Plan to develop nursing school, offices on Providence riverfront faces obstacles
BY PAUL GRIMALDI
Journal Staff Writer
PROVIDENCE — The plan to spur development in the Jewelry District by making room for college classrooms and academic offices along the Providence River must resolve little-discussed utility and environmental issues before the proposal for the former industrial sites can move forward.
The private developer and his institutional partners have to work with National Grid to move a substation and to bury power lines on the site of the decommissioned South Street Power Station. They also have to deal with contaminated soil beneath Davol Square, the mixed-use property fashioned out of a former latex-product factory in the early 1980s.
Resolving those issues could delay groundbreaking for the project, scheduled for 2014, and occupancy, planned for 2016.
The $206-million project for the vacant power station and the adjacent Davol Square is a collaborative effort among the University of Rhode Island, Rhode Island College and Brown University.
The plan is to convert the power station into classrooms for a joint URI-RIC nursing education program and Brown offices, erect an apartment building for students on what is now the Davol Square parking lot and build a parking garage across from the square on the south side of Point Street.
The trio is working on the project with Connecticut-based developer Commonwealth Ventures, headed by Brown graduate Rich Galvin.
The city and the state have roles in the proposal as well.
Financing calls for an undetermined financial contribution from the city and capitalizing on approximately $28 million in state historic-building tax credits attached to the Dynamo House project — the name given to an earlier plan to convert the power station into a mixed-use property.
“My goal is to move this forward so that people are excited about being part of it but still feel they’re doing the right thing for their constituents,” Galvin said.
To meet their announced timeline, coalition partners will have to negotiate with National Grid, the utility company that operates a substation attached to the power station.
Galvin said he’s talked with senior executives at the utility company about the project but did not provide their names.
National Grid spokesman David Graves said the company was unaware of the plan until it was announced.
“I don’t think anyone came to us before that announcement,” Graves said.
National Grid equipment is housed inside a four-story building attached to the north side of the decommissioned power station as well as outside the two buildings, where transmission lines along the river carry 115,000 volts of electricity.
Moving the substation and burying the lines are critical to the project, a Brown official told members of the Jewelry District Association at the group’s July meeting. The building covers about half of the windows on that side of the old station, blocking light and cutting off views.
“It’s pretty close to a must for us,” said Russell C. Carey, executive vice president for planning and policy at Brown.
Graves said moving a substation is a lengthy process.
“We cannot take a critical piece of equipment offline,” Graves said. “We’re talking about a period of years before we could come up with a resolution.”
The expense of burying the lines is included in the project’s $206-million estimated cost, Galvin said.
As for the cost of moving the substation, Galvin said, “We believe that’s in their [National Grid’s] mid-term capital plan.”
Moving the substation and the power lines are two visible technical aspects of the project. The unseen aspects could be just as problematic.
The soil of the adjoining properties — one that housed a power-generating plant and the other a latex-product factory — contain traces of various toxins, according to the state Department of Environmental Management.
The power station at one time produced enough electricity to meet the needs of approximately one-quarter of the state’s population.
Federal and state records show PCB-laden electrical transformers and sludge-filled drums were stored at the power plant before the material was shipped off for disposal in Massachusetts.
The previous developer, Struever Bros., was in the process of cleaning up contamination inside the power station when it shut down the project.
“So the site remains as an open remediation project,” according to Gail Mastrati, a DEM spokeswoman. “The issues were primarily petroleum staining, inorganic compounds [lead and arsenic] in some site soils and mercury contamination in the basement of the building.”
The mercury contamination was removed and shipped away as hazardous waste in 2007 and 2008, she said.
According to DEM, the results of environmental surveys of the substation land done by the utility company led to the prohibition of residential use there. A separate restriction prohibits living quarters on the first floor of the power station.
As for the power station site, Galvin said, “A lot of the work they did was environmental remediation work. For the most part, it’s a clean site.”
Davol Inc. was founded in Providence in 1874 and became a major national manufacturer of rubber products, notably hot water bottles and nipples for baby bottles.
The factory once belonging to Davol was converted into mixed-use buildings in the early 1980s, housed a jewelry trade mart and tavern in the late 1990s and is now home to an amalgam of Brown University offices, business support organizations and start-up companies.
Trace amounts of various chemicals were found on the Davol Square site during early site surveys, much of which seemed to be dealt with during its reconstruction. The U.S. Environmental Protection Agency in 1995 ruled that no further remedial action was required.
Environmental surveys in the late 1990s discovered two underground oil storage tanks; one was removed and another was collapsed and filled, according to DEM records.
Still, DEM ruled that the soil underneath the property was best left undisturbed. The reason that vegetation on the property is placed in planters and the remainder of the property is covered with brick-and-stone walkways and asphalt is “to provide a barrier to human exposure to onsite soils,” according to DEM records. Workers digging into the Davol Square site will be required to wear gloves and eyewear and wash their hands prior to eating or leaving the site. The site will have to be watered down to control dust, according to a draft soil management plan on file with the DEM. Soil left over from any excavation cannot be used on residential properties.
“Providing the site can be closed out, we see no impediment to future resident or commercial use of this site,” Mastrati said in an email to The Journal.
The developer said his company will do more environmental testing at Davol Square, if necessary.
“It’s not something we’re concerned about,” Galvin said.
The nursing-school project would be financed by about $28 million in existing state tax credits on the power station, $26 million in federal historic tax credits, $137 million in private equity and debt, Galvin said. Commonwealth is forming a new venture with Baltimore-based Beatty Development, whose affiliates control the building.
Also figured into Galvin’s financial estimates is a $16-million contribution from the City of Providence for a planned 600-car parking garage across Point Street from Davol Square.
Governor Chafee last week blocked an avenue the city may have used to construct that garage when he vetoed a bill that would have expanded the powers of the Providence Redevelopment Agency. The bill would have given the agency the ability to construct new buildings on property it acquired by eminent domain or other means.
City officials said the bill, introduced late in the General Assembly session, was not introduced with any specific project in mind. Legislators did not try to override the governor’s veto.
When Chafee signed into law the new state budget, he reinstated a state historic tax-credit program for commercial redevelopment projects. The budget includes $34.5 million in tax credits for new proposals that had been set aside for previously abandoned projects.
Under the new program, up to 25 percent of “qualified rehabilitation expenditures” — money spent restoring a certified historic structure — may be issued as a tax credit not to exceed $5 million per project.
The limits will make it difficult for Galvin’s project to qualify for additional credits, according to Ted Sanderson, executive director of the Rhode Island Historical Preservation & Heritage Commission.
The state will have to contribute to the project’s financing in another way for the development to move forward, in the form of lease payments for the space URI and RIC will use for the nursing education program. The leases for URI and RIC will need approval from the Rhode Island State Properties Committee and the General Assembly.
The education program proposal is the sole agenda item Wednesday for a meeting of the Governor’s Health Sciences Task Force.
Task force members will discuss a plan for URI and RIC, together, to lease about half — roughly 120,000 square feet of space — of the hulking building at 360 Eddy St. for use by their respective nursing programs. Brown would lease about the same amount of space for unspecified administrative use, according to a Brown statement.
The proposal includes construction of apartments for 296 students at Davol Square and the parking garage.
There would be 15,000 square feet of space on the ground floor of the new building for shops and restaurants and 20,000 square feet for other business rentals.