Rhode Island Says Business Is Booming, National Perception Says Otherwise
A low business-friendly ranking and the loss of a beloved Minor League Baseball team isn’t dampening the spirits of Rhode Islanders.
“We don’t put a lot of stock in what one ranking says,” CBRE/New England Senior Vice President Alden Anderson said. “It’s not like they’re the Pope. They’re one opinion.”
Rhode Island has been at the bottom of CNBC’s Top States for Business rankings for years, languishing in last place four times and peaking at 45th in 2017. But Gov. Gina Raimondo’s 2015 inauguration invigorated the Ocean State’s business community, and her administration touts the many corporate relocations and expansions it has ushered in since coming into office. That hasn’t made a difference in the eyes of national media.
CNBC still ranked the state 45th in terms of its business friendliness when the 2018 rankings came out in July. Forbes ranked it slightly higher at 43rd. The Ocean State is the third-worst place in the country to start a business, according to Fortune. Developers and leaders in Providence aren’t exactly stressed.
“In the back stretch we were quite far behind, but now, I think because of the strength of the Boston market and the fact we have added the amenities people are looking for, you can’t stop telling this story,” Cornish Associates Managing Director Buff Chase, who is speaking at Bisnow’s Providence State of the Market event Oct. 4, said. “We’ve started to take off.”
News of Rhode Island’s perceived stagnant business climate comes just as the state’s only professional baseball team, the Triple-A Pawtucket Red Sox, announced it will move across state lines to Worcester, Massachusetts, when its lease at McCoy Stadium in Pawtucket expires in 2020. The double punch to the state’s ego may have made headlines and been a political gift to Raimondo’s opponents come election time in November, but the state’s real estate community maintains Rhode Island is heading in the right direction.
“Everyone in Providence agrees we haven’t really seen the scale of development that’s happening now for at least 10 to 15 years,” City of Providence Department of Planning and Development Director Bonnie Nickerson said. “It’s been notable the change in the skyline and beyond downtown into the neighborhoods.”
While the low CNBC rank is weighted heavily to what the news organization says is Rhode Island’s poor infrastructure, Nickerson said city and state officials are diligently working to improve the quality of business life in Rhode Island. Along with the state’s Rebuild Rhode Island Tax Credit and Rhode Island Qualified Jobs Incentive Act business incentives, Providence offers tax stabilization programs to enable qualified developers to know their tax liability over a 20-year period.
The city also rewrote its zoning regulations in late 2014, streamlined the permitting process, and has a director in charge of assisting businesses to find areas in Providence well-suited for growth and relocation.
“I think in general, there is much more emphasis to making good projects work,” Nickerson said. “It’s by design we’ve streamlined regulations and made administrative adjustments so you’re not spending extra time and money going through boards and commissions."
Developments like South Street Landing and the Wexford Innovation Center in the city’s innovation and design district are what those interviewed for this story see as proof Providence and Rhode Island are much friendlier to business than surveys might suggest.
Brown University, the University of Rhode Island and Rhode Island College are anchor tenants at the $220M South Street Landing, a former power station on the Providence River redeveloped by Boston-based CV Properties. The project houses Brown’s administrative offices as well as a joint URI/Rhode Island College nursing school under the same roof and is seen as a catalyst in creating a local innovation cluster that is common up the road in Boston.
Nearby, Baltimore-based Wexford Science & Technology broke ground in September 2017 on a 191K SF Wexford Innovation Center, which will include a technology arm of Johnson & Johnson, Brown’s School of Professional Studies and Cambridge Innovation Center as tenants.
Cornish Associates and Boston-based Nordblom Co. bought the Providence Journal headquarters at 75 Fountain St. in downtown Providence in 2015 and have modernized the building with the intent of attracting out-of-state companies to Rhode Island. Thanks to coordination with the state, the project was able to attract Virgin Pulse, GE Digital and technology company Infosys, Chase said.
The migration of those companies is what has many saying Rhode Island is far more business friendly than what polls suggest.
“We have a government and leadership in the state that have been working very hard the last four years figuring out how to make it easier for companies to do business in Rhode Island and make it more inviting,” Anderson said. “If it was bad to do business here, those companies wouldn’t come here.”
Hear Anderson, Chase, Nickerson and others at Bisnow's State of the Providence Market event Oct. 4 at the Fairmont Copley Plaza hotel.