The Rhode Island Department of Administration is considering acquiring a 210,000-square-foot building in East Providence from Citizens Bank for use as state offices.
Built in 1979 and renovated in 2010, the property at 115 Tripps Lane in East Providence's Riverside neighborhood contains a 60,000-square-foot, state-of-the-art data center that is “uniquely attractive as a long-term investment for state use,” according to a fiscal 2025 budget amendment submitted to the state Legislature by Gov. Dan McKee.
McKee is seeking $33.67 million in financing for the purchase. The list price was $27 million, Superintendent Jonathan Womer told the Senate Finance Committee at a state Assembly hearing on Tuesday. Womer said state officials expressed interest in the building last fall. The State Property Commission approved starting negotiations last month.
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The city of East Providence assessed the property at $16.94 million.
The proposal is far along in the budget-writing process, with state officials considering a projection of $58 million in surplus revenue for the fiscal year ending June 30 and fiscal year 2025. The House Finance Committee will meet Thursday at 4 p.m. to consider McKee's request.
Online listings show the building as vacant, but a Citizens spokesman said the bank has 600 employees, down from 900 before the pandemic.
“The building has been on the market for two years and our broker has shown the property to several potential buyers,” Rory Sheehan, Citizens' director of corporate communications, said in an email Tuesday.
“Workforce trends have accelerated since the pandemic, with more Citizens employees practicing flexible working arrangements. Given these ongoing trends, we are continually evaluating our space needs across our operational properties. If a sale were to occur, employees based in the Tripps Lane building would be based at the Johnston campus.”
The Johnston campus opened in 2018.
The facility is meant to house several state agencies that currently rent space elsewhere or are housed in dilapidated buildings. Department of Administration spokeswoman Christina O'Reilly said the department is in discussions with the Department of Environmental Management, the Office of Enterprise and Technology Strategy and Services, the Department of Public Safety and the Department of Human Services.
“The building can accommodate a variety of users depending on their operational needs. The initial potential users were determined by comparing the agency's current footprint, use and occupancy costs with the opportunities provided by Trips Lane,” O'Reilly said.
The proposed budget resolution acknowledges that there will be significant costs, but says the investment will be offset by the end of costly leases and the costs of maintaining and renovating the space as state agencies relocate. The state would save $39 million over 10 years, according to documents Womer presented to lawmakers. Most of the savings would come from eliminating the $2.5 million in annual lease payments and $500,000 in annual utility fees the state pays to the Rhode Island Department of Environmental Management, Womer said.
“The long-term savings associated with the property make financing the economically efficient option,” according to the resolution.
The total cost will be funded through the issuance of Certificates of Participation for periods up to 10 years. Based on an estimated average interest rate of 5.50%, the state's total debt service payments are not expected to exceed $44.5 million.
House Speaker K. Joseph Shekarki and Senate President Dominic Ruggerio have yet to endorse McKee's revised budget proposal, one of 19 that have been submitted so far.
“The Senate President and the Senate Presiding Officer will determine their position on this proposal pending hearings and in consultation with their respective committee chairs,” a joint email from House spokesman Larry Berman and Senate spokesman Greg Pare said.
This story has been updated.
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