|By Andrea L. Stape, The Providence Journal, R.I.
Knight Ridder/Tribune Business News
Sep. 10, 2005 - Another hotel project may be in the works for downtown Providence.
Carpionato Properties Inc. of Johnston, is buying a small triangle of land from the city for $2.8 million. The developer is planning to build a $40-million, 15-story high-end hotel with condominiums on the property, according to John Kokot, executive vice president for Carpionato.
The land is bounded by Memorial Boulevard and Exchange Street and is directly across Steeple Street from the U.S. Post Office. The area is currently empty, except for two sculptures.
Carpionato has been interested in developing the property since 2003, but was only recently able to come to an agreement with the city on a sale, said Thomas E. Deller, director of planning and development for Providence.
Now that the property has been appraised and specific timelines have been put in place for development of the project, the city is expecting to have a signed a purchase-and-sale agreement with the developer next week, said Deller.
"It was longer than we would have liked it to take," said Deller.
This is the latest in a long series of plans for this small, odd-sized chunk of city property. In the late 1990s, former Providence Mayor Joseph Paolino Jr.'s development company was given the rights to develop the property. In 2000, Paolino made a formal offer to buy the land to develop a Hyatt hotel with condominiums on top, but was unable to bring the hotel to fruition and the city started looking for another developer in 2002.
In 2003, Carpionato proposed building a hotel on the site and has been in negotiations with the city ever since.
Deller said there have been concerns that building on the land would be prohibitively expensive or impossible since the property was created when fill was dumped from the rerouting of the Woonasquatucket River. The site has a high water table and a building would have to be built on piles, but questions about the land's strength were recently put to rest when an engineer hired by the city approved the property for building.
Carpionato is now proposing a restaurant, a 200-room InterContinental Hotel & Resort with several levels of parking and condominiums on top. The condos, which would be pre-sold, would be used as a revenue stream to finance the project, said Kokot.
"The site is difficult to work with . . . so your foundation, your superstructure, is very expensive," said Kokot. "The income from the condos will help finance the entire project." The company estimates building costs will be about $200,000 per hotel room.
The city is not interested in extending any tax breaks, or public financing, said Deller. And once the sale contract is signed, the company must put down 10 percent -- or $280,000 -- as well as pay the city a $25,000 fee. That fee will be used to hire a consultant to make sure the company is moving quickly through the development and design process, said Deller.
"We don't want to tie property up for long periods of time without something happening, like we have in the past," said Deller.
The city has also required the company to move quickly through the design and permitting process for the building and is reserving the right to take back the property if Carpionato appears to be dragging its feet, said Deller.
Kokot, though, said the developer is ready to go, and does not think there are too many hotel rooms coming on line in Providence.
"I think we would like to start site work and foundations as soon as possible," said Kokot. "I think the project would be in active development phase by next spring or early summer."
This hotel would be the latest in a series of hotels going up in the capital city district. The Westin Providence undergoing a 200-room expansion, the former Masonic Temple is being converted into a 274-room Marriott Renaissance Hotel and the city's empty Fogarty Building across the street from the Westin has also been proposed as the site of a new hotel.
Although Kokot concedes that cities do have a tendency to overbuild hotels, he said Providence is not in that position yet.
"I think downtown Providence is close to having a sufficient number of hotels," said Kokot. "But we would not embark on the project unless we were confident that all the uses we were contemplating were viable."
The Rhode Island Convention Center Authority has been pushing for years for more hotel rooms in the city, so larger conventions can be booked. Yesterday James McCarvill, executive director of the authority, said that another national hotel opening in the city would help market it nationally. Carpionato would franchise the InterContinental hotel brand from Atlanta-based InterContinental Hotels Group, a national hotel company which also owns the Holiday Inn and Crowne Plaza brands.
After all the various development proposals for this small site, Deller said Carpionato will make this one a reality. Carpionato also owns the Crowne Plaza at the Crossings in Warwick and the Holiday Inn Express & Suites at T.F. Green Airport. Carpionato also was a bidder for the Westin Providence when the state put the downtown hotel on the market last year.
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Copyright (c) 2005, The Providence Journal, R.I.
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