STATE
PROPERTIES COMMITTEE MEETING
TUESDAY, JANUARY 6, 2009
The meeting of the State
Properties Committee was called to order at 10:00 a.m. by Chairman Kevin M.
Flynn. Other members present were
Richard Woolley representing the Rhode Island Department of Attorney General;
Robert Griffith representing the Rhode Island Department of Administration;
John A. Pagliarini, Jr.,
and Robert W. Kay, Public
Members and Xaykham Khamsyvoravong representing the Rhode Island Office of the
General Treasurer, Ex-officio Member.
Others in attendance were Anthony Paolantonio from the Rhode Island
House of Representatives; Yue Wang from the Rhode Island Office of the General
Treasurer; Lisa Primiano and Terri Bisson from the Rhode Island Department of
Environmental Management; Daniel Clarke, Marc Malkasian, David Coppotelli from
the Rhode Island Department of Transportation; Michael D. Mitchell and John
Ryan from the Rhode Island Department of Administration; Senator Rhoda E. Perry
and Representative David Segal from the Rhode Island House of Representatives;
Seth Yurdin, Councilman, from the City of Providence; members of Friends of
India Point Park; members of the College Hill Neighbors Association; members of
the Fox Point Neighborhood Association; members of the Blackstone Parks Conservancy;
members of the Providence Preservation Society; members of the Summit
Neighborhood Association.
ITEM
A – Department of Environmental Management – A request was made for approval to
utilize the most recent federal Housing and Urban Development (HUD) data to
determine fair market rent for the residential/caretaker properties leased by
the State of Rhode Island. Ms. Primiano stated that the Department of
Environmental Management currently manages thirteen residential leases. Ms. Primiano indicated that the Department of
Environmental Management hires professional appraisers to conduct appraisals to
determine the rental value of each of the residential properties as they become
vacant. Ms. Primiano stated that the
Department of Environmental Management has previously utilized the HUD fair
market rents values as a base and then would make adjustments to said amount after
considering the duties and responsibilities of the tenants residing in said
domiciles. Ms. Primiano indicated that most
of these houses are within the boundaries of State management areas or State
parks. Each appraisal costs between
$300.00 and $500.00 depending on whether it is a new appraisal or an update of
an existing appraisal. Said fees are
paid from the Department of Environmental Management’s operating budget; however,
the rental fee payments are allocated to the General Fund. Ms. Primiano noted that these appraisals cost
the Department of Environmental Management approximately $2,000.00 per
year. Ms. Primiano indicated that the
Department of Environmental Management is presently in the process of stream
lining its lease process. Ms. Primiano
indicated that Ms. Bisson has taken over the administration of all of the
Department’s leases including the properties located at the Port of Galilee
as well as parks and management areas.
Ms. Primiano indicted that Ms. Bisson has set up a data base and asked
Ms. Bisson to provide the Committee with a brief summary regarding the
Department’s lease process. Ms. Bisson
explained that the Department’s goal is to make the lease process more
efficient. Ms. Bisson reiterated that
she has developed a new data base, which allows the Department to automatically
track leases and the expiration dates of insurance certificates. Ms. Primiano stated that the Department of
Environmental Management wishes to reduce its appraisal costs and minimize the
amount of time expended by staff hiring these external appraisers, reviewing
the appraisals and preparing lease documents.
Ms. Primiano indicated that she and Ms. Bisson have researched the HUD’s
process for determining rental values and consulted with local appraisers who
indicate that the HUD process does in fact accurately reflect fair market
rental values. Ms. Primiano indicated
that the purpose of setting the rental values is to encourage property owners
to rent to people of low to moderate income.
Ms. Primiano indicated that HUD researches census data and engages the
services of some of the same appraisers utilized by the Department of
Environmental Management to determine its rental values. Therefore, in view of the recent reduction in
staff as well as in funding, the Department of Environmental Management wishes
to once again utilize the HUD data in an effort to expedite the appraisal
process and minimize the amount of time expended by staff relative to the
leasing of these residential properties.
Chairman Flynn indicated that it is his understanding that the
Department of Environmental Management initially stopped its use of the HUD
data because the State Properties Committee believed that said data did not
accurately reflect fair market rental values.
However, Chairman Flynn noted that the material provided in the
Department’s submission package demonstrates that the rental values established
using the HUD data are in fact very consistent with the values determined by fee
appraisers. Ms. Primiano indicated that
the Committee did not necessarily deem the HUD data inaccurate; but questioned
how State could be certain that said data did accurately reflect fair market
rental values. Ms. Primiano explained
that as a result of the Department’s professional appraisal process, it was
able to confirm that the values determined utilizing the HUD data were
consistent with the values established via the fee appraisals. Ms. Primiano indicated that said appraisals
are conducted on an annual basis by HUD.
Ms. Primiano provided the Committee with a copy of the introduction from
the Federal Registry, which explains the HUD process and indicated that after
reviewing said information, the Department concluded that it is an accurate
assessment of fair market rental rates.
Therefore, the Department of Environmental Management is seeking
approval to once again utilize the HUD process to determine rental values for
said residential properties. Mr.
Griffith indicated that in addition to questioning the accuracy of the HUD
process, the Committee also suggested that some of the downward adjustment made
by the Department in consideration of the duties and responsibilities of the
caretakers may have been too generous.
Ms. Primiano indicated that Department of Environmental Management staff
met with Jerome Williams and other members of the Administration staff and eliminated
many of those deductions due to workers’ compensation and employment and labor
issues. Chairman Flynn asked how often
the HUD rental data is updated and what the average term of the Department’s leases
is. Ms. Primiano indicated that the HUD
rental values are updated on an annual basis and the average term of the Department’s
leases is three (3) years. Mr.
Pagliarini asked if the HUD rental fees are based on the income qualifications
of the tenant. Ms. Primiano stated that
the HUD rental fee is not based on the income of the tenant. Ms. Primiano indicated that rental values are
bases upon a market analysis conducted by the federal government. A motion was to approve by Mr. Pagliarini and
seconded by Mr. Kay.
Passed
Unanimously
ITEM B – Department of
Transportation – A request was made for approval of and signatures on a Consent
to Assignment of License Agreement to allow the existing License by and between
the Department of Transportation and Commodore Properties, LLC to Omni Combined
W.E., LLC. Mr. Pagliarini recused himself
from voting relative to this item as the applicant is his law firm’s
landlord. Mr. Malkasian explained that
the current License Agreement is between Commodore Properties, LLC and the
Department of Transportation. The
Department is before the Committee seeking approval to assign said License
Agreement to Omni Combined W.E., LLC.
Mr. Malkasian indicated that the License Agreement is for use of 6,000
square feet of land located on West
Exchange Street in the City of Providence.
Mr. Coppotelli provided an aerial photograph of the subject property for
the Committee’s review. Mr. Malkasian
indicated that the rental fee for said property $1,350.00 per month and that said
fee will remain the same as it was recently increased in September of 2007. The fee will be re-evaluated by the
Department in 2010. Mr. Malkasian
explained that the License Agreement contains a provision, which allows the
Licensee to trigger a five (5) year extension of the License Agreement on April
1, 2009. Mr. Malkasian stated that Omni
Combined W.E., LLC’s legal counsel has indicated that Omni will in fact
exercise said provision. Mr. Malkasian
noted that Omni Combined W.E., LLC has provided an insurance certificate, a
certification of authority and a certification of disclosure to the State
Properties Committee. A motion was made
to approve by Mr. Woolley and seconded by Mr. Griffith. The motion passed with four (4) votes “Aye”
and one recusal.
Four
(4) Votes “Aye”
Mr.
Woolley
Mr.
Kay
Mr.
Griffith
Chairman
Flynn
One
(1) Recusal
Mr.
Pagliarini
ITEM
C – Department of Transportation – A request was made for approval to dispose
of approximately 73,346 square feet of land and improvements located at 25 India Street in
the City of Providence
via a public solicitation. Mr. Clarke
noted that the subject property is the former “BootLegger’s” property. Mr. Clarke provided the Committee with a
brief history of said property and provided a site map of the subject property
for the Committee’s review. Mr. Clarke
noted that in 2000, the Department of Transportation purchased property
consisting of 130,094, square feet of land for a purchase price of $4.7 million
dollars for use in the I-195 Project.
Mr. Clarke noted that the Department has constructed roads on 55,000
square feet of said property; leaving 73,346 square feet available for
sale. Mr. Clarke explained that in April
of 2008, the Department of Transportation commissioned two independent fee
appraisals of the subject property, which were reconciled with the Department
of Transportation review staff. Mr.
Clarke indicated that the Department is seeking conceptual approval to issue an
invitation of bids for a public auction to dispose of the subject
property. Mr. Clarke stated that a
minimum bid in the amount of 3.5 million dollars has been established. Mr. Clarke indicated that the subject
property is zoned a W-2 District. In
accordance with the CRMC permits granted in 1990, three (3) easements for
public access to the property remain in full force and effect. Mr. Clarke indicated that the Department of
Transportation originally appeared before the State Properties Committee in
March 2008, and agreed to delay any sale activity on this parcel until the City
of Providence had
conducted a charrette on future land uses within the area. Mr. Clarke stated that the Department of
Transportation has also honored the building moratorium in the area. Mr. Clarke indicated the subject property has
been deemed surplus to the needs of the Department of Transportation, it does
not require any type of remediation or require the building of any roads prior
to being placed on the market for sale.
Mr. Clarke stated that the property was purchased with federal funds
under the condition that it be utilized for construction and staging purposes
in connection with the I-195 Project.
Mr. Clarke explained the contract between the Federal Highway
Administration and the Department also obligated the Department to place any
remaining property on the market for sale once the property was no longer
needed. Mr. Clarke indicated that the
revenue realized from the sale of the property would be returned to the Federal
Highway Administration for the completion of the I-195 Project. Chairman Flynn asked Mr. Mitchell to explain
the State of Rhode Island’s
obligation to the Federal Highway Administration relative to property acquired
for highway purposes, but is no longer needed for highway purposes. Mr. Mitchell indicated that the Department
did not require all of the property purchased for highway use; however, because
the severance damages associated with the property were so great, the
Department felt compelled to purchase the property in its entirety. Mr. Mitchell indicated that there is a
specific agreement between the Department of Transportation and the Federal
Highway Administration which stipulates that when the subject property is no
longer needed for highway purposes, it shall be sold at fair market value and
the proceeds from said sale would be applied to the I-195 Project. Therefore, the Department of Transportation
is under a binding obligation to sell the remaining property as soon as
possible. Chairman Flynn indicated that
in March 2008, the Planning Director of the City of Providence forwarded a letter to the State
Properties Committee requesting that the Committee delay action relative to the
subject property until the charrette process was completed. It is Chairman Flynn’s understanding that the
charette process has been completed; however, he does not believe that any
zoning recommendations have been contemplated.
Mr. Clarke indicated that he, Mr. Mitchell and Mr. Ryan met with the
Director of Planning for the City of Providence
on several occasions, most recently on December 2, 2008. Mr. Clarke indicated that during the meeting,
the City of Providence
indicated it was anxious to have this property placed back on the tax roll and
was happy that the property would be sold as it has become somewhat of an
eyesore. Chairman Flynn indicated that
he has also notified the City of Providence
on several occasions over the past couple of weeks that this matter would be
placed on the State Properties Committee agenda in the near future. Mr. Mitchell indicated that the subject
property would be sold via a public auction.
Chairman Flynn asked Mr. Mitchell to explain exactly what a public
auction is for the benefits of those present who may not know. Mr. Mitchell explained that the Department of
Transportation will advertise that it intends to place the subject property on
the market for sale and will attempt to generate public interest in the
property. Mr. Mitchell explained that
the former owner of the property has a statutory right to purchase the property
at the highest bid amount. If the
former owner does not choose to exercise this right, the City also has a
statutory right to purchase the property at the highest bid amount. Chairman Flynn asked if the subject property
has been offered to the various State agencies at this point in time. Mr. Clarke indicated that the surplus package
was circulated to the other State agencies and that no comments or objections
were received. Mr. Pagliarini noted that
when the Department appeared before the Committee in March 2008, the Committee
indicated that it would not grant the Department’s request for approval to sell
any of the property involved with the I-195 Project until such time as a
comprehensive plan was submitted to the State Properties Committee, which
illustrated the State’s intent relative to said land. Mr. Pagliarini asked whether said master plan
has been completed. Mr. Clarke indicated
that the plan is in its final stages; however, it has not been completed at this
time. Mr. Clarke explained that the
Department’s marketing plan will identify how all the small bits and pieces of
the former I-195 will be assembled into a logical format; however, the
Departments of Transportation considers the subject property a “stand alone”
parcel as it does not require the building of any new roads, the installation
of utilities or assemblage to any other parcel of land to be placed on the
market. Mr. Pagliarini noted that the
subject parcel’s value may be increased depending on the zoning designation of
the remaining acreage. Mr. Mitchell
stated that Mr. Pagliarini’s comment may not be entirely accurate as the
property was acquired specifically for staging for highway construction; it was
never part of the original I-195. Unlike the other remaining parcels, the
subject parcel is a stand alone parcel of land.
Mr. Pagliarini explained that if a desirable plan is implemented
relative to the uses of other remaining parcels; the subject property may
become even more valuable based upon the other uses. Mr. Mitchell indicated that the money
necessary to pay for the demolition of the old highway infrastructure, for the
marketing study and for everything else that needs to be done to complete the
project has to come from somewhere. Mr.
Mitchell stated that the subject property has been deemed surplus to the Department’s
needs and the sooner it can begin marketing this properties as well as other
like it, the sooner the Department can obtain the federal matching funds and
keep the I-195 Project moving forward.
Chairman Flynn asked what the status of the marketing study is. Mr. Clarke indicated that he believes the
marketing study will be completed in January 2009. Chairman Flynn asked Mr. Clarke how the
process will proceed if the Committee were to grant the Department’s request
for conceptual approval to sell the subject property. Mr. Clarke explained that the Department
would develop an invitation to bid and upon its completion, said invitation to
bid would be advertised in an attempt to reach out to as many potentially interested
parties as possible. The advertisement
will run for approximately one (1) month and then a pre-bid conference will be
scheduled to allow interested parties to view the site and for the Department
to answer any questions they may have.
Once that is done, the Department of Transportation will accept bids in
an open forum and subsequently return to the State Properties Committee with
the results of the request for proposals.
At that time, the Committee will make its recommendation regarding the sale
of the property. Following that process,
the Department will notify the former owner of its intent to sell the
property. The former owner has thirty
days to notify the Department if it intends to exercise its statutory right of
first refusal to purchase the land. If
the former owner does not wish to purchase the property, the Department will
offer it to the City of Providence. If the City of Providence chooses not to exercise its right
to purchase the property, the Department will prepare the final documents and
return to the Committee for final approval of the same. Chairman Flynn asked if the Committee will be
allowed to review the request for proposals prior to its being advertised. Mr. Clarke indicated that the Department
would be more than happy to provide Committee with the request for proposals
for its review. Mr. Pagliarini noted
that the current zoning of the subject property is W-2; however, the City has
not come to a final decision regarding whether said zoning will be changed. Mr. Clarke stated that Mr. Deller indicated
that the City does not intend to change the zoning. Mr. Pagliarini recommended that the
Department have Mr. Deller put that in writing to protect the Department in the
event the City changes the zoning subsequent to the sale of the property. Mr. Pagliarini asked what the water rights
are and whether the docks can be expanded.
Mr. Clarke indicated that it is his understanding the dock cannot be
expanded because in 1990, the CRMC granted permits, which stipulated the allowable
square footage of the docks. Mr.
Mitchell added that when the Department of Transportation began the process of
acquiring this property for highway purposes, the Army Corp. of Engineers had
the Department remove some docks because they extended out into the channel too
far and it is his understanding that the docks cannot be extended any
further. Mr. Woolley asked if the
Department of Transportation has taken the advisory report of Kevin Nelson of
the Statewide Planning Program into consideration relative to this property
including the possibility of a marine terminal at the site. Mr. Clarke indicated that the Department did
review Mr. Nelson’s comments; however, it is the Department of Transportation’s
obligation to sell the property to continue to finance the I-195 Project. Mr. Woolley asked if the Department has had
any discussions with the Federal Highway Administration regarding the
possibility of the property having an alternate use. Mr. Mitchell indicated that Michael Butler of
the Federal Highway Administration is adamant that the Department sell the
subject property and the proceeds from said sale be used to reimburse the
federal government. Mr. Woolley asked if
there is anything in writing concerning the Federal Highways Administration’s
position relative to the subject property.
Mr. Mitchell indicated that Mr. Butler has attended several City Council
meetings regarding the rezoning of the subject property and stated adamantly
that the property should be sold. Mr.
Griffith asked what the current use of the property is. Mr. Mitchell indicated
that the property is currently vacant.
Mr. Mitchell indicated that it is certainly not in the best interest of
the State of Rhode Island to own a vacant derelict building as such properties
create a serious liability for the State.
Therefore, the sooner the State sells the property the better. Mr. Khamsyvoravong
asked if the original financing plan for the project mentioned the State’s
obligation to sell the property to repay federal funds in the bond disclosure
documents. Mr. Clarke indicated he was
unsure whether the State’s obligation to sell the property was specifically
mentioned in the bond disclosure documents.
Mr. Griffith noted that Mr. Nelson’s advisory report recommends that an
area of 25 feet shall be allocated for public access and that said area should
be substantially landscaped. Mr.
Griffith asked whether the request for proposals will include this
condition. Mr. Clarke stated that there
is a public access agreement with the City of Providence in place together with two (2)
CRMC permits in place for a pedestrian walkway along the shoreline and public
access from India Street
to the marina area. Mr. Clarke indicated
that said agreements will be referenced in the request for proposals. Mr. Clarke indicated that in accordance with
the Department’s most recent discussions with CRMC, the rights and obligation
of those permits are still in full force and effect. Given the current market conditions, Mr.
Woolley questioned the Department’s rush to sell the subject property. Mr. Clarke stated that the Department has no
way of knowing if or when the current market conditions will improve and as the
Department does not have the funds necessary to maintain a derelict structure,
it believes this is as good a time as any to sell the subject property. Mr. Pagliarini asked if the Department has
considered demolishing the building. Mr.
Clarke indicated that the Department has considered demolishing the building. However, as the cost to demolish the building
is approximately $50,000, and as the Department was unsure whether demolition
of the building would increase or decrease the value to the property, the
Department chose to sell the property “as is.”
Mr. Mitchell explained that marina property is extremely difficult to
secure and control as the property can be accessed from the land and/or
water. The Department does not have the
resources to monitor the property 24 hours per day; therefore, the potential
for liability certainly exists. Chairman
Flynn expressed his concerns regarding individuals seeking shelter inside the
building. Chairman Flynn stated not that
long ago six (6) firefighters lost their lives while trying to save the lives
of some homeless individuals who had unintentionally set a vacant building on
fire. Mr. Griffith asked if the State
has any indication from the Providence Police regarding response calls to that
building or area. Mr. Clarke indicated
that the property is currently occupied by construction crews and trailers;
however, they will be removed in the very near future. Mr. Pagliarini asked if there is any
indication of illegal entry or vandalism.
Mr. Clarke indicated that the building has deteriorated quite a bit
since its purchase in 2000, and is also covered in graffiti. Chairman Flynn noted that many individuals
present wish address the Committee regarding the subject property. Chairman Flynn suggested that Mr. Clarke and
Mr. Mitchell stay to help address any concerns and/or questions. Senator Rhoda Perry thanked Chairman Flynn
for the opportunity to speak, for his cooperation in returning telephones calls
and for readily answering her questions regarding the subject property. Senator Perry stated that the subject
property provides the most beautiful, unobstructed view of the Narragansett Bay that the State has left. Senator Perry indicated that she feels
strongly that the subject property should remain in the public domain. Senator Perry stated that many neighborhood
organizations are here today and wish express their concerns and their positions
regarding the future of the subject property.
Senator Perry indicated that she was glad to hear during today’s
discussion that there may be an alternative to placing this property on the
market for sale. Senator Perry stated
that there are ways to raise the funds needed to purchase the property within
the community itself. Senator Perry
stated that she and many of the members of the various neighborhood
organizations present believe that this is a “now or never” situation. Senator Perry indicated that now is the time
to preserve the head of the Narragansett Bay
and to allow the public to enjoy an unobstructed view of its beauty. Senator Perry commended the Department of
Transportation for providing an informative overview regarding the subject property,
and encouraged the Department to be open to suggested alternatives regarding
the subject property. Senator Perry
stated that it is her understanding that the role of the State Properties
Committee is to consider the requests that come before it from the view point
of the entire state and all of the people of the State of Rhode Island rather than from a narrow
perspective considering only the needs of a State agency. Senator Perry recommended that the State
Properties Committee refrain from approving the Department of Transportations
request until such time as it receives more information from the Department and
the City of Providence. Senator Perry thanked the Committee for its
willingness to hear her point of view.
Chairman Flynn stated that it is his understanding that when the Federal
Highway Administration purchases property to assist states in highway projects,
it does not do so with the intent to provide open space. The Federal Highway Administration supports
the construction of transportation projects with the clear understanding that
the some or all of the funds expended will be reimbursed. Chairman Flynn asked Senator Perry how the
State would raise the necessary funds to reimburse the Federal Highway
Administration if it is not generated by a sale of the subject property. Senator Perry indicated that there is a
plethora of ways to raise money and she urged the Committee to allow the
members of the various organizations present today to speak and to share
specific data relative to the names of foundations and the methods they
utilized to raise funds. Senator Perry
clarified that she is not suggesting State resources be utilized to reimburse
the federal funds. Mr. Pagliarini
commented that the matter before the Committee is a request for conceptual
approval to solicit bids; it is not a request to approve a certain use. Mr. Pagliarini explained that anyone of the
foundations represented here today could bid on the property during the
invitation to bid process.
Representative Segal echoed the comments of Senator Perry relative to
the importance preserving the subject property for public use. Representative Segal noted that the subject
property is a rare point of urban access to the waterfront. Representative Segal expressed his concern regarding
the timing of the sale. Representative
Segal noted that the Department is relying on an appraisal conducted in early
2008, and expects that the value of the property has decreased by 10 or 20
percent. Representative Segal also
indicated that the State of Rhode
Island is on the verge of receiving a grand economic
stimulus package from the federal government for the funding of highway
construction and maintenance. Therefore,
Representative Segal suggested that it would be sensible for the State to
refrain from selling the subject property and removing it from the public
domain for generations to come until such time as the intentions of the new
President and Congress become clear.
Chairman Flynn asked if Representative Segal belief is that the federal
stimulus package may provide funds that would somehow negate the Federal
Highway Administration’s expressed desire to have the subject property
sold. Representative Segal clarified
that although he does not have inside information as to what is contained in
the federal stimulus package proposals; it is expected that one of the primary
facets of the package will be a large sum of funding for highway construction
and maintenance. Therefore, it would
behoove the State to hold off on the disposing of this asset until further
information is received. Mr.
Khamsyvoravong asked Councilman Yurdin if the City of Providence has submitted a list of priorities
to the federal government for federal funds in the event they are released in
the economic stimulus and, if so, was the subject property included as part of
said list. Councilman Yurdin indicated that the Mayor’s office did submitt a
list of priorities; however, he does not believe this property is included in
that list. Councilman Yurdin stated that
he understands that at least part of the urgency to dispose of the this
property is to generate revenue to reimburse federal funds; however, if there
is an influx of new money that could be utilized to offset that obligation, the
2 or 3 million dollars generated from the sale of this property may seem much
less significant. Chairman Flynn
indicated that he felt it is relatively safe in assuming that many of the
people present do not want to see this property developed at all. However, the appraised value of the property
is based upon the location and zoning of the property; therefore, the value of
the property as a developable site is part of what it makes it worth $3.5
million dollars according to the appraisal.
Chairman Flynn indicated that the property could be developed for
mixed-use as the State has done in many other cases. Representative Segal indicated that he
believes the majority of the people present today would like to see the site
developed for a variety of uses that maintain the public access. Representative Segal indicated that these
organizations do not want to plant grass, trees and put benches on the subject
property. They would like the property
to be developed as a robust public use that would require some structures. Councilman Yurdin indicated that the subject
property is immediately adjacent to India
Point Park,
which is a multi-acre park that wraps around the head of the Narragansett
Bay. The I-195-Project has
improved the park in terms of public access and available parking. Councilman Yurdin indicated that public
access to the water and adequate protection for the adjacent park are among the
main concerns of the public. Access to
the water is very important to the public as it is very limited in the City and
it certainly increases the quality of life and allows the public to interact
with nature. Mr. Pagliarini explained
that the State Properties Committee is charged with either giving or denying
permission for the Department of Transportation to solicit bids for the sale of
the property. Mr. Pagliarini indicated
that he very much believes that the fewer stipulations and restrictions
included in a request for proposals, the better, as restrictions tend to
diminish the value of the property. Mr.
Pagliarini explained that when an agency issues a request for proposals, it can
strongly recommend the wishes of the public, but to make them concrete
requirements, only diminishes the value of the property. Mr. Pagliarini indicated that all of the comments
and concerns raised here today regarding use of the property are valid, but he
feels the correct venue for them is the Providence Planning Board. Mr. Pagliarini stated that he feels his
function as a public member of the State Properties Committee is to raise as
much revenue possible for the State of Rhode
Island, while balancing the public’s interest. Chairman Flynn asked if there were any other
comments from elected officials, before he invited members of the public to
address the State Properties Committee relative to this issue. Sarah Gleason, introduced herself as a member
of Friends of India Point Park and a longtime resident of Fox Point. It is Ms. Gleason’s understanding that the
issue of zoning regarding the subject property has not yet been decided. Ms. Gleason believes that proceeding with the
zoning process at this time creates the appearance of irregularity. Chairman Flynn stated that he does not agree
that there is an appearance of irregularity; however, he does believe that it
would behoove the Department of Transportation to obtain some definitive
language from the City of Providence
as to its intentions regard the zoning designation of the subject
property. Ms. Gleason indicated that
there have been many public meetings at which the wishes of the public have
been nearly universal in favor of changing the zoning of the subject
property. Chairman Flynn indicated that
as stated by Mr. Pagliarini, the rezoning of the property is an issue for the
City of Providence Planning Board,
not the State Properties Committee. Ms.
Gleason indicated that she understood that fact; however, she stated that is
appears that the Department of Transportation is being somewhat abrupt in
attempting to avoid said process.
Chairman Flynn stated that in all fairness to the Department of Transportation,
he does not believe that is the case.
Chairman Flynn explained that this matter was originally before the
State Properties Committee in March of 2008, and at the request of the City of Providence, both the State
Properties Committee and the Department of Transportation agreed to delay
taking any action relative to the subject property until the charrette process
was completed. Chairman Flynn further
explained that both the State Properties Committee and the Department of
Transportation have been in contact with the City of Providence.
The City was informed of the Department’s intention to bring this matter
before the State Properties Committee in early December 2008. Chairman Flynn stated that if the City needed
more time for any reason, he is sure the Department of Transportation would
have readily agreed to give the City additional time. Having said that, Chairman Flynn indicated
that he certainly believes that it would be appropriate to obtain some definitive
language from the City of Providence
regarding its intentions relative to the zoning of the subject property. However, Chairman Flynn reiterated that he
does not agree that there is an appearance of irregularity. Ms. Bilodeau introduced herself as the
Co-Chairman of the Head of the Bay Gateway Committee, which is a group of
citizens concerned about the future of this site. Ms. Bilodeau indicated that the apparent
urgency to dispose of the subject property as quickly as possible concerns her. Ms. Bilodeau indicated that after listening to
the discussion this morning, she questions whether there is a definitive
deadline for the repayment of funds to the federal government. Mr. Clarke indicated that the obligation to
repay the funds is part of the financing plan to fund the ongoing demolition of
the old highway structure and the complete the remediation of the
property. Mr. Clarke noted that although
he cannot say there is an absolute deadline, the Department is clearly under an
obligation to reimburse the federal government from the proceeds of the sale of
the property. Ms. Bilodeau asked Mr.
Clarke to clarify whether the reimbursed funds are earmarked specifically for
the I-195 Project. Mr. Clarke stated
that the funds to be reimbursed to the federal government are specifically
earmarked for the I-195 Project. Ms.
Bilodeau commented that it seems unusual to her that the funding for the I-195
Project would not already be in place without the $2 or $3 million dollars
generated from a sale of the subject property.
Mr. Clarke explained that when the financing plan was prepared, the
proceeds from the sale of the subject property were included in said plan in
anticipation of its sale. Ms. Bilodeau
stated that the purchase price of the subject property would have been a
totally unknown quantity, especially in view of the current economy. Mr. Clarke indicated that the proceeds from
the sale of the property were based upon the minimum required bid of $3.5
million dollars. Ms. Bilodeau noted that
said minimum bid was determined back in April of 2008, during a completely
different economic climate. Ms. Bilodeau
explained that she believes there is a responsibility on the part of public
officials to consider a more long-range value relative to the subject property. As the property is situated at the head of
the Narragansett Bay, it would be remiss to
disregard the property’s potential as a public attraction and miss the
opportunity to capitalize on the location of the property and create an
attraction that would draw the public to this site. Ms. Bilodeau indicated that a mere dollar
value does not take into consideration the long-term value to both the City of Providence and the State of Rhode Island. Ms. Bilodeau noted that she is especially
dismayed to hear that the City of Providence’s
primary consideration concerning the future of this site is to realize taxable
development. Ms. Bilodeau stated that
such an attitude is not reflective of the public’s wishes, which were clearly
expressed during the charrette process.
Ms. Bilodeau asked what the course of action is if the $3.5 million
dollar minimum bid is not met. Chairman
Flynn explained that if the minimum bid is not met, the Department of
Transportation is not required to sell the subject property. Ms. Biledeau asked if the property could in
fact be sold for an amount less than the minimum bid amount. Chairman Flynn indicated that such a decision
would be made at the discretion of the State Properties Committee. Chairman Flynn noted that in light of his
discussions with Ms. Painter of the City of Providence Planning Department, he
believes it is unfair to say that the City of Providence’s only interest is the taxable
development of the subject property. Ms.
Bilodeau strongly recommended that the State Properties Committee consider
placing some restrictions on the use of the property to require more public use
of the site than would ordinarily be incorporated in a request for
proposals. Chairman Flynn assured Ms.
Bilodeau that that is something both the Committee and the Department could
consider in the context of the request for proposals. Mr. Kamsyvoravong asked if there is a
representative from the City of Providence
that could address the State Properties Committee relative to its
position. Chairman Flynn indicated that
the City of Providence
did not send a representative to the meeting although the City was aware of the
inclusion of this item on today’s agenda.
William Touret introduced himself as a resident of Olive Street in the City of Providence and as
President of the College Hill Neighborhood Association. Mr. Touret stated that his organization also
supports a delay of a decision by this body in order to provide the
organizations present today to gather further information for the Committee’s
consideration. Mr. Touret indicated that
he understands that the driving force behind the Department of Transportation’s
desire to sell the subject property is the stated obligation to repay the
federal government for monies used in connection with the I-195 Project;
however, Mr. Touret noted that the one question that was not asked this morning
is what the State’s position would be with respect to the disposition of the
subject property if the federal government were willing to relieve the
Department of Transportation the obligation to repay said funds. Mr. Clarke indicated that the idea that the
proceeds from the sale of the subject property will be applied toward the
repayment of bonds is incorrect. Mr.
Clarke explained that said proceeds are allocated for the direct reimbursement
of funds for the actual payment of contractors who are presently building
roads, demolishing structures, resurfacing roads, installing utilities and
things of that nature for the construction of the I-195 Project. Mr. Touret stated that he appreciated Mr. Clarke’s
response; however, as previously stated, there is a reasonable expectation that
there will be very substantial infrastructure funds coming from the federal
government in a matter of months, if not weeks.
Mr. Touret stated that he is also troubled by the fact that the decision
to impose this, so called, obligation to repay funds is being made by a Federal
Highway Administrator, who Mr. Touret assumes will be replaced once the new
administration comes into office.
Chairman Flynn indicated that the State of Rhode Island has no way of knowing who will
be replaced once the new administration takes office. Mr. Touret indicated that the aforementioned
factors, coupled with the extraordinary nature this site and its long term
value, make this an extremely inappropriate time for the Committee to grant the
Department of Transportation’s request for conceptual approval to dispose of
the subject property. Mr. Touret
requested that the State Properties Committee refrain from taking any action
relative to the subject property at this time.
Mr. Griffith commented that he has not seen any indication that the
developing stimulus package will result in any forgiveness of state matching
requirements, nor does he anticipate a release of states from their obligation
to repay or appropriately reuse the 80% federally funded matches for
alternative purposes. Jonathan Howard
introduced himself as an officer of the Summit Neighborhood Association and a
business owner in the City of Providence. Mr. Howard stated that he cannot speak for
the members of the Summit Neighborhood Association as they did not have time to
specifically consider this issue; however, the Association has supported, in
general, the proposals of the Friends of India Point Park’s proposal to make
the head of the Narragansett Bay “Gateway”
from the former Shooter’s property and adjacent properties. Mr. Howard stated that as a taxpayer, he is
eager to see monies generated and properties put back on the tax roll; however,
he believes that needs to be accomplished in the context of a larger plan. If the State sells an isolated property at a
depressed point in the market for a small return, the State may very well be
shortchanging itself and the public. Mr.
Howard explained that he just recently returned from Chicago
where he was extremely impressed with what has been done to Lakeshore Drive and the Grant Park areas
of Chicago. Mr. Howard noted that 100 years ago people
had the vision to take private property on the waterfront and make it broadly
available with a mix of commercial but generally public purposes, a key transit
route and it increased the density and value of development behind that public
use enormously. Mr. Howard stated that
the same thing exists in Los Angeles where the
“Strand” extends for 30 miles through approximately one dozen sub-communities
of Los Angeles County and unleashed enormous private
value in the adjacent properties.
Therefore, Mr. Howard stated that he understands from today’s
discussion, that there is a master plan close to completion and he is unsure
whether the Committee needs to delay issuance of the request for proposals;
however, he believes the Committee should be very cautious about unleashing a
process that can not be stopped or rolled back in the event that the master
plan reveals an untapped or potential value during the master planning
process. Mr. Howard urged the State
Properties Committee to delay action, if possible, as he believes this is
clearly a bad time in terms of the market and further believes the potential of
unleashing more value in other properties through the master plan process is
enormously evident. Bob Schacht
introduced himself as a resident of Sheldon
Street and a former state official. Mr. Schacht explained to the members of the
State Properties Committee that their predecessors had the vision and concern
for the State’s welfare to play a critical role in the creation of India Point
Park. They so believed in the importance of
creating this public space at the head of the Narragansett
Bay that they contributed the then State Pier to the park. In addition to the donating the State Pier,
they also donated a 2.7 acre parcel of land to the City of Providence for the park. Mr. Schacht indicated that the Department of
Transportation provided the first pedestrian bridge. Mr. Schacht noted that the new pedestrian
bridge is a huge enhancement, which will continue to increase the public’s
interest in the area. Mr. Schacht explained
that the federal government also played a significant role in the creation of
the park as the Bureau of Outdoor Recreation matched the local funds two to
one, which enabled the State to purchase the remainder of the park from Penn
Central Railroad. Mr. Schacht explained
that a lot of things and people came together to serve the public’s interest in
the creation of India
Point Park. Mr. Schacht indicated that the present
circumstances represent a unique opportunity to further enhance this wonderful
development. Mr. Schacht noted that the
Committee’s predecessors fully appreciated the immediate and future benefits
that would be realized by the State and its people as a result of their
efforts. In closing, Mr. Schacht urged
the present Committee members to follow their predecessor’s example. David Riley introduced himself as the
Co-Chair of the Head of the Bay Gateway and Friends of India Point Park. Mr. Riley explained CRMC’s public easement
actually goes right down the middle of the subject property, which also happens
to be the continuation of Benefit
Street, which is one of the most historic streets
in the City of Providence. Mr. Riley noted that pursuant to his
interpretation of the 2005 Rhode Island Supreme Court Decision in the matter of
Newport Realty vs. State of Rhode
Island, which states that if a public way runs straight
to the water, it must continue to be a public.
Mr. Riley stated that there is a lot of emphasis on public use but also
by the organization represented today, but by CRMC and the Rhode Island Supreme
Court. Mr. Riley urged the Committee to
continue to delay taking any action relative to this matter until such time as
more information can be gathered and submitted for review. Mr. Riley stated that he spoke to Peter
Osborne yesterday, who is the Administrative Director for the Federal Highway
Administration in this region. Mr. Riley
explained that it is not accurate to say that the Federal Highway
Administration is adamant that the property be sold. It is Mr. Riley’s understanding, that if the
property is not sold then the Department of Transportation will have to make
some sort of reimbursement; however, Mr. Riley believes that it is misleading
to say that the Federal Highway Administration is adamant that the subject
property be sold. Chairman Flynn noted that
he had previously stated that if the property is not sold through the request
for proposals process, the federal government through some source needs to be
paid the value. Mr. Riley indicated that
there are sources from which this obligation could be satisfied. Additionally, the federal government is
talking about 30 billion dollars nationwide in highway infrastructures stimulus
funds, which could mean another $200 or $300 million dollars for the State of Rhode Island. Mr. Riley stated that the Blue Ribbon Panel
Report, which if the tolls and fees are implemented, would raise another $200
or $300 million dollars. Mr. Riley
stated that when you examine those amounts, it certainly dwarfs the 3.5 million
dollar figure being discussed today.
Mr. Riley stated that the Army Corp. of Engineers is slated to receive
$7 billion dollars and they also have an interest in flood plain
management. Mr. Riley noted that the
subject property is located in the velocity zone of the flood plain and is also
located at the bull’s eye of where hurricanes hit hardest in the City of Providence. Mr. Riley stated that the docks are presently
being used by the tugboat company and there is no sign of major vandalism to
the docks. Mr. Riley also noted that the
Department of Transportation under federal regulations has the authority to
gift land for less than fair market value if it is used for parks and
recreation and in fact has done so. Mr.
Riley stated that fairly recently the
Department of Transportation donated the 4 to 5 acres of land to the
Meeting Street School for athletics and gave waterfront property to the Town of
Jamestown for a ball field. Mr. Riley
indicated that he understands that because the subject property is part of the
I-195 Project, the federal agency has to be reimbursed; however, Mr. Riley noted
that on several occasions, the Department has donated land to municipalities
for parks and recreational use. Mr.
Riley indicated that the State of Rhode
Island has expended a billion dollars worth of public
works into the subject property, which includes the new highway, the CSO
Project and burying of power lines.
Therefore, Mr. Riley believes that to create a vibrant public
destination on the site would be totally appropriate in view of all of the
public funds that have gone into improving this area. Mr. Riley noted that there is a critical
difference between public access and public destination and stated that the
organization represented today are interested in a public destination not
merely public access. Mr. Riley provided
the copies of proposals for developing the site for public use for the
Committee’s review. Chairman Flynn stated that although he appreciates Mr.
Riley’s concerns, he reiterated that issues regarding the use of the property
should be brought before the Providence Planning Board not the State Properties
Committee. A member of the press asked
what the State’s plan of action would be if the City of Providence attempted to significantly
restrict the use of the property from the current W- 2 zoning. Hypothetically speaking, Mr. Mitchell
indicated that he believes the State would have legal recourse against the City
for inverse condemnation; however, he stated that no one wishes to purchase a
lawsuit. The same member of the press
stated that it is inaccurate to say that the State of Rhode Island does not
have a role in what is happening regarding the use of the subject property,
because if the City were to take certain actions unfavorable to the State, it
is the State’s discretion as to whether or not it brings a lawsuit and/or challenge
the zoning change. Chairman Flynn
clarified that any challenge would be based upon value of the property and any
potential loss to the State only; it would not be based on the City’s right to
zone or rezone its property. Mr.
Mitchell agreed and noted that said loss would include the loss of federal
matching funds. In response to Mr.
Pagliarini’s comment that his role as a Committee member is to obtain the
highest and best value for the State of Rhode Island while weighing the
interest of the public; Mr. Riley noted that the R.I.G.L. state that the State
Properties Committee has an obligation for the protection and improvement of
health, welfare and safety of the inhabitants of the State of Rhode
Island. Mr. Riley noted that there is also
a broader issue which is triggered by his concern about the location in
relation to the flooding. Lastly, Mr.
Riley indicated that Alex Krieger, a well known designer warned against what he
called “thin line development” on the waterfront. Mr. Riley explained that what this means is
if you place large buildings right on the shoreline, you not only cause
property values to decrease, but you obstruct views and make any city much less
attractive. George Born, Executive Director of the
Providence Preservation Society, indicated that the Society is concerned about
improving the quality of life in Providence
through enhancing to whole environment of Providence
including building and sites. Mr. Born
stated that there is a sense in the room that this is unique moment in history
for the City Providence as the public are extremely interested in the subject
property and at this moment in time, the property is publicly owned. Mr. Born noted that the fact that the State
owns the property makes it the perfect time for the various organizations here
today to weigh in on this matter. Mr. Born indicated that there are some
compelling reasons to delay action relative to this matter many of which have
been raised today as well as others. Mr.
Born noted that the Intermodel Surface Transportation Act of a decade and a
half ago, made monies available for the enhancements to transportation projects
and not just for the building of roads.
It included historic preservation, parks, planning as well as many other
uses. Mr. Born agreed that the subject
property can not be handed to the public; however, perhaps it is a good local
opportunity to ask whether our values can be taken into consideration during
this political moment. Mr. Born
reiterated that it is a terrible time for the real estate market and this
requests strikes him as penny wise and pound foolish. Mr. Born indicated that the fact that the
State needs the money now may not justify waiting; however, the subject
property strikes him as a property that is worth land banking and holding on to
for a more auspicious occasion. Mr. Born
thanked the Committee for its time. Mr.
Woolley indicated that one of the many appropriate comments that were made by
the Statewide Planning Program was that future use of the site as a marine
terminal should be considered prior to disposing of the property as
surplus. Mr. Woolley asked what, if any,
role the Department of Transportation has with respect to water transportation
as it relates to the close proximity of the subject property and Downtown
Providence. Mr. Clarke stated that he is
not at all familiar with what role, if any, the Department of Transportation
has relative to water transportation.
Mr. Woolley asked if the Department of Transportation was involved in
the Newport to Providence ferry. Mr. Clarke indicated he is not sure who is
responsible for water transportation.
Mr. Woolley noted that the subject property may be considered for a
marine terminal. Mr. Woolley indicated
that the State could have waterborne transportation connecting the head of the
Bay to the Intermodel Station in Warwick. Mr. Mitchell stated that the Intermodel
Station does not lend itself to that type of use; it is currently licensed as a
marina for very small boats not commercial watercraft. Chairman Flynn indicated that there is a
waterborne transportation plan which is part of the State’s guide plan and Mr.
Nelson’s comments are following up said plan which indicates that when
properties such as the subject property become available they should be
considered for their appropriateness to meet the goals of the waterborne
transportation plan. At some point in
time, the Department of Transportation will need to address that comment and
review the site and either agree that it would be an appropriate site, but the
State would still be faced with raising the money to repay the federal
government, or, if not, the Department of Transportation will have to indicate
that the site is not appropriate for future waterborne transportation. Mr. Woolley noted that as the marine terminal
would certainly be considered a new project, which may generate the resources
to purchase the property for a marine terminal.
Mr. Clarke indicated that the obligation to reimburse the federal
government was executed in 2000. It is
not a political event, it is a contract.
The economic stimulus package is geared toward new projects to put
people to work on projects that can be taken off the shelf and put on the
street within a period of six months.
Mr. Mitchell responded to some
of the comments made by the representatives of the various organizations
present today. Mr. Mitchell indicated
that the Department of Transportation is not in the business of land
speculation. The Department purchased
the subject property for a specific limited purpose with the understanding that
it would be disposed of when it was no longer needed. Mr. Mitchell stated that the Department of
Transportation does not have the authority to hold on to the property because
the real estate market may some day improve.
Mr. Mitchell clarified the fact that the Department of Transportation’s
proposal is to market the property for sale.
The Department is seeking to develop the property. The market will determine its highest and
best use. Mr. Mitchell indicated that
the public gathered here today has the option to raise funds and purchase the
subject property on the market. They
have the ability to petition the City of Providence
as to the future use of the property. It
is Mr. Mitchell’s opinion and experience that if the Committee refrains from
taking any action relative to the Department’s request to place the subject
property on the market for sale for two or three months, he is fairly certain
that at the expiration of that 2 or 3 month period, the public will once again
request that the sale be delayed with the hope that the market will improve or
the position of the federal government
will change; meanwhile the Department of Transportation will experience a
serious cash flow problem. Mr. Mitchell
indicated that the subject property is part of the cash flow problem. The property needs to be placed on the market
for sale to generate funds to be matched by the federal government in order to
finance the continuation of the I-195 Project and to remove the old highway
infrastructure, which will create more surplus property to be sold on the open
market. Mr. Woolley indicated that the
Attorney General wanted it known that he is opposed to the current proposal. The Attorney General believes that the
proposal is premature and that alternate public uses relative to this property
have not adequately examined. A motion
was made to deny the Department of Transportation’s request for conceptual
approval to dispose of the subject property by Mr. Pagliarini and seconded by
Mr. Woolley. Mr. Pagliarini explained
that in March of 2008, the Committee requested that the Department of
Transportation submit a master plan to the State Properties Committee for its
consideration prior to its return to the Committee for approval to dispose of the
subject property. Mr. Pagliarini
indicated that until said master plan is submitted for the Committee’s review
and consideration, he will not vote to approve any request to sell any portion
of the I-195 Project. Mr. Kamsyvoravong
stated that if the Committee intends to discuss intended uses of the subject
property, he believes it would be beneficial to the Committee to request that a
representative of for the City of Providence
be present to address any questions and concerns. Mr. Kamsyvoravong indicated that although the
City of Providence
was invited to attend today’s meeting, he is extremely disappointed that it did
not see fit to attend. Therefore, Mr.
Kamsyvorvong
requested that in the future, the City of Providence be
present. Mr. Griffith stated that the
discussing of the future use of property it is not the State Properties
Committee’s prerogative. Mr. Pagliarini
indicated that he does not believe it is in the Committee’s best interest to
market any specific property without knowing what the zoning designation. Mr. Pagliarini stated that he wants to know
what the zoning designations are on each of the parcel prior to executing a
deed. Mr. Pagliarini indicated that he
will not sign a deed for a building that is currently 75 feet tall only to
learn later that the zoning has been changed to allow a of building of 200 feet
and know that the State only received a fraction of the property’s total
value. Mr. Pagliarini stated that as the
subject property is the crown jewel of the 44 acres of land, he will not
approve a request to dispose of it until he knows what the intentions of the
City of Providence. Mr. Pagliarini agreed that it is imperative
that a representative of the City of Providence
be available to address any questions or concerns of the State Properties
Committee relative to the subject property and its future use. Chairman Flynn noted that in fairness to the
Department of Transportation, they did meet with the City of Providence and notify the City of their
intention to move forward. The City has
made to objection. Chairman Flynn
indicated that obtaining some definitive language from the City of Providence regarding the
zoning designation of the subject property would be beneficial. Chairman Flynn noted that said information should
be obtained during the development of the request for proposals in the event
the Committee chose to grant the Department’s request for conceptual approval
to dispose of the subject property.
Chairman Flynn indicated that in addition to obtaining said information
from the City of Providence, the Department of Transportation should to examine
the property relative to its suitability for use as a marine terminal, obtain a
letter from the Federal Highway Administration regarding its policy relative to
the reimbursement of funds for the subject property, develop the request for
proposals and submit the same to the Committee for its review if requested and
perhaps submit the completed the marketing plan to the Committee for its review
and consideration before any definitive action is taken by the State Properties
Committee. Chairman Flynn indicated that
it would be his recommendation to grant the Department’s request for conceptual
of approval subject to the aforementioned conditions. However, as a motion was made to deny the
Department’s request for conceptual approval, Chairman Flynn asked if there was
any further discussion. The motion
failed two (2) votes “Aye” to three (3) votes “Nay.”
Two
(2) Votes “Aye”
Mr.
Pagliarini
Mr.
Woolley
Three
(3) Votes “Nay”
Mr.
Kay
Mr.
Griffith
Chairman
Flynn
A
motion was made to grant the Department request for conceptual approval to
dispose of the subject property subject to the Department of Transportation (1)
obtaining the definitive language from the City of Providence relative to its
intentions regarding the zoning designation of the subject property; (2)
submitting the request for proposals to the State Properties Committee for its
review. (3) submitting the completed
Krieger Report to the State Properties Committee for its review and
consideration; (4) submitting a letter indicated that it has examined the
subject property regarding its suitability for use as a marine terminal; (5)
obtaining a letter from the Federal Highway Administration stating its policy
regarding the reimbursement of funds, which were contributed for the purchase
of subject property in connection with the I-195 Project by Mr. Griffith and
seconded by Mr. Kay. The motion passed
three (3) votes “Aye” to two (2) votes “Nay.”
Three(3)
Votes “Aye”
Mr.
Griffith
Mr.
Kay
Chairman
Flynn
Two (2) Votes “Nay”
Mr.
Pagliarini
Mr.
Woolley
ITEM D – Department of
Business Regulations – A request was made for approval of and signatures on a
Second Lease Amendment by and between Brown University and the State of Rhode
Island, though the Department of Business Regulations relative to the premises
located at 233 Richmond Street in the City of Providence.
Mr. Mitchell indicated that the Department of Business was a party to a
Lease Agreement with Brown University for the premises located at 233 Richmond Street
in the City of Providence. Mr.
Mitchell explained that said Lease Agreement was extended by agreement for a
period of three (3) years until 2010.
However, due to budgetary issues it became necessary for the Department
of Business Regulations to relocate to an alternative site at the Pastore Center.
The Lease Agreement required that the Department of Business Regulations
provide the Landlord one (1) year advance notice in the event it intended to
terminate said Agreement. Mr. Mitchell
indicated that due to extenuating circumstances, the Department’ provided only
six (6) month prior notice of its intent to terminate the Lease Agreement. Brown
University claimed that
the State had breached the Lease Agreement and demanded payment of six (6)
months of unpaid rent. Due to certain
physical issues with the premises, the Department of Business Regulations believed
that it had some offsets to the Landlord’s claim for six (6) month of unpaid
rent. The Governor’s Office negotiated a full and final settlement of any
claims upon the Department of Business Regulations’ payment of $156,000 to Brown University. Said negotiated settlement became an
Amendment to the Lease Agreement. There
for Mr. Mitchell stated that the Department of Business Regulations is seeking
the Committee’s approval of and signatures the Second Lease Agreement to terminate
the Lease Agreement upon payment of $156,000 to Brown University in full and
final settlement of the its claim for unpaid rent. Chairman Flynn clarified that had the Lease
Agreement gone to its full term, the State of Rhode Island would have paid $1,240,000;
however, as a result of the negotiated settlement, the State of Rhode Island is
required to pay the sum $156,000 in full and final settlement of the claim for
six (6) months of unpaid rent. Mr.
Mitchell stated that is correct and provided an accounting of the settlement
for the Committee’s review and consideration. A motion to approve was made by Mr. Griffith
and seconded by Mr. Woolley.
Passed
Unanimously
There being no
further business to come before the State Properties Committee, the meeting was
adjourned at 12:00 a.m. A motion was
made to adjourn by Mr. Griffith and seconded by Mr. Woolley. Passed Unanimously
_______________________________
Holly H. Rhodes, Executive
Secretary