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State of Rhode Island Picks Sage Hospitality
to Turn Masonic Temple into 250-room
Marriott Renaissance Hotel
By Gregory Smith, Providence Journal, R.I.
Knight Ridder/Tribune Business News 

Oct. 17--PROVIDENCE, R.I.--A Denver company that has specialized in turning derelict downtown buildings into hotels has swooped in as the new savior of the crumbling colossus known as the Masonic Temple. 

Sage Hospitality Resources wants to build a swanky 250-room Marriott Renaissance hotel within the walls of the temple, across the street from the State House, Governor Almond announced yesterday. 

When Sage is done with its $60-million reconstruction, Almond said, the temple will look much as its designer intended 74 years ago when workmen for the Scottish Rite Freemasons laid down their tools and walked away from the unfinished building on the eve of the Great Depression. 

Almond called the plan "the last gasp" for the never-used temple, which has been a haunt for pigeons, vandals and graffiti artists and, for decades, a neglected candidate for demolition. 

At the State House news conference announcing the project, Edward F. Sanderson, executive director of the Rhode Island Historical Preservation and Heritage Commission, called the Greek Revival temple "the most significant unrestored building anywhere in Rhode Island." It is listed on the National Register of Historic Places. 

The Almond administration selected Sage from among six responses to a nationwide advertisement for development of the state-owned site -- with or without the temple. 

Also contending were proponents of two other hotels, one of which would have been a mixed-use project with commercial space; an apartment/condominium building; a music school and a center for the arts. None suggested demolition. 

Given Sage's track record in business -- the company manages 88 hotels and owns 38 of those -- and the fact that its plans were farther along than those of the other contenders, the competition was lopsided, said Joseph R. Larisa Jr., the governor's chief of staff. 

"This proposal is head and shoulders above anything that we've seen in the past 70 years" for the temple, he said. 

The governor said the hotel will help the nearby Rhode Island Convention Center attract more conventions, bolster tourism and the economy, create jobs, put the site on the city tax roll, and improve the Smith Hill neighborhood. 

Convention Center officials say there must be more hotel rooms in proximity to the center to attract larger and more profitable conventions and trade shows. 

Sage in effect has stepped into the shoes of Algen Construction Co., of New Rochelle, N.Y., which also planned a top-shelf hotel at the site. 

Sage is using Algen's architect, Brennan Beer Gorman, of New York City, which has done many large-scale urban rehabilitations; many of Algen's design drawings, and Algen's onetime hotel flag. As Algen originally proposed, it wants to link the hotel to the adjacent Veterans Memorial Building. 

Sage would utilize as a ballroom a basement banquet hall beneath the Veterans Memorial Auditorium in the adjacent building. Guest cars would be valet-parked in the Providence Place mall garage, as Algen planned to do. 

The Almond administration picked Algen in a 1998 competition to reconstruct the temple, but after much review and revision of its plans, the company could not get financing and the governor canceled its development agreement earlier this year. The administration secretly negotiated a new agreement with Sage, it was disclosed yesterday. 

Algen's sign announcing a Wyndham Historical Hotel -- Algen ultimately worked with Wyndham rather than Marriott -- still hangs from the temple. Larisa said it will soon be replaced by a sign for a Marriott Renaissance. 

Sage also intends to capitalize on a financing technique that Algen was to have used: the sale of historical-rehabilitation investment tax credits granted by the federal and state governments. 

The credits can be sold to corporations or even high-net-worth individuals in return for cash to cover the $60-million project pricetag. The buyers use the credits to reduce their tax liabilities. 

Sage hopes to garner about $7.2 million from the federal credits and $6 million from the state credits, according to Kenneth J. Geist, Sage executive vice president. 

"With strong sponsorship, loan guarantees and a large equity stake, Sage is able to secure roughly half of the funds needed to complete this project from its lenders," Geist said. The project would be impossible without the tax credits, he noted. 

The hotel company has done four major rehabilitations of old buildings over the past five years: a department store in Denver converted to a Courtyard by Marriott, another department store in Milwaukee converted to a Residence Inn, a bank building converted to a Courtyard by Marriott in San Diego, and an office building in Pittsburgh converted to a Marriott Renaissance. 

Unlike some of the other contenders for the development rights to the temple, Sage sought no significant state subsidy, officials said. It will, however, get what Algen was promised: a waiver of the state sales tax on building materials and $500,000 that the state was going to spend to close the building to the weather. 

In order to meet the legal requirements for the tax waiver, Larisa said, the state Economic Development Corporation would retain ownership of the land and lease it to Sage. Sage has agreed to make a $100,000 refundable good-will deposit with the state, according to Larisa. 

The state had promised Algen $130,000 for part of the cost of an elevator to serve the Veterans Memorial Building as well as the hotel. But that was not mentioned yesterday. 

Marriott's Ritz Carlton brand is its most upscale and the Renaissance brand the next most ritzy, according to Dan Mahoney, a Marriott executive. Its average nightly room rate nationally is $150, he said. 

The Providence hotel would have a 120-seat fine-dining restaurant, possibly with a wine bar where patrons could sip affordable glasses of very pricey wines and spirits, a fitness center, a business center, a concierge lounge for special guests, room service and overnight shoeshine service. And its exterior would be dramatically illuminated, Geist said. 

The entrance to the hotel would be on Avenue of the Arts (formerly Brownell Street) and the one-story restaurant would serve as an above-ground connection between the hotel and the Veterans Memorial Building. 

Sage, which said it expects a six- to eight-month design and permitting process, is shooting for a grand opening in mid-2005. 

"This is great," declared Catherine Horsey, executive director of the Providence Preservation Society, which campaigned to save the temple. "It looks as if it might finally happen." 

-----To see more of the Providence Journal, or to subscribe to the newspaper, go to http://www.projo.com 

(c) 2002, Providence Journal, R.I. Distributed by Knight Ridder/Tribune Business News. MAR, WYN, 


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