Game-changing project moves forward

Pawtucket poised to be an alternative to Boston, says developer

PAWTUCKET – A residential development seen as a game changer for the city now has the important financing piece it needs to move forward.

Ken Zuckerman, the developer behind 180 new residential units off Freight Street, told the City Council last week prior to approval for his project that they took a bold stance in approving the broader new concept of 20-year tax stabilization agreements for projects worth $20 million or more.

Officials took “a bold, bold move to be able to take Pawtucket to a different level of not only development but business coming into Pawtucket,” he said. This was a long-term move that will pay off.

Pawtucket is in a perfect position, with its highway access in the northern portion of the state, as well as proximity to a coming commuter rail station and affordable real estate, to grow as a player in a spreading Boston housing market where commuters are being pushed further away due to the cost of living up north, said Zuckerman.

“We’re getting a tremendous amount of demand from the Boston and south market looking for housing in Rhode Island,” he said, adding that he expects that housing demand to remain strong.

Council members, even some who have been reluctant about tax stabilization agreements in the past, said they now believe there is a place for such deals if a project is big enough and the right fit for the city.

Zuckerman’s attorney Michael Horan said units will be divided between a trio of new four-story buildings, and the development will include a walking path, courtyard and resident park.

Council President David Moran said he sees this project as a good fit for the city and the agreement is “the right thing to do.” Some people are nervous about agreements that allow phasing in of taxes over time instead of counting the whole value of a new project at once, he said, but he believes they are right for changing times and worth doing. He said he doesn’t believe this will open “Pandora’s box” on requests, though it wouldn’t be such a terrible thing if a bunch of developers came in with projects of this size.

“We’ll take them as they come,” he said.

Councilor Meghan Kallman was the lone no vote on a resolution approving the 20-year agreement for the Freight Street Apartments across from Stop & Shop between Freight Street and George Bennett Highway.

Kallman said she previously voted for the extension of such agreements in principle because she believes they can be a useful tool in select cases. She said she had two concerns in this case:

• First, that Zuckerman didn’t commit to employing union workers, saying he makes business decisions on subcontractors that may or may not include union labor. Unions help make sure profits and benefits of large projects are spread throughout the community, “and I was deeply concerned about the unwillingness to directly commit to hiring union labor,” she said.

• And that the development was described as a “gated community” with a focus on luxury living. Once completed, rentals would be more than $1,500 per month for a one-bedroom apartment, and $1,600 for a two-bedroom unit. There is no such agreement available to the average resident, she said.

“Pawtucket’s median household income is $44,909, and 20 percent of our community lives in poverty,” she said. “This is clearly not a development aimed at the average Pawtucket resident, which is fine, and part of developing a range of options in the city. But the target audience makes me much less comfortable using public resources to support the project. Public resources, in my mind, should go toward benefiting the community as a whole. This proposal, to me, did not do that.”

Asked what public resources are going toward the project, as new taxes over 20 years will rise from $16,000 to more than $700,000, she said a better term might be a “public accommodation.”

The Freight Street Apartments will include 128 one-bedroom units of 760 square feet each and 52 two-bedroom units of 1,100 square feet each. The target is a two-year completion of the project, all done in one phase. Each building will have elevators, modern security, fitness facilities, on-site storage, and laundry rooms as part of this “state-of-the-art project,” said Horan.

The total investment here is $20.75 million in hard costs and another $5 million in soft costs. The project already has planning and zoning approvals, and most permitting is also completed.

Unique features will include dedicated entrances for those in first-floor units and private outdoor spaces for everyone. Exterior brick and glass finishes will fit with the surrounding context, said representatives for Zuckerman.

Moran thanked Zuckerman for taking a step many wouldn’t take, noting that he really seems to believe in the city and is “striking while the iron is hot” on the housing market.

“I do believe in Pawtucket, and I’ve got a substantial amount of money invested in Pawtucket, but I also believe in the product in the marketplace based on supply and demand,” said Zuckerman.

He said he’s hopeful this project will spur more investment in the area. Residential development, particularly multi-family residential, “is a very strong driving force in the marketplace” right now, he said, adding that he expects demand to grow stronger.

Council members noted the quality of Zuckerman’s other projects in the city, including the reshaping of the old Almacs plaza near Shea High School into a modern commercial and medical complex, and the renovation of the former Adams Drug facility on Sabin and Freight Streets into modern office space, among others.

Zuckerman said Pawtucket has been a “very helpful and very progressive city” when it comes to development. Without the stabilization agreement, he said, it would be very difficult to put a project like this together and have it be successful.

Councilor Mark Wildenhain said he had a blunt conversation with Zuckerman where he told him he wasn’t a big fan of tax treaties but said he would support this one. He thanked him for working with the administration, saying his contribution will be “substantially more than what we’ve done in the past.” When certain people come in looking to make this kind of investment, he said, he believes such an agreement is appropriate.

Councilor Terry Mercer said he too believes this project should be treated as unique, saying it’s a considerable investment in the city. Though he’s not typically in favor of stabilization agreements beyond 10 years, he called it a win-win for the city.

Councilor John Barry III said Zuckerman has a track record of developments that are a credit to the city, and there’s never been a complaint about his project on East Avenue. The parcel he is targeting has been vacant for decades, he said, and he’s amazed at what Zuckerman has proposed for a strip of land many wouldn’t have seen the potential in. Barry voted yes “without hesitation,” saying he expects the project to have a ripple effect.

Councilor Mike Araujo, who once worked at Almacs, said he too is looking forward to the final product here, saying it’s an “enhancement of that footprint of land.” Not to be lost, he said, is the addition of new consumers for local businesses.

Councilor Al Vitali Jr. said any developer willing to take on a project worth $20 million deserves some type of consideration. Economic development brings jobs, he said, and providing housing for the next generation will help make the city the vibrant place it once was.