IN PROGRESS: American Locomotive Works (ALCO)

[pete11]

Just to be clear, we aren't actually talking about people squatting here. The people being displaced by ALCO have businesses, have leases, pay rent... There are people out there trying to band together to create more affordable spaces that people can have ownership in. I think pressure needs to be brought to bear against the city and state to ensure that they foster and support these endeavors.

Cotuit, the roadblocks to small businesses "owning" are numerous, but keep in mind debt by business entities (especially new ones) require substantial down payments, are based at prime plus, and have a much shorter duration than home mortgages. The need to own would stifle many small businesses, as well as any start-ups.

[runawayjim]

Cotuit, the roadblocks to small businesses "owning" are numerous, but keep in mind debt by business entities (especially new ones) require substantial down payments, are based at prime plus, and have a much shorter duration than home mortgages. The need to own would stifle many small businesses, as well as any start-ups.

this is exactly the reason why small business owners should work together and pool together money to buy a building where they can all exist and not have to worry about their landlord selling it off.

[Cotuit]

Absolutely, but the property owners rights supercede those of their renters, as it should be...

I agree, I just wanted to point out the people in ALCO currently are not squatters.

[pete11]

this is exactly the reason why small business owners should work together and pool together money to buy a building where they can all exist and not have to worry about their landlord selling it off.

They have that, their called communes. There are many obstacles to your model, viability of all businesses, shared depreciation, some sort of building assoc. fees maintenance etc......... Renting is usually the best option for most small businesses, especially at the offset. Rapid appreciation the last 6 or so years not withstanding.

[Cotuit]

Cotuit, the roadblocks to small businesses "owning" are numerous, but keep in mind debt by business entities (especially new ones) require substantial down payments, are based at prime plus, and have a much shorter duration than home mortgages. The need to own would stifle many small businesses, as well as any start-ups.

I know it's not easy, but where there are programs in place to help small businesses form ownership collaborations, they should be encouraged.

[Garris]

But there is little alternative to the renting model... Renting means risk by default. I know people renting who need to vacate or buy into condo conversions. If I remember correctly, when my father had his small HR consulting business, the building he was in was sold to a local hospital for clinical use, and he had to find new space. Similarly, Brown is about to displace about half the businesses in the "Rubix Cube" building downtown when they take ownership.

What's the alternative to that model?

- Garris

EDIT: Also, an example from medicine, multiple different private practices from multiple different procedural specialties (surgery, urology, ophtho, gastroenterology, etc) often hate paying for time in hospitals and will pool resources to buy or build ambulatory surgical centers to better control costs and control their operating style (scheduling, employees, etc, which otherwise are controlled by the hospitals and not the practices).

This requires substantial investment and loans, and the practices often don't see return on that investment for many, many years. Some practices only break even on that kind of investment, but the cost stability, risk management, and ability to control aspects of their practice makes the overall investment worthwhile nevertheless...

Many other private practices starting out will rent time in existing centers until they save/borrow enough to open their own (assuming they are successful enough).

So there is a model for such things...

[pete11]

But there is little alternative to the renting model... Renting means risk by default. I know people renting who need to vacate or buy into condo conversions. If I remember correctly, when my father had his small HR consulting business, the building he was in was sold to a local hospital for clinical use, and he had to find new space. Similarly, Brown is about to displace about half the businesses in the "Rubix Cube" building downtown when they take ownership.

What's the alternative to that model?

- Garris

Actually it depends on how well your funded. The less funding you have the more ominous any debt you take on is in regard to cash flow, and monthly break even. The real conundrum, is that there is so much available space in Providence. As much as I hate these businesses being displaced, I think my anger is towards the fact that as our business climate WORSENS, taxpayer dollars are earmarked for "luxury" condos in what you called a "dump". I am not tring to pick a fight, but I feel strongly about this, and found lone ranger's hence post as patronizing to a displaced business owner that more than likely be forced to move or close.

[magoldbe]

hey, sorry for my somewhat impassioned and surly post.

I have a line into the SBER project from my landlord (who sold his building to them) and these are things that I have heard:

- Residential condos will start around 300K

- Prospective businesses being courted include a Target, a Best Buy, and other big-box retailers

- In addition to the Valley St. corridor, SBER has bought or is planning to buy buildings behind Olneyville Sq. including Providence Knife and Plating bldg and that big, long one that has band practice space (sorry, don't know what it's called.)

- Additionally, Armory Revival has bought the building at the corner of Oak and Troy, formerly home to a latin pentacostal church and several artist studios.

- The Art Craft Braid building will be renovated by Steve Durkee (partner of one of the owners of chi chi Gallery Agniel) to "fit the needs of artists." current studio renters at ACB (many of whom have shown at said gallery) will be given first dibs at renting/buying the new spaces. however, this is expected to take about a year and square footage will be priced at about 10 times the current cost.

- Despite the Projo reporting that SBER will be helping small businesses with relocation, I have heard nothing from them.

Don't get me wrong -- investing in cities is a wonderful thing to do. Providence could use some more housing, better schools and a stronger tax base. But Providence is granting tax breaks to a developer who is a) replacing local businesses with national chain retailers and b) building housing/business stock priced way out of reach to the majority of rhode islanders. I think this is a patently bad idea. If these real estate shifts are all just a result of "market forces" then SBER shouldn't need government interventions to actualize these projects.

The fact is that this "market force" of which you speak is not some reified, intentionless power like the wind or the tides. It is a tool weilded by people rich white men who can get bank loans and, bribe councilmen and lobby for tax breaks. Regular working people have very little to do with it.

-Martina

[Lone Ranger]

Cotuit, the roadblocks to small businesses "owning" are numerous, but keep in mind debt by business entities (especially new ones) require substantial down payments, are based at prime plus, and have a much shorter duration than home mortgages. The need to own would stifle many small businesses, as well as any start-ups.

It's a calculated risk, then, to operate a business out of a rental property. But it's a risk the business-owners in question chose to take. Call it a gamble, or call it a lack of foresight. But as long as those businesses operated on ALCO property, they were enjoying the benefits of that risk (i.e., lower rent, that is, lower overhead, etc.), so it seems a little disingenuous when they cry foul now that the flipside of that calculated risk has turned up to haunt them.

[Cotuit]

As it is, I'm looking at other cities. There's no way I can afford to stay in rhode island.

I don't know how much can be done if your thinking you can't afford to stay in Rhode Island at all. But I do know that Thom Deller (the Director of Planning and a contributor here) is very intent on doing whatever he can to ensure that businesses aren't forced out of Providence. At our last forum meeting he was actually dicussing some options with one of our members and his business' space needs. One of his associates was also at our meeting, I think she had more to do directly with business help in her job, I'll look at her business card again when I get home.

I don't know what SBE&R has planned as far as helping tenants, or when those programs will begin, but you should certainly let the Planning Department know your concerns. They can give you a better idea of what SBE&R has said they will be doing, and might be able to help you get in contact with property owners who are looking for tenants.

[eltron]

The fact is that this "market force" of which you speak is not some reified, intentionless power like the wind or the tides. It is a tool weilded by people rich white men who can get bank loans and, bribe councilmen and lobby for tax breaks. Regular working people have very little to do with it.

-Martina

Martina-

Sorry you are getting kicked out. That stinks.

Last I checked though, I am just a regular working dude who hasn't bribed a councilman or lobbied for a tax break, and am doing just fine in Pawtucket - it just takes a little ingenuity and effort...you might want to check out that thread for details.

there is alot here, and lots up for discussion...

Change does happen. Overall, the ALCO project is going to be a good thing for the city, and people that live and work in the neighborhoods are going to benefit. But you are right, things could certainly be done better...more affordability, more inclusion, easier for the little guy or gal...wish I had more time...

[Cotuit]

Last I checked though, I am just a regular working dude who hasn't bribed a councilman or lobbied for a tax break, and am doing just fine in Pawtucket - it just takes a little ingenuity and effort...you might want to check out that thread for details.

Yes, not all developers are money grubbing greedy sociopaths.

The Grant

Though I've never met j. and eltron, so I can't really say they aren't.

[pete11]

It's a calculated risk, then, to operate a business out of a rental property. But it's a risk the business-owners in question chose to take. Call it a gamble, or call it a lack of foresight. But as long as those businesses operated on ALCO property, they were enjoying the benefits of that risk (i.e., lower rent, that is, lower overhead, etc.), so it seems a little disingenuous when they cry foul now that the flipside of that calculated risk has turned up to haunt them.

Reactionary thinking like this is dangerous, and I believe in laissez-faire capitalism.

[runawayjim]

Reactionary thinking like this is dangerous, and I believe in laissez-faire capitalism.

and laissez-faire capitalism allows the building owners to do what they want with their building because eventually the market will balance everything out. and that's what the building owners are doing, they sold the building to a developer.

and thinking like that is not very reactionary, it's matter of fact. anyone who rents is taking a risk. i am very comfortable in my apartment, but my landlady could tell me that she decided to sell the house i live in and the new owners may decide that they aren't going to rent it out at all or that they're going to raise my rent by $100 a month (which would make it unaffordable for me). do i think it will happen? no. could it happen? most definitely, in fact the house i live in would be a great starter home for a young couple if converted back to a single family home (it was converted from a single family home to make the upstairs another apartment).

[pete11]

and laissez-faire capitalism allows the building owners to do what they want with their building because eventually the market will balance everything out. and that's what the building owners are doing, they sold the building to a developer.

By balance do you mean one side gets $100m in tax credits and floated bonds and the other side is told to move along? Then I guess you're right.

P.S. unlike some other projects, wouldn't some of us like to see some signed leases (other than RIEDC) and list of tenants, before we commit OUR money to this project.

[magoldbe]

I would have bought if I could have, but it's pretty a hard thing to do -- especially in RI.

Take Philadelphia (my home town) by way of comparison:

Most of philly's housing and business real estate is in the form of small (~1000 sq ft) town houses and adjoining store-fronts. For years and years, these buildings have been sold for well under 30K in most working-class neighborhoods. Thus most people are able to own their own homes. Now that Philly is undergoing an unprecedented "rennaissance" fewer people are being displaced because they own the buildings in which they live and work.

Now in Providence, homes are built vertically in triple-decker tenements. To buy one of these, it is necessary to buy the whole building. Because they're multi-family homes, they're considered business properties and you're expected to pay at least 25% down for a house that's 3 times the size of what you need. As for commercial space -- most of it is tied up in sprawling strip malls, enormous factory buildings, or, in the case of thayer, downtown, and wickenden, it's all owned by a small cabal of unscrupulous real estate moguls.

condo-ization of 3-deckers would seem like a nice idea, since people could now own their own homes, but this process began after the real estate boom had already taken hold, so those who rent generally cannot afford to buy.

it's just too bad. that's why I'm leaving for more affordable pastures.

[eltron]

Now in Providence, homes are built vertically in triple-decker tenements. To buy one of these, it is necessary to buy the whole building. Because they're multi-family homes, they're considered business properties and you're expected to pay at least 25% down for a house that's 3 times the size of what you need. As for commercial space -- most of it is tied up in sprawling strip malls, enormous factory buildings, or, in the case of thayer, downtown, and wickenden, it's all owned by a small cabal of unscrupulous real estate moguls.

it's just too bad. that's why I'm leaving for more affordable pastures.

Magoldbe, I hear your pain, I really do, but:

"To buy one of these, it is necessary to buy the whole building. Because they're multi-family homes, they're considered business properties and you're expected to pay at least 25% down for a house that's 3 times the size of what you need."

This is completely false. If you intend to occupy one of the units, you most certainly can buy a two- or three-family house with as little as 0% down, and in some cases, get 5% back. As pete11 will point out, this is not always the wisest path, but in some cases, works out great.

"As for commercial space -- most of it is tied up in sprawling strip malls, enormous factory buildings, or, in the case of thayer, downtown, and wickenden, it's all owned by a small cabal of unscrupulous real estate moguls."

There are many opportunities left in RI and SE Mass to buy commercial property on a small and affordable scale. Unfortunately less so in Providence (which is why J and I are hitting The Bucket), but look at where you just listed - Thayer, Wickendon, downtown...of course you aren't gonna find something there. But dig a little deeper, you can find some great deals. Its definitely not easy, but its doable. Look at that Hive Archive, Monohassett Mills, a whole bunch of places in Pawtucket. Cuttin and running is the easy way out...

[eltron]

Yes, not all developers are money grubbing greedy sociopaths.

The Grant

Though I've never met j. and eltron, so I can't really say they aren't.

oh we're money grubbing greedy sociopaths alright...

[Cotuit]

There are many opportunities left in RI and SE Mass to buy commercial property on a small and affordable scale. Unfortunately less so in Providence (which is why J and I are hitting The Bucket)

Speaking of SE Mass, when the hell is Fall River going to start getting the overflow?

oh we're money grubbing greedy sociopaths alright...

I was afraid of that.

[pete11]

This is completely false. If you intend to occupy one of the units, you most certainly can buy a two- or three-family house with as little as 0% down, and in some cases, get 5% back. As pete11 will point out, this is not always the wisest path, but in some cases, works out great.

No not at all this is savvy financial advice.

I don't know how out of school this is so i'll keep it generic. The R.I. Attorney General's office is currently (like all the other states) reviewing a $325 million dollar Ameriquest settlement (no charges where ever filed) on predatory lending. They are uncovering some seriously unscrupulous practices.

[eltron]

- Prospective businesses being courted include a Target, a Best Buy, and other big-box retailers

Don't get me wrong -- investing in cities is a wonderful thing to do. Providence could use some more housing, better schools and a stronger tax base. But Providence is granting tax breaks to a developer who is a) replacing local businesses with national chain retailers and b) building housing/business stock priced way out of reach to the majority of rhode islanders. I think this is a patently bad idea. If these real estate shifts are all just a result of "market forces" then SBER shouldn't need government interventions to actualize these projects.

Not to pick on you, but I think the big-box stuff was a holdover of a previous plan by the Licht family prior to SBER getting involved.

Now, you are completely right...this development is not only unaffordable to Olneyville (by 5 or 6 times or more), but to the overwhelming majority of Rhode Islanders. There are definitely problems with that. Now, SBER is contributing a small amount of money for affordable housing, but I think its up to the city to hold their feet to the fire on that. Too bad inclusionary zoning isn't in place yet.

Also, the "tax break" is CREDIT from the STATE, not CITY, and its only meant to defray costs of redeveloping very difficult to redevelop historic buildings. And they have to invest (SPEND) huge amounts into the buildings and community to get that CREDIT back.

[DaveRPI]

"hey, sorry for my somewhat impassioned and surly post.

I have a line into the SBER project from my landlord (who sold his building to them) and these are things that I have heard:

- Residential condos will start around 300K

- Prospective businesses being courted include a Target, a Best Buy, and other big-box retailers

- In addition to the Valley St. corridor, SBER has bought or is planning to buy buildings behind Olneyville Sq. including Providence Knife and Plating bldg and that big, long one that has band practice space (sorry, don't know what it's called.)

- Additionally, Armory Revival has bought the building at the corner of Oak and Troy, formerly home to a latin pentacostal church and several artist studios.

- The Art Craft Braid building will be renovated by Steve Durkee (partner of one of the owners of chi chi Gallery Agniel) to "fit the needs of artists." current studio renters at ACB (many of whom have shown at said gallery) will be given first dibs at renting/buying the new spaces. however, this is expected to take about a year and square footage will be priced at about 10 times the current cost.

- Despite the Projo reporting that SBER will be helping small businesses with relocation, I have heard nothing from them.

Don't get me wrong -- investing in cities is a wonderful thing to do. Providence could use some more housing, better schools and a stronger tax base. But Providence is granting tax breaks to a developer who is a) replacing local businesses with national chain retailers and b) building housing/business stock priced way out of reach to the majority of rhode islanders. I think this is a patently bad idea. If these real estate shifts are all just a result of "market forces" then SBER shouldn't need government interventions to actualize these projects.

The fact is that this "market force" of which you speak is not some reified, intentionless power like the wind or the tides. It is a tool weilded by people rich white men who can get bank loans and, bribe councilmen and lobby for tax breaks. Regular working people have very little to do with it.

-Martina"

I'm sorry but you have no clue what you are talking about. You are making ridiculous claims and it sounds like you have a personal loss associated with this deal.

I used to love reading this site and about all the new development news going on in my hometown, but I am incerasingly sickened by whats posted on here. Its ridiculous that most of the real stories, topics, and issues are clouded by NIMBY's and know-nothings. It takes 5 min to scroll through and get to a post that really says something of substance and/or of new insight into a future development. Garris and Cotuit and a few others are the only reason I still poke around on this thing!

WHY WOULD ANYONE ARGUE ABOUT ***ANYTHING*** THAT'S PROPOSED FOR OLNEYVILLE? Its completely ridiculous to me. Its the most down-trodden neighborhood in Providence by far. It was decimated by the highway and railroad buildouts of earlier eras. Its main and probably only key asset is its location and 'some' infrastructure. The ONLY chance it has for revival is infusion of capital. For this to occur, there has to be some sort of way to profit. If there is no profit, there is no true sustainable development.

An Olneyville native's story: When I was born, my parents lived in Olneyville. They were young and thats where they could afford to live at the time. The ONLY chance I would ever move back there, spend my money there, and otherwise create a life there, etc, would be if more developments like this come along.

Here's another point I think people miss all the time... Life's not fair.

Olneyville has a great chance to be a happening neighborhood in 10 years with all of the proposed developments and future ones that we havent even seen yet. Its proximity to downtown and federal hill etc give it a huge advantage over other Providence neighborhoods. It would be a huge shame to see the same situation in that neighborhood in 10 years because people were mad about a Best Buy moving in with some 300k condos. People who own land/bldgs there now or in the near future only stand to benefit.

Renting AND buying are both risks. Anytime you spend your money, you risk losing it or whats associated with it. Thats just the way it works.

btw- I work for a company that has as a core business, Tax Credits and its hilarious to think that people would assume that only rich white people own or have the chance to get them. *completely misinformed* should be your new name.

peace I'm outta here

Dave

[Garris]

- Martina,

I can almost, almost work with your points and follow you until you throw out gross and insensitive comments like:

It is a tool weilded by people rich white men who can get bank loans and, bribe councilmen and lobby for tax breaks. Regular working people have very little to do with it.

and...

As for commercial space -- most of it is tied up in sprawling strip malls, enormous factory buildings, or, in the case of thayer, downtown, and wickenden, it's all owned by a small cabal of unscrupulous real estate moguls.

As for the Philly area, while I didn't grow up there, I know it very, very well and it's one of the few areas besides Providence where I'm looking for positions right now, so I can do a very direct housing comparison between the two downtowns.

First, I think you are grossly simplifying the Philly situation and the Providence situation. Some points:

- Providence, until extremely recently, had very little to no downtown housing market in existence at all. There are very, very few people being displaced housing-wise from downtown, since there were so few people there in the first place and since so much of the construction (RISD dorms, 110, Waterplace, Westin 2, Grant's Block, etc) are new projects. Also, mature areas like the East Side by definition won't see a lot of new construction, so that's why some existing units are shooting up in price as desirability increases (exactly what happened in Boston as well).

- Philly, by contrast, is a much, much larger downtown by a factor of several hundred by any measure and, unlike Providence, has always had a substantial downtown residential component (I recently read somewhere it has by some counts the second or third biggest downtown core residential population of any city in America). Philly also has a much bigger range of neighborhood incomes and socioeconomic demographics than metro Providence.

Philly's renaissance, while certainly raising prices in almost every area of the city (like Providence), is being accompanied by a near record level of housing/apt/condo units being built in the city in many price ranges (also also with a predominent luxury component) which is to some degree preventing pricing of existing units from going through the roof (although, as a recent Philadelphia Magazine article shows, there are still some areas in double digit increases in the last year or two).

Also, there's a lot of displacing of commercial interests as well in Philly with recent building but, again, Philly has a much, much bigger commercial and industrial infrastructure in place than Providence to adjust to displacements. I mean, if the waterfront and Promenade industrial areas go away in Providence (and the East Providence industrial area is going away), there's very little left. If one commercial building gets lost in Philly in Old City for condos and restaurants, there are still a ton of similarly (if not better) priced areas to go to within the city limits. Totally different dynamics.

Regarding this statement about renters in RI:

since people could now own their own homes, but this process began after the real estate boom had already taken hold, so those who rent generally cannot afford to buy.

I'm sorry, but I'm just not finding this to be true. I'm seeing friends who are currently renting now buying all over the metro Providence area without significant changes in income or lifestyle. Are they signing up for Westin II or buying into the Cosmopolitan? Absolutely not. Are they in quite nice (and cheap) condos, SFH's, or converted mills in Woonsocket, Warwick, Pawtucket, Attleboro, Lincoln, Rumford, Riverside, North Providence, Smith Hill, and (gasp!) even the East Side? Yup...

I don't know... I'll still be the first to agree that lots of luxury housing is being built downtown and in areas such as the East Side, but I don't see a middle-class affordability crisis. I know someone coming to Providence who will almost be making $45K a year (below RI average household income), and she found a nice condo (about $180,000) near the guilded Blackstone running path on the East Side. And she looked at lots of places from Seekonk to East Greenwich all over the area in a price range from $150,000 to $200,000... Did that money buy lots more 10 years ago. Surely, but it still buys...

- Garris

[Cotuit]

I used to love reading this site and about all the new development news going on in my hometown, but I am incerasingly sickened by whats posted on here. Its ridiculous that most of the real stories, topics, and issues are clouded by NIMBY's and know-nothings. It takes 5 min to scroll through and get to a post that really says something of substance and/or of new insight into a future development. Garris and Cotuit and a few others are the only reason I still poke around on this thing!

While I sometimes fear the increased moderation actions on my part the new infusion of diversity of opinion on the forum has the potential to create, I actually am really enjoying all the new input, even the people I completely disagree with at times. And I think most (all) of the contributors here, regardless of where they stand on certain issues, are light years away from the prototypical East Side NIMBYs we so often hear about. You may not agree with Martina's views, or the reasoning she uses to reach them, but at least she has a legitimate reason to be concerned, she's being directly impacted, she's not just crying about losing a view or trees along a highway, she's not a NIMBY.

I would hope that a diversity of opinion would not drive you away from UrbanPlanet. A very integral part of the site's mission is to create dialogue, and foster education, in both directions.

[magoldbe]

An Olneyville native's story: When I was born, my parents lived in Olneyville. They were young and thats where they could afford to live at the time.

woah man... maybe if your parents had been evicted from olneyville and forced to the streets you never would have been born.

see: http://www.housingworksri.org/matriarch/Mu...ythingstats#242

This situation is waay more messed up than people are willing to admit. If it were a matter of shifting populations, that would be fine. the problem is that there's less and less room for the shiftees to go.

Dave, you're lucky that you were born during a time when young couples who were starting out could afford to live someplace decent and secure.