The Shepard Company building in downtown Providence. (Christopher Shea/Rhode Island Current)
The state plans to consolidate more offices into the historic former Shepard Company building in downtown Providence after negotiating a new lease with the University of Rhode Island (URI).
URI occupies a combined 17,000 square feet on two floors of the six-story building situated between Westminster and Washington streets, with a child-development center on the first floor and laboratories on the third floor. Since 1996, the university has also managed the property.
But the lease approved in a 4-0 vote by the State Properties Committee Tuesday will allow for the Rhode Island Department of Administration to take over operations of the building starting July 1 for a three-year term.
Committee member Wilder Arboleda was not present for the vote.
The administration department has owned the Shepard building since 1993, and renovated it two years later. The Rhode Island Department of Education occupies the top three floors of the building.
First built in the 1870s — with the final addition complete in 1903 — the building was one of the largest stores in Providence, including a collection of stores and a restaurant. The Shepard company went bankrupt in 1974. Other tenants include the Rhode Island Department of Housing and the nonprofit Man Up, which provides support services for formerly incarcerated men of color.
“All floors are at least partially occupied, with some space available for swing space to allow movement during renovations and to allow for some agencies temporary needs,” DOA spokesperson Christina O’Reilly said in an email Tuesday evening.
Under the new lease agreement, URI will pay $14.85 per square foot, DOA Administrator of Real Estate Constance Beck said in an interview. Based on its existing 17,052 square feet, annual rent would be $253,222.
“It was actually more advantageous from a cost point of view to stay rather than lease elsewhere,” URI’s Director of Planning and Real Estate Development Ryan Carrillo said in an interview. “The lease rates elsewhere are more than double of what this would cost us.”
Rates for commercial office space in downtown Providence typically range from $20 to over $30 per square foot.
Carrillo said the university will convert its lab spaces in the building into offices for staff who have outreach programs in the city.
“Keeping them in and near an urban environment is critical for their success,” he said.
The child-development center will remain on the first floor at least for the duration of the three-year lease term, Carrillo added.
“That gives us the opportunity to look for other potential locations,” he said.
State Properties Committee member Gregory Schultz thanked the Department of Administration for finding a way to keep URI downtown and avoiding a kerfuffle similar to what happened with the University of Massachusetts Dartmouth’s departure from New Bedford last year.
“They have a real problem there now,” he said. “This is a big whale down there with a lot of neglect.”
Stacks of cubicle panels lie on the floor of a vacant section of the first floor of the Shepard building. The state plans to create offices for the Department of Human Services, which has offices on Holden Street and Reservoir Avenue.(Christopher Shea/Rhode Island Current)
Looking to consolidate state offices
Tuesday’s vote comes as the state works to consolidate much of its operations into more buildings it owns.
“Why are we paying rent when we have spaces like this?” Beck told Rhode Island Current.
Twelve state agencies are located in 27 leased facilities, which cost the state roughly $11.4 million in annual expenses, according to a DOA presentation to the House Committee on Finance May 16.
Danyeli Valerio, another real estate administrator for the DOA, told the State Properties Committee the state is currently renovating part of the first floor of the Shepard building to create offices for the Department of Human Services, which has offices on Holden Street and Reservoir Avenue.
The Office of the Postsecondary Commissioner would move out of its Warwick office and share the second floor of the Shepard building with the Department of Housing.
“And we are working to see which other agencies, as we are renovating each floor, to move more agencies in there,” Valerio said.
But prioritizing already-owned properties has not stopped the state from eyeing other buildings in the Providence metro area.
Last month Gov. Dan McKee sought to purchase a 210,000 square-foot former Citizens Bank loan office in East Providence for administrative offices — a building which has sat on the market for the last two years. State lawmakers opted not to include McKee’s proposal in the final budget.
At a May 14 presentation to the Senate Committee of Finance, the administration department pitched the idea of moving the Department of Environmental Management along with the administration department’s Division of Enterprise Technology Strategy and Services, the Rhode Island State Police Cyber Unit, and the Department of Human Services to the East Providence site, according to a DOA presentation to state lawmakers.
The list price for the former Citizens Bank building was $27 million, Director of Administration Jonathan Womer told the Senate Finance Committee.
This story was updated to include the lease agreement approved by the State Properties Committee.
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