Part I
:: Trickle Down…
Issue 1
Volume 2
Commercial Space in Providence
by Lisa Carnevale + Erik Bright, PCIS
page 1 page 2
A 2005 study conducted by the Rhode Island Public Expenditure Council identified Providence as having the fifth highest commercial property tax burden in the nation and ranked it highest among all New England cities; 72.2% above the New England city average (RIPEC 2005). These statistics demonstrate the high costs of owning and renting commercial space within the city of Providence compared to all the cities in the region and nearly all in the nation. As a result, the ability to create affordable commercial space in Providence is made more difficult and so is its ability to meet the needs of a growing and diversifying city.
To magnify the problem, a favorable real estate market, an automatic residential zoning variance and the availability of historic tax credits has contributed to the recent redevelopment of historic buildings located throughout Providence’s Industrial and Commercial Buildings District (ICBD). This recent trend has displaced and put a large population of commercial tenants at risk. A survey conducted by the Partnership for Creative Industrial Space (PCIS) estimates that the ICBD facilitates 1,261 Businesses and 15,672 Jobs (PCIS 2004). These tenants represent the remaining commercial, industrial, and creative sectors that have been able to operate within Providence to date because of the affordable rents offered at these sites. Expensive rehabilitation projects eliminate the immediate affordability of commercial space within the buildings, forcing tenants to search for affordable space outside of Providence.
Since the 2004 survey, there have been five redevelopments that have added significantly to the displacement of small creative businesses in Providence. Each of these displacements was due to the historic preservation and Adaptive-Reuse of buildings within the ICBD. Combined, the buildings in question are and have been home to over 100 commercial and industrial businesses and well over 500 workers. The most dramatic and visible short-term effect that these developments will have on the surrounding community is the displacement of the businesses within the buildings and the loss of affordable commercial space ranging from $2.00 - $6.00 a sq. ft. In PCIS’ work implementing the ALCO Relocation Program, a first of its kind program initiated by ALCO to address this tenant issue by offering relocation and financial assistance, we have found the following: despite efforts to direct tenants to local commercial sites, only 50% of the affected businesses are relocating within the Providence city limits, while the rest are moving out of Providence as the stock for affordable commercial space has dwindled. Providence is no longer positioned to house these creative and industrial businesses compared to surrounding cities that are catering to exactly this community. In many cases, along with offering commercial space at low rents, they are renovating buildings to code compliance and building out to suit the small business needs. Compare this to the renovated commercial space in Providence’s Eagle Square being offered at $20.00 a sq. ft. and the picture is bleak.
Through this emerging trend, we can see we are losing small-scale industry in our city. This is the cottage industry that not only sustains a local economy, but also retains an attractive character in the city and supports the lower income immigrant constituents that surround these mill buildings. At present, there are only a handful of Industrial Buildings left in the community that remain affordable havens for small businesses, artists and those community flea market retail vendors who provide an economic engine of discounted merchandise to the community. If we lose these spaces before realizing the capacity to relocate them, the community and its culture will shift in a serious way.
