Economic Development - NYT - Tax credits used in Providence restoration

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Published in the New York Times, Sunday, December 24, 2006

Square Feet
Empty for 75 Years, and Now a Symbol of Rebirth

By ALISON GREGOR

PROVIDENCE, R.I. -- THE huge neo-Classical Masonic temple in the heart of the downtown here devolved into an eyesore after 1928, when the Masons abandoned the still-unfinished building. Decades of neglect left the limestone colonnade crumbling, the brick facade scrawled with graffiti and even the original copper roof picked apart by thieves.

And that was just the outside.

“I couldn’t get out of here fast enough,” recalled William W. Perrett, an expert on historical rehabilitation who first examined the building about 25 years ago. He took a second look several years ago. “You couldn’t move inside for the spray cans,” he said.

Today, however, the building has become a symbol of the rebirth of Providence, not to mention one of the largest restoration projects in Rhode Island’s history. In April, it is scheduled to open as a Marriott Renaissance hotel, with 272 luxury rooms, a ballroom, a lower-level restaurant and lounge, meeting rooms and a fitness center. Weekday corporate rates will start at $259 a night.

Sage Hospitality Resources of Denver and its investment partner, the Kimberly-Clark Corporation, have spent about $87 million to transform the temple over the last five years. The developers are receiving a federal tax credit equivalent to 20 percent of the main costs of the rehabilitation and a state tax credit worth an additional 30 percent, along with some city assistance.

“This building could never have been done without historic tax credits,” said Mr. Perrett, now Sage Hospitality’s project manager for the new hotel. But, he added, “federal tax credits weren’t sufficient to do this deal; they needed state tax credits.”

Mr. Perrett, a native of Michigan whose family owned hotels there, has completed five rehabilitations of historic buildings into hotels, including the conversion of a Romanesque-style bank building in San Diego into a Courtyard by Marriott and the conversion of the Fulton Building in Pittsburgh into one of the most popular hotels in the Renaissance line.

The resurrection of the Providence building has mirrored the gradual transformation of the city, whose economy had changed after the exodus of manufacturers after World War I.

The building’s conversion, though, has been a complicated one.

“The weird thing is, the building really never had a history,” said Edward F. Sanderson, a historian and executive director of the Rhode Island Historical Preservation and Heritage Commission.

Construction began in 1926. But about two years later, “the Masons ran out of money, and they told the workers to quit work for the day, and somehow word got around that they shouldn’t come back,” Mr. Sanderson explained. “When I first came to work in the 1970s, you could go in there, and you could see the hand tools that were still sitting where they had been put down in 1928,” he said. “It was pretty amazing.”

The building’s unfinished eight-story interior remained a large hull with rusted steel-platform staircases gripping its graffiti-covered walls.

“The copper roof had been stolen in the 1970s — an entire copper roof — and the inside was rotted,” Mr. Perrett said.

The temple had been part of a complex that included a narrow structure linking it to a large theater building. The state bought the entire complex in 1945 and finished the theater building, converting it into the popular Veterans Memorial Auditorium, according to Mr. Sanderson. The auditorium is used primarily as a symphony space.

Despite the temple’s optimistic cornerstone, which is carved with a “1949” date, the state did nothing with the building.

There it sat on a slope just below the Statehouse, Mr. Sanderson noted, “too big and too expensive to fix, and too big and too expensive to tear down, deteriorating outside the governor’s window.”

“The idea that a building would stand empty and unused for 75 years in the center of a city is pretty extraordinary,” he said.

The restoration project was extensive — and unusual. A $2 million metal brace was built to hold up three walls of the temple while developers tore down and rebuilt the interiors. A fourth wall was destroyed many years ago, along with the building linking it to the theater.

To take advantage of a ballroom originally built by the Masons below what is now the Veterans Memorial Auditorium, developers excavated two stories below the temple to create an underground passage between the two structures. The narrow linking building was rebuilt, and the ballroom was reconstructed to make it soundproof, ensuring that the strains of a Beethoven fugue would never meld with the driving rhythms of “Hava Nagila” at a wedding in the hotel ballroom, and vice versa, Mr. Perrett said.

For Renaissance, a brand under the Marriott International umbrella, the project offered the perfect opportunity to extend the brand, which appeals to business travelers who like to explore the cities they visit, said Rita Cuddihy, the senior vice president of Renaissance. The brand has about nine hotels in rehabilitated historic buildings throughout the country, with three more, including the Renaissance Providence, about to open.

“A historic redo is the perfect way to give local authenticity,” Ms. Cuddihy said.

Conversions of historic buildings — whether banks or department stores or Masonic temples — have become increasingly commonplace, according to John M. Tess, the president of the Heritage Consulting Group, which has worked on several hotel conversions over the last 25 years. Besides offering tax credits, the projects are also appealing because they enable developers to redevelop historic buildings exceeding the size allowed by existing zoning regulations, he said.

Mr. Tess says he has seen an increase in hotel projects involving historic buildings over the last decade as more people have moved into the downtown areas of American cities.

“A lot of hotel chains will consider historic rehabilitations,” Mr. Tess said. “With respect to historic hotels, they can act as almost a flagship. Every town has a hotel or historic building that everyone in town knows about.”

The city of Providence, meanwhile, is also considering converting a portion of another historic structure into a hotel: the South Street Station complex, a former electrical power generating plant on the Providence River.

Mr. Tess said that these types of projects, made feasible by state and federal tax credits, are limited only by the supply of buildings.

“Back in the 1980s and early 1990s, you could go in and buy these buildings at reasonable cost,” he said.

“That’s no longer true today, which is why it’s important to have in place government incentives that allow historic buildings to be saved and play an important part in the activities of cities.”

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