Providence poised to declare River House apartments developer in default of tax treaty - News - providencejournal.com
PROVIDENCE, R.I. — Delays by the South Street Landing developers to begin construction early this year on two apartment buildings on a nearby Davol Square parking lot have caused the City Council to consider issuing the project a notice of default.
After the developer missed a Jan. 27 deadline to get all city construction permits, the council's Finance Committee voted this month to recommend to the City Council that the city issue a default notice to CV River House LLC, of San Diego, the entity that has planned to build the River House apartments. The default would be for missing a deadline in the project's city tax-stabilization agreement, which limits taxes owed over 15 years to about $3.3 million.
The council is expected to consider the issue Thursday night. It could vote to issue the notice or send the matter back to committee.
"In order to preserve our rights under the [tax-stabilization agreement], we have to send a notice of default,” council President Luis A. Aponte said.
CV Properties LLC, of Boston and Southport, Conn., and its president and CEO Richard A. Galvin, has led the $220-million redevelopment of an old power station into South Street Landing, which will house Brown University offices and the Nursing Education Center for the University of Rhode Island and Rhode Island College.
CV Properties bought the power station and adjacent property in 2015 with an undisclosed investment from Wexford Science & Technology of Baltimore. Also, a separate real estate entity affiliated with CV Properties, CV River House LLC, bought the parking lot where it intended to build the River House apartments.
The CV Properties and Wexford have also partnered to build an innovation complex and hotel on former Route 195 property north of South Street Landing, across Dyer Street. They've signed a purchase and sale agreement, but that sale has not closed, 195 Commission spokeswoman Dyana Koelsch said Wednesday.
Meanwhile, real-estate investment trust Ventas Inc., of Chicago, announced Tuesday it has paid $151 million to buy South Street Landing and adjacent property, described in a news release as "a high-quality life science, research and medical campus."
Last summer, Ventas acquired Wexford's real-estate assets for $1.5 billion in cash from Wexford's parent company.
Now, using "cash on hand and other capital sources," Ventas announced it has paid $130 million for South Street Landing and an adjacent, new parking garage, still under construction. Plus, Ventas paid $21 million for "adjacent sites targeted for development and redevelopment to support the demand from universities and research companies."
It's unclear what Ventas bought for $21 million.
Ventas did not return a phone call from The Journal. But in a statement issued to the newspaper, executive vice president and chief investment officer John D. Cobb said the firm's "delighted to make a significant capital investment" here and is "confident" that with state leaders' support the city "will be a magnet for jobs, growth and innovation.”
Mayor Jorge O. Elorza's spokesman Victor Morente said the city won't know what Ventas bought until deeds are recorded.
CV Properties spokesman Eric Cote said the firm secured a temporary certificate of occupancy in January for South Street Landing, so universities can furnish their space. He said Galvin is “absolutely” still involved in the project.
Spokeswoman Linda Acciardo said URI is "still on schedule to have the building delivered to us in the spring," classes are still expected to start in the fall, and the change in ownership isn't expected to have any impact on URI's timeline.
With staff reports from John Hill
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