Superman Returns: Can Providence Turn The Lights Back On At Its Tallest Tower?
The tallest building in the Providence skyline has been dark since 2013, but vacancy does not mean inaction. There is plenty of activity going on behind the scenes to bring the 428-foot tower back to life.
“The big thing that Providence needs downtown is for that building to get occupied,” former Providence Mayor and Paolino Properties Managing Partner Joseph Paolino Jr. said of the city’s Superman Building. “It’s become a symbol.”
The Superman Building, formally known as 111 Westminster St., hit the market in 1928 and got its nickname due to its likeness to the Daily Planet building from comic books. It went through several name changes over the years due to acquisitions of each of the banks that called it home. Its last tenant, Bank of America, announced in 2012 it would not renew its lease, leaving the tower vacant when it moved out the following year. High Rock Development, which bought the building for $33.2M in 2008, needed a redevelopment plan.
“We looked at all the options and ran economic impact studies and analysis,” Cornish Associates Senior Associate Steve Durkee said. “Housing was what would work.”
Durkee’s firm has restored several historic buildings in downtown Providence, so High Rock hired it to find the best path forward for the vacant tower. Life as an office building was not feasible. Putting the available 380K SF of office back into the city’s Class-B market would have crushed business and driven all building values down, he said. The company’s analysis estimated it would take 24 years for total absorption. Instead, it came up with a plan for 280 units of housing that required financial help from the city and state.
“That wasn’t going to happen,” Durkee said. “There was zero appetite. 38 Studios had just happened.”
Former Boston Red Sox pitcher Curt Schilling’s video game company, 38 Studios, got a $75M Rhode Island taxpayer loan in 2010 to move from suburban Massachusetts into One Empire Plaza in downtown Providence. Although the company promised to deliver 450 jobs, it lost money in an early project and filed for bankruptcy. It is estimated the state has lost $39M after a series of lawsuits lowered an initial projected loss of $110M from the deal.
Rhode Islanders have a financial incentive hangover, and leaders are quick to say they will not repeat the 38 Studios mistake.
“We are exploring ways to reactivate the building within the confines of our existing programs and ensure it helps to get redeveloped,” Rhode Island Commerce Corp. President Darin Early said. “Ultimately, [the Superman Building] is owned by a private entity, and, while we are willing to bring the resources that we have available through our programs, there has to be demand for it.”
Rhode Island’s new tax incentive plans are part of Gov. Gina Raimondo’s development toolkit to bring new business to the state. In terms of real estate, the state looks to see a return on its investment. Beyond tax revenue, the state can also negotiate an investor return if a project succeeds at a high level, Rhode Island Secretary of Commerce Stefan Pryor told Bisnow in August.
“When you get growth going, that’s when you see deals pencil out,” Early said. “We have a lot of real estate development going that is going to attract growth and increase demand for projects like the Superman.”
Demand might already be there.
Paolino owns a parking lot next to the Superman building and has worked with High Rock in hopes of landing a tenant that would also make a development on the parking area conducive. While financial incentives for housing at the structure was a non-starter, office use re-emerged as a likely path forward when Citizens Bank looked to build a new corporate headquarters in 2014.
“All of a sudden, the office use is on the table again,” Durkee said. “Three thousand jobs would have gone into the building. It was stunning to think about.”
Real estate advisers pushed the move, and an additional tower was designed for Paolino’s parking lot. But Citizens pulled out at the last minute and decided to build a corporate campus in Johnston, Rhode Island, that is expected to complete in 2018.
But Superman’s office potential is not over.
Paolino said there is a demand for more office space due to many of the city’s Class-B buildings getting converted into housing. Durkee added there are potentially two active companies looking to take over half the building, but the project still requires government funds.
“The only thing you have there right now is pigeons,” Paolino said. “If the state or city has to put out an incentive package to fill it, do it.”