase them away,” added Ruggerio.
The project was slated to cost about $400 million, create 1,200 construction jobs and provide more than 400 new housing units.
Fane, who first proposed the project more than six years ago, faced opposition from former Mayor Jorge Elorza, the Providence Preservation Society, and some members of the Providence City Council.
“I came to Providence with a vision for a great and iconic project that would provide much-needed housing, quality jobs, and revenue for local government and have worked long and hard to make it a reality," said Fane Organization President Jason Fane.
"However, due to recent risk factors outside of my control, it is no longer feasible to move forward with this project,” Fane added.
During the course of six years, construction costs skyrocketed, and interest rates exploded.
Loss of New Housing
For Rhode Island, which is facing a major housing crisis, the death of the Fane project means that more than 400 new units will not be realized.
Ben Scungio, of Mott & Chace Sotheby’s International, who specializes in downtown housing and condos, told GoLocal in January during an interview that the addition of the Fane project was critical to Rhode Island beginning to meet the demand.
GoLocal previously reported that, per capita, Rhode Island is last in building new housing units in the United States.
Governor Dan McKee’s office refused to answer questions about the loss of Fane, the hit to the housing inventory, or Rhode Island as criticism of Rhode Island’s business environment.
His office said, “The I-195 Commission has assured us that they will make this parcel available for other potential developers as quickly as possible.”
“The lawsuits (against the Fane Tower) and the opposition from Elorza, they accomplished what they wanted to — run out the clock,” said downtown developer and former Mayor Joe Paolino.
“By stalling this, it took Jason Fane from good economic times to a very uncertain economic future, and with rising interest rates, they killed the deal. There’s no way any developer can pay 8 to 10 percent in interest. It was just a matter of time,” said Paolino.
Referring to affluent East Siders who opposed the project, Paolino said, “You have to strike when the iron is hot — we had a hot climate and didn’t take advantage of it. The opponents are probably having a Manhattan with their tea sandwiches celebrating tonight.”
Speaker of the House Joe Shekarchi said, “I’m very disappointed in the decision, but it is understandable and I’m not surprised. As a land use attorney, I know the obstacles that developers so often face. It is an extremely valuable piece of land and I’m confident it will be attractive to other developers. I’m optimistic about the future of biotech and life sciences in our state, and that is prime real estate for potential growth in that field.”
Providence Mayor Brett Smiley refused to respond to questions about the message this sends to others about doing business in Providence.
This story was first published 3/10/23 5:04 PM