John Hazen White’s Lookout: Superman Lights Will Shine Again
Monday, November 18, 2013
Will the seasonal lights in the former Bank of America building at 111 Westminster Street light up the Providence skyline this holiday season? The answer might be no. The historic skyscraper, which by the way was never commonly referred to as the “Superman” building except for more recently when it hasn’t had a bank owner to provide a name for it, is dark, devoid of tenants, and is going to remain this way for some time to come, casting a shadow over the heart of downtown.
The structure’s current owner, High Rock Westminster LLC, just appeared in court claiming it’s owed $33 million by Bank of America for abandoned furniture and a general state of disrepair that leaves the building under code and un-leaseable. Not that High Rock can lease it anytime soon, as it is looking for tax subsidies from the City of Providence, or the state, to help finance its rehabilitation into something new that remains an exercise in “what-ifs.”
Providence is hardly in the mood to extend more tax breaks or tax subsidies when it has granted millions of dollars in property tax exclusions in “stabilization” deals over the years. Providence Place Mall, for example, was freed from paying property tax to the city for a period of 30 years!
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The sad fate of our signature skyscraper reflects not only on Rhode Island’s anemic economy but also on the dashed economic development hopes that our city-state could become a robust financial services center, strategically positioned between Boston and New York. In the 1980s economic planners believed that banking would become a big part of the state’s economic future, and they had good reason to think so. For a time, that hope was reality as first Fleet National and then Citizens, local homegrown banks, prospered and grew bigger, extending out of state but remaining headquartered here.
Those two banks had lots of employees and built signature buildings in Providence to house their headquarters, with Fleet building a second building next to its iconic tower building. Banks were solid, stable and great corporate citizens. But the economic promise in banking was short-lived, overtaken by relentless mergers from even bigger banks in a big fish-small fish feeding frenzy.
We all know what happened in the end to that story because we all got caught up in its epic collapse in 2007-2008. Much of the turnover and turmoil in banking has stemmed directly from the foolhardy permission, granted by the federal government during the Clinton administration in 1999, with the repeal of the Glass-Steagall Act of 1933, to allow traditional banks to engage in a wide range of financial services, including credit default swaps and other highly speculative behavior that banks previously couldn’t engage in with your money. Turning bankers into risk taking traders and investors, we now know, was a not a good idea.
Evolution of an Iconic Edifice
Witness the evolution of the Industrial National Bank, cousin to Hospital Trust Bank, Citizens and Old Stone Bank as the state’s major banking institutions for many decades. Industrial National Bank occupied the city’s tallest building – the 1927 art deco Industrial Trust Tower - for decades and had branches all over the Ocean State. It became InBank for a time and then, under Terrance Murray, morphed into Fleet Bank.
But then Fleet merged with Bank of Boston and Murray moved his office to Boston, promising that the now bigger Fleet would remain committed to Providence. In the end, however, Fleet was ultimately acquired by megabank Bank of America, which had started out in San Francisco. Then two years ago Bank of America announced that it would vacate the space it leased in the Industrial Trust Tower building, effectively ending the relationship with Providence.
Then there is the case of Citizens Bank. Citizens grew rapidly under CEOs Lawrence Fish and George Graboys during the same period, and the bank built an impressive building at the bottom of Steeple Street below College Hill. Citizens acquired smaller banks and became a regional bank with branches stretching from Rhode Island out to Ohio and down through Pennsylvania. The bank became a big regional player and then became a brand of the even higher flying Royal Bank of Scotland (RBS).
Today, RBS is mostly owned by the British government after it had to step in and rescue it during the financial crisis. RBS reported losses of $9 billion last year, and earlier this year announced it would start selling off shares of Citizens to raise much needed cash. Citizens will probably be bought up in the end by some financial entity and served up again, probably under another name. Like Industrial National-Fleet Bank before it, say goodbye to Citizens.
With Citizens on the chopping block, Rhode Island will lose more jobs and the banks’ downtown buildings will have little or no association with their former owners, much like the pre-Civil war gold-domed Old Stone Bank building on South Main Street, which is now owned by RISD. As community benefactors, the successive loss of these institutions has been a significant setback for social service agencies and arts organizations, which have greatly benefitted from their contributions and support over the decades.
Today Rhode Island looks not to banks and financial services as a growing job producing segment of its economy but instead to healthcare and related research in partnership with our universities. The opened I-195 land will be mostly occupied by new buildings dedicated to medical research and education, which will be a much better bet on the future than the now faded promise of banking.
Buildings, especially those with character and heritage, tend to be spared the wrecker’s ball and eventually get turned over to a new life. We have only to look upon the rebirth of the 1828 Arcade building to see what can be done when a developer with vision succeeds. The Arcade had been shuttered for years until its reopening this fall. In a similar fashion, the Industrial National Tower may stay dark for some time but it too will eventually come back to life, perhaps in a new shape and with a new purpose. The lights in its tower will shine again.
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