IN PROGRESS: The Residences at The Westin

[Cotuit]

State accepts $6.5 million Procaccianti settlement

The agreement lays to rest a lawsuit over an outstanding loan from the state's credit union crisis in the 1990s.

BY ANDREA L. STAPE Journal Staff Writer | February 22, 2005

PROVIDENCE -- The state yesterday agreed to accept a $6.53-million payment from hotel-developer and credit-union debtor James Procaccianti to settle a lawsuit it filed against him 11 years ago.

Procaccianti is president of The Procaccianti Group, which in December offered to buy the state-owned Westin Providence for $95.5 million. The lawsuit, which involves a debt to the state left over from the early 1990s credit union crisis, muddled the sale.

Yesterday, the state committee responsible for settling with delinquent credit union borrowers approved the deal, putting the lawsuit to rest.

Procaccianti will wire $750,000 to the state's lawyers tomorrow and will pay the remaining $5.77 million on Thursday, according to the settlement deal.

"This has been worked out over a period of several weeks. Between last Thursday and today, we ironed out all the issues related to the settlement and we're delighted this matter is behind us," said Richard MacAdams, the lawyer representing Procaccianti in the lawsuit. Procaccianti approached the state with the deal, said Brian Stern, executive director of the Rhode Island Department of Administration.

As part of the settlement, the state agreed not to pursue Procaccianti for any other outstanding debts. The state has estimated that Procaccianti and his related businesses had $14.7 million in loans outstanding from the credit union crisis, but too much time has passed for the state to try to collect on most of those debts. According to state law, there is a 10-year statute of limitations on contracts such as loans, Stern said.

Yesterday's settlement was over one outstanding loan for $3 million. The $6.5 million payment includes principal, interest and legal fees.

"The State of Rhode Island has collected everything that was able to be collected as of right now," Stern said. "As of today, we're just dealing with the one loan legally we can still collect on."

The Rhode Island Convention Center Authority, which oversees The Westin Providence, will discuss the hotel sale at its monthly meeting on Thursday. It's unclear whether the authority's board will vote this week to sell to The Procaccianti Group, said James McCarvill, executive director of the authority. The board's chairman, David Duffy, had expressed concerns over the outstanding lawsuit.

Lawyers for the state and Procaccianti said repeatedly yesterday that the settlement had nothing to do with the hotel sale.

"It was very clear in the resolution at the hearing, that this is in no way tied to the Westin or anything else outside this litigation," Stern said.

Procaccianti and Procaccianti-related businesses were some of the largest borrowers from Marquette Credit Union in the late 1980s and early 1990s, according to state records.

Marquette was the largest of 45 privately insured banks and credit unions taken over by the state on Jan. 1, 1991. Some of the banks and credit unions had loaned and lost so much money to risky commercial development deals and borrowers that they couldn't cover customers' deposits. Their private insurance company, the Rhode Island Share and Deposit Indemnity Corporation, couldn't either.

The state set up a quasipublic agency -- the Depositors Economic Protection Corporation -- to take over some of the failed banks and credit unions, return money to depositors and recover what it could from delinquent credit union borrowers to pay back taxpayers who paid for the bailout.

Procaccianti and related entities were some of the largest borrowers with 11 loans outstanding, according to a commission set up to study the failure of RISDIC.

James Procaccianti has said that all of the loans related to him were current at the time the credit unions were taken over by the state. He said the closure of the credit unions caused his businesses harm, since they were not able to get the promised loan money from Marquette to finish construction projects. Consequently, the companies lost money -- and in Ohio the businesses lost 230 apartments, according to David Preston, a spokesman for Procaccianti.

Procaccianti said that if the collateral attached to the loans had been liquidated in a "timely" manner, the total would have added up to more than the outstanding loans and the state would have owed Procaccianti $1 million.

In 1994, the DEPCO board rejected a settlement agreement with James and Armand Procaccianti on $14.7 million worth of loans, according to DEPCO records. The Procacciantis would have paid $2.25 million, and $12.5 million would have been forgiven. The DEPCO board turned down the offer, with the hope that it would be able to collect more from Procaccianti and his related businesses.

That same year, DEPCO sued James and Armand Procaccianti in Superior Court over one $3 million loan. Armand died in 1995.

In 1996, with the one lawsuit still pending, DEPCO decided not to try to collect on the majority of the remaining loans. DEPCO reasoned that pursuing the loans would have cost more in legal fees and other charges than the state would have recovered, according to DEPCO records.

In December 2002, DEPCO's board voted to dissolve, saying that the majority of the panel's work was complete. DEPCO's records and any ongoing collection efforts were handed over to the state Division of Taxation.

The lawsuit had been unresolved in Superior Court since.

With the hotel sale on the table, DEPCO files related to Procaccianti were reexamined last month by the Department of Administration. An analysis showed that too much time has passed for the state to collect on 10 of the unpaid loans, according to report released by the department last week.

In 2002, a three-person committee was set up as DEPCO's successor to approve any settlement deals with delinquent borrowers left over from the credit union crisis. The committee members are state Tax Administrator R. Gary Clark, Budget Officer Rosemary Booth Gallogly and Controller Larry Franklin. It met for the first time last week to consider another delinquent borrower, and took its first vote yesterday.

Only two members were present yesterday, Franklin and Clark. Gallogly was on vacation, but two people represent a quorum, according to Stern. Gallogly was briefed on the settlement Friday, Stern said.

The deal was strongly recommended by the lawyer representing the state, Steven Richard, with Tillinghast, Licht LLP.

"We could not have achieved a better result in litigation; this settlement effectuates 100 cents on the dollar," said Richard.

The committee's decision is final since the settlement does not have to be approved by Governor Carcieri, said Jeff Neal, a spokesman for Carcieri. He added that Carcieri was pleased with the deal.

"However, the governor is also disappointed that DEPCO allowed the statute of limitations to expire on Mr. Procaccianti's other outstanding debts, making them virtually uncollectable," said Neal.

Neal said that Carcieri has some concerns about the hotel sale and he plans to talk about those issues with Providence Mayor David N. Cicilline and the leaders of the House and Senate today.

"I expect he'll make a public statement," about his concerns after the discussions, Neal said.

From The Providence Journal

[provid]

Convention Center board OKs sale of Westin to Procaccianti group

PROVIDENCE -- Despite strong objections this morning by Governor Carcieri, the Rhode Island Convention Center Authority board of directors voted 7-1 to approve the sale of the state-owned Westin Providence hotel to The Procaccianti Group. Carcieri had urged the board to reject the Cranston-based developers' bid because of their ties to the state's 1991 credit union collapse.

projo

[Cotuit]

I'm glad. I think this whole Power Block thing is going to prove to be a lot of work and the Procaccianti Group will need to have a careful eye kept on them. But we have to get this moving, there were indescretions made by Procaccianti in the past, but that was the way the city did things, they were playing by the rules of time. Let's all move beyond that and look ahead. They've made ammends on the debt that the state still has the right to go after them for.

[Garris]

In a word... Whew!! Bring on the Power Block!!

- Garris

[Cotuit]

I generally hate the Journal's politics, but I always seem to be saying right on to their editorials regarding urbanism.

Room service -- plus

Tuesday, March 1, 2005

Residents of southeastern New England should thank the Rhode Island Convention Center Authority's board for agreeing yesterday, by a resounding 7-to-1 vote, to sell the state-owned Westin Hotel to the Procaccianti Group, for $95.5 million. The revival of Providence as a major city has gotten another jump start, with benefits for the entire region.

For one thing, the price is good for Rhode Island's taxpayers; the company made the highest bid. For another, the company will spend another $40 million to $50 million to build a second, 200-room tower for the Westin. Providence is a growing city -- and the biggest between New York and Boston -- and it desperately needs more hotel rooms, partly to ensure the success of the convention center.

There's more! The company's president, James Procaccianti, and his associates plan, in a program that flows from the Westin deal, to create a "power block" of new development all the way to the Holiday Inn, in what could exceed a $700 million investment.

The Procaccianti Group's projects should help ensure that the Providence renaissance transforms virtually all of downtown.

Governor Carcieri has opposed the Procaccianti deal, because Mr. Procaccianti owed money from the early-1990s state banking crisis. But the state has failed to do what was needed to collect on some of these loans, and the statute of limitations has run out. The state's fault!

Finally, Mr. Procaccianti -- as a sign of good faith and in an effort to move the Westin deal along -- has agreed to pay off $6.53 million, to settle a lawsuit. That's fair.

Now, while expressing relief -- and excitement -- that the Westin matter is settled, let's urge the Procaccianti Group and others to fulfill the wider urban vision, "power block" and all, that they have presented to the public: creation in Providence of one of the most vibrant, prosperous, interesting and attractive downtowns in North America.

From The Providence Journal

[eltron]

I know this is late in the coversation, but what exactly is a "power block," and why has it stuck as a descriptive term for so long.

Sounds rather heavy handed and Brutalist if you ask me. Boston City Hall, anyone?

[Cotuit]

I know this is late in the coversation, but what exactly is a "power block," and why has it stuck as a descriptive term for so long.

Sounds rather heavy handed and Brutalist if you ask me. Boston City Hall, anyone?

<{POST_SNAPBACK}>

I think it's more of the numbers and amounts of uses that will be crammed into the block that brings the name. Opposite of Boston City Hall Plaza's windswept desolation.

[Cotuit]

Check this out:

Thanks to pdxstreetcar at SSP.

[eltron]

Hey!

Nice screen capture...

Interesting, our own little post-modern collection of towers. on first impression, I really like the new tower. Nice and slender, a real throwback.

Pretty cool!

[Soren]

That's a keeper, in my book. Interesting roof detail and ties into the existing building.

[provid]

Looks very nice. Reminds me of Le Ch

[Soren]

Looks very nice. Reminds me of Le Ch

[Cotuit]

Bil at A Cry For Help found this:

Good work Bil.

[Garris]

Looks very nice. Reminds me of Le Ch

[Cotuit]

I find it sad, though, that the outstanding perspective in that drawing (with the mall and Courtyard flanking the image) is taken from about where the middle of the G-Tech building will be in the future  .

<{POST_SNAPBACK}>

Something was going to have to go where GTECH is going. It will be nice to have all four corners at Francis and Memorial built. It will create a very vibrant, urban streetscape. Something needs to be done about pedestrian traffic there. It's too car oriented and too hard to cross the streets there.

I'm feeling this is a little Disney-ish though. A little too, 'this is what a city would look like if we built skyscrapers 200 years ago.' What Las Vegas would build if they were building a New England themed casino. Also note that the roofs in this rendering are brown. Unless they are planning to reclad the Westin's roof, these will have that stupid faux copper on them. I hate that!

I am very happy with the pyramid shaped roof on the tallest part of the new tower. The Westin's roofline has always struck me wrong. My boyfriend describes it to people as 'the building that looks like it has an IHOP on top.' Not exactly a ringing endorsement of it's style (at least the roofs aren't bright blue metal).

I'm torn between appreciating that they look like a set, and wishing that they looked more like seperate buildings, I enjoy variety. I'm thrilled that they won't be virtual twins. I wouldn't push for a glass and steel building, but something that looked like it came from a similar period, but not exactly like the Westin in style I might have preferred.

[Cotuit]

A rooftop restaurant would be nice.

[eltron]

I usually don't like the PoMo stuff, but this one really looks alright to me...

I keep getting images of the Singer Building (demolished) in NYC, or even better, the Wrigley in Chicago. The assemblage and massing here seems to work well, with the style and materials tying it together but the different massing providing appealing variety. We'll see. I actually liked the slightly blurry screen capture image better than the glossy rendering, gave it kinda that old-timey aged patina...

anyway, taken with all the other more contemporary things going up, I think it offers a good balance of traditional forms.

[Cotuit]

My reservations are only slight. Hands down I think the new tower looks much better than the existing Westin.

[Cotuit]

It's almost a done deal

A purchase-and-sale contract has been signed by the Rhode Island Convention Center Authority and The Procaccianti Group.

BY ANDREA L. STAPE Journal Staff Writer | April 1, 2005

PROVIDENCE -- The sale of state-owned The Westin Providence moved one step closer to completion yesterday, with the Rhode Island Convention Center Authority and The Procaccianti Group signing a definitive purchase-and-sale contract.

Now, The Procaccianti Group has until Monday to pay the authority $4 million worth of "earnest money," in order to keep the deal going forward. The company paid a $1-million initial deposit earlier this year and the remainder of the $95.5-million price tag for the four-star hotel will be paid when the sale closes, according to the contract.

The Convention Center Authority, which oversees the hotel, would like the deal to close by April 27.

The authority put the hotel on the market in November, after a directive from Governor Carcieri to get the state out of the hotel business. The state borrowed money in the mid-1990s to build the hotel, the convention center and the adjacent garages.

The Cranston-based Procaccianti Group was chosen as the top bidder for the hotel in December. After the Procaccianti Group's president, James Procaccianti, settled a 10-year-old lawsuit with the state in February by paying $6.53 million, the authority voted to sell the hotel to the company.

In addition to the purchase-and-sale contract, a development agreement to build a 200-room hotel tower on the land next to the Westin has also been finalized. Under the agreement, The Procaccianti Group must build the addition by July 7, 2007. For every month the hotel completion is delayed, the company will have to pay a $200,000 late fee, up to $10 million. The Procaccianti Group can get a six-month extension to the July date in the event of a natural disater or the "unavoidable" delay of a third party. The development agreement will be signed at the closing.

...

Continue reading at: ProJo.com

[Jenkins]

<{POST_SNAPBACK}>

I very much like the design of the existing Westin and the new tower proposal. The roofline has always reminded me a bit of the the Hotel Frontenac in Quebec (just a gorgeous city to visit, btw):

http://www.peachmountain.com/narayan/Quebe...y_Frontenac.asp

[provid]

A large truck and drill can be seen parked on the grass of the westin green. ( future site of the new tower. )

[Cotuit]

A large truck and drill can be seen parked on the grass of the westin green. ( future site of the new tower. )

<{POST_SNAPBACK}>

I heard someone talking about some rig set up somewhere when I was getting coffee this morning at Brewed Awakenings, I assumed they were talking about Parcel 2, but there was nothing there when I walked by.

I had walked by the Westin not moments earlier and didn't notice anything, probably because I hadn't had my Brewed Awakening yet.

[KRC]

Bil at A Cry For Help found this:

Good work Bil. 

<{POST_SNAPBACK}>

That looks fantastic. I love it. It will help create quit an urban space when all is said and done.

[glassandsteel]

Well here's more folks. It shouldn't be hard to tell that I stole this from the journal, here's the rest....

http://www.projo.com/business/content/proj...3x.1d7ba46.html

I believe we will probably be seeing more shots in the near future but this is a start.

I also like that parcel 2 and 9 are included in the picture, it seems as if they did us a favor. Perhaps future renderings will show more?

[CtownMikey]

this made my day!