EXCLUSIVE: Cost of Superman Building Jumps 43% in Two Years
Monday, April 29, 2024
GoLocal has learned that the cost to transform the Superman Building from a vacant office building to apartments has jumped 43% since state leaders and the developer announced the deal in April of 2022 in the Stateroom of the State House.
The increased price of the project is driven by additional construction and financing costs, according to those directly involved in the deal.
The McKee Administration announced at the time, “The $220 million project announced today will convert the long-vacant, yet iconic, tower into 285 residential apartments, 20 percent of which will be affordable to low- and moderate-income Rhode Islanders, 8,000 square feet of commercial office space, and a mix of retail, event, and community uses in the 26,000-square foot banking hall.”
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTNow, the cost of the project is pegged at $315 million — a 43% increase.
Interest rates are blamed for the biggest cost increase.
The developer and state officials believe they will be able to tap federal financing programs to lower the cost of borrowing for the project.
Specifically, they maintain they will be able to use the Transportation Infrastructure Finance and Innovation Act (TIFIA) program, which provides credit assistance for qualified projects of regional and national significance.
In addition, the developer High Rock Development is increasing its contribution to the project to $61 million, which is an increase from the $42 million committed in 2022.
Federal, State and Local Taxpayers Have Already Committed to Approximately $100 Million
The framework provides that taxpayers will provide the following.
Providence tax stabilization agreement (TSA) will provide tens of millions in subsidies for the project — potentially, as much as $30 million depending on the final project costs and the length of the TSA.
In addition, Providence is providing $5 million in subsidy and another $10M in a low-interest loan (1% interest rate).
The state through a series of funding sources in part in an attempt to avoid legislative approval or a direct subsidy has proposed:
$15M Rebuild RI Tax Credit
$5.7M First Wave Closing Fund
$1M RI Housing Acquisition and Revitalization
$5M RI Housing WHIC
$2.1M New Market Tax Credits
$22M Federal Tax Credits
Depending on the total value of the Providence TSA, the total value of the taxpayer-funded subsidies totals between $90M and $100M.
In October, McKee Says No Additional Public Monies
Appearing on WPRO radio, McKee said, “We are going to hold up our side of the bargain" — but warned there will be no additional public dollars.
“I can’t see putting in more money coming into the project in a way that is coming out of Rhode Island taxpayers,” said McKee on The Matt Allen Show.
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