EXCLUSIVE: Fane Tower Not Economically Viable, Charges Appraiser Scotti
Friday, November 30, 2018
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.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTMr. 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
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.
“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
