EXCLUSIVE: Fane Tower Not Economically Viable, Charges Appraiser Scotti

Friday, November 30, 2018

 

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Scotti claims the numbers for the Fane Tower don't work

One of the top real estate appraisers in the Providence market says that the Fane Tower project is not economically viable according to his analysis. The analysis was contained in a letter from Peter Scotti to Providence Mayor Jorge Elorza secured by GoLocalProv.

“This project is not economically feasible or financeable as indicated by my analysis and by the analysis that the I-195 Commission ordered. In a nonpolitical atmosphere the proposed project would never have moved beyond the application process. The numbers speak for themselves. Frankly, it is very simple to prove that the project is not feasible. What I find difficult to understand is why Fane is pushing this project, the only explanation is that allowing the zone change to move forward will give Fane a stranglehold on the most promising growth area in the City,” said Scotti.

“We have more faith in Providence and take a more optimistic view.

Mr. Fane completely rejects Mr. Scotti’s analysis. We have over 50 years of successful development in multiple markets. We  expect to be equally successful in Providence," Dante Bellini, spokesperson for the Fane project tells GoLocal.

According to Scotti's bio he has "over 40 years of executive-level experience – spanning the full spectrum of real estate transactions. Recognized sales and appraisal industry expert. Deep understanding of all facets of the commercial and residential real estate marketplace. Especially familiar with the Greater Providence market, including downtown Providence and surrounding communities."

SEE FANE'S PROJECT BY THE NUMBERS BELOW

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Numbers provided by Scotti

According to Scotti’s report, the rents from the project do not support the project cost and he claims the project is not financeable.

“We [Scotti and Associates] assume 0% vacancy and that upon completion the property will be at full occupancy and immediately stabilized. Realistic assumptions such as a 2-3 year lease up and stabilization would significantly impact value and the return on and of investment,” said Scotti.

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Rents in the Providence market according to Scotti

“To support the total projected cost Hope Point will need to roughly double the highest market rents currently attainable in the Downcity, furthermore the analysis assumes 100% occupancy at completion of the project and a very substantial tax break. This project is neither feasible or financeable,” said Scott.

“It is astonishing to think that public employees have pushed this project forward given the paucity of data supplied by the developer and given the I-195 Commission’s consultants report projecting a massive financial shortfall for this development,” he added.

Updated on 11/29/18 at 3:35 PM with comments from Dante Bellini.

This story was first published at 11/29/18 3:28 PM

 

Related Slideshow: Fane Tower By the Number, November 29, 2018

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How many stories tall will the Fane Tower be?  

46

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How tall from ground to top of structure? 

495 feet

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How many restaurants are planned to be located at the project?

2

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How much parking on site below and above ground?  

+/-300 spaces

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How many units in the skyscraper?

+/-420

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How many condos in the Tower? 

+/-130

 

IMAGE: Fane's Toronto project

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Will the Fane Tower have anything on the rooftop?  

Yes. But, the developer has not determined how the rooftop will be developed

 

IMAGE: Fane's Toronto project

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How many estimated residents will live at the property?  

+/-840

 

IMAGE: Fane's Toronto project

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What is the cost of the project? 

The development budget is $300 million, but the construction cost is expected to increase.

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How large is the base of the property estimated to be?  

35,000 square feet

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How much retail will be on the property?  

12,000 square feet

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How long will construction take?

3 years

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How many construction jobs will be created?

1,200 to 1,500

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Amenities?

We expect to provide 30 plus amenities. Potentially tennis in the park. 

 

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