Superman Building Plans Heat Up: Who Are the Players?
Friday, May 03, 2013
Economic Impacts Unveiled
According to reports released on Tuesday, High Rock Development is looking for $70 to $75 million in local, state, and federal funding to turn the "Superman building," which it currently owns, into 278 upscale apartments.
The studies conducted indicate that the project would cost between $140 to $145 million, which would include a $70 million investment from High Rock, who is then is looking for $39 million in support from the state, $21 million in federal historic tax credits, and a 17 year, $10-15 million tax stabilization agreement with the City of Providence.
Who's Backing the Effort?
High Rock Development
Headed up by founder and principal David Sweetser, High Rock Development purchased the property at 111 Westminster in 2008, a year after closing a $50 million fund to "acquire, develop, re-develop, lease and/or sell real estate in the United States." Sweetser, a Bowdoin College alum with a MBA from Suffolk University, had previously been COO for Heritage Property, Director of Leasing for Eastern Development, Inc., President of GovConnect, Inc. (Renaissance, Inc), VP of Real Estate for National Amusements, Inc., Founder and President of Trademark Development, Inc. and VP of Leasing for Equity Properties and Development Co.
Nick Hemond and Zach Darrow -- Capitol Communications Group LLC
Hemond and Darrow are the primary lobbyists for the entity known as Capitol Communications Group LLC, whose clients include High Rock, Cornish Associates, Rhode Island Autobody Association, Rhode Island Fraternal Order of Police, and Rhode Island Carpenters Local Union 94, and AAA of Southern New England, among others
Darrow, Managing Partner at DarrowEverett LLC, represented High Rock in connection with their initial acquisition of the 111 Westminster property in 2008. Hemond, also an attorney, helped House Speaker Gordon Fox on his re-election bid in 2012. Prior to having a lobby roster of 8 clients in 2013, Hemond was listed as only having one -- the Fraternal Order of Police -- while at the law offices of State Representative K. Joseph Shekarchi in 2011 and 2012.
Bill Fisher -- True North Communications
Fisher has been serving as spokesperson for High Rock Development, and said on Tuesday in a prepared statement, "It is incredibly important that we get this right and adopt a plan that ensures the highest and best use of the building." Other clients of True North's include Landmark Medical Center, Beacon Mutual Insurance Company, as well as several education and environmental groups. Fisher served as campaign spokesperson for Speaker Fox's 2012 campaign.
Headed by Arnold "Buff" Chase, Jr., Providence-based real-estate development company Cornish Associates counts among its properties the Westminster Lofts, which includes the Peerless Building, Smith Building, Burgess O'Gorman Building, Wilkinson Building, and Alice Building. Cornish also lists the redevelopment of the Harkness Building, the Empire Building, and the Biltmore Garage as among its projects.
In a statement issued on their website on March 22, Cornish wrote, "We know you are interested, so just to clarify...Cornish Associates has been retained by Highrock Westminster LLC, the building owner, as a development consultant to produce a feasibility study and to coordinate the redevelopment of 111 Westminster St also known as the Superman building." Cornish prepared the proposed project summary statement that was unveiled on Tuesday.
Darrow told GoLocalProv on Thursday that Cornish "was selected as the local feasibility and development consultant as part of a multiple candidate interview and selection process by High Rock."
Keystone Consulting Group and HR&A Advisors
Questioning the Superman Plans
Representative Patrick O'Neill
Representative Patrick O'Neill, former house majority whip, was one of the first people to publicly oppose utilizing historic tax credits -- and taxpayer assistance -- to fund any renovations of the Superman building.
In a conversation with GoLocal back in March, O'Neill said, "I've got real concerns about using tax credits here. We're looking at putting Rhode Islanders on the hook again [after 38 studios]...I'll be honest, I've got a whole host of concerns about how this is unfolding."
Moderate Party Chairman Ken Block
Earlier this week, following the release of the High Rock feasibility studies, Block issued a scathing statement on the proposed project, comparing it to "another 38 Studios."
Speaking with GoLocal on Thursday afternoon, Block said, "Look, I'm open to being convinced that this is a good deal, but right now, at this juncture, it just doesn't make sense." Questioning the timing of the release of information relative to the General Assembly calendar, Block said, "Let's look at this in the bright light of sunshine. Acting quickly here is in the absolutely worst interest of Rhode Islanders."
Speaker of the House Gordon Fox
While questions initially surrounded where Speaker of the House Gordon Fox stood on the deal, and the use of tax credits in a particular, his office issued the following statement this week shedding light on his stance.
“The ‘Superman’ building is a beautiful and significant landmark in downtown Providence, but I am deeply concerned about the amount of taxpayer dollars that are being sought for this project. As was announced last week as part of our economic development package, the House is introducing historic tax credit legislation with a $5 million cap on credits for any single project. If this tax credit program is reinstated this year, the developers could apply for those capped credits. Beyond that, I believe the state is not in any position to provide the level of financial assistance that the developer is seeking."
Governor Lincoln Chafee
Governor Chafee has continually expressed concerns regarding the use of tax credits -- and taxpayer dollars -- to bankroll a private renovation effort at 111 Westminster.
"The Governor has consistently indicated his concern at the amount of taxpayer assistance being requested," Chafee spokesperson Christine Hunsinger told GoLocal on Thursday. "He's willing to listen however."
Jobs, Economic Development Promised
According to High Rock, over 1000 jobs would be generated during construction, with 230 permanent post-development jobs, and an economic impact of $4.6 million in tax revenues during construction plus anticipated annual state sales and income taxes of $680,000.
High Rock claimed on Tuesday, "If the building were not converted to residential use, it could the cost the city up to 25 years to absorb this amount of space."
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- LISTEN: Superman Deal Similar to 38Studios?
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- Rep O’Neill Criticizes Fox & Superman Plan - Similar to 38 Studios