PROVIDENCE — Capital Properties Inc. has begun a historical restoration project at one of the city’s oldest industrial structures, the Steeple Street Building, once the site of an iron and hardware business that existed 183 years ago.

The original occupants, Congdon & Carpenter, an iron-warehouse company with an adjoining silversmith and jeweler, built the original three-story structure on Canal and Steeple Streets in 1826. Over the next 20 years, that company added adjoining structures to span most of the block bordered by Canal, Elizabeth, Steeple and North Main Streets, but eventually relocated.

Today, the Steeple Street Building is home to the 3 Steeple Street Restaurant and the New Rivers Restaurant, which lease their space from Capital Properties.

The company, based in East Providence, does land leasing in downtown Providence and acquired the buildings for $2.3 million in November 2007. Since then, Capital Properties has been approved for federal historic tax credits, qualifying it for a 20-percent reimbursement credit on the cost of the renovation project.

The company is not eligible for the state’s tax credit because Capital Properties did not get an application submitted in time, according to a spokesman at the state Historical Preservation and Heritage Commission. In April 2008, the General Assembly changed the program, limiting it to projects submitted before January 2008. The legislature also reduced the reimbursement rate for existing projects.

State officials say they have seen a decline in applications from developers seeking tax credits to restore historic structures. Capital Properties said it decided to go forward with its $2.1-million plan to restore the building’s exterior elements to the way they existed during the Federal period, which ran from 1790 to 1850.

“It was happening while we were purchasing this,” said company vice president and engineer Todd Turcotte. “We’ve wanted it for years and it’s something we were dedicated to doing. The tax credits are great. Twenty percent is better than nothing.”

The design work at the roughly 18,000-square-foot property is being done by Ed Wojcik Architects in Providence. The project will include replacing the roof, restoration of the original windows and replacing the mortar between the bricks, a process called “repointing.” A major part of the restoration entails bringing back the double barn doors that front on Canal Street to create a new façade for the 3 Steeple Street Restaurant. The building also will be made wheelchair accessible and brought up to current fire codes.

New England Construction Co., based in East Providence, will do the work, which is expected to be completed in six months.

“We are doing the core of the building and all the exteriors …to bring it back to historical significance. The two-door entrance, that’s probably the most significant aspect,” said Turcotte, who has 15 years experience doing historic restorations.

The New Rivers Restaurant will expand into the adjoining structure at 9 Steeple St.

Capital Properties [CPTP:OTCQX] owns 18 acres in downtown Providence and leases 11 parcels to various companies. A portion of the land it owns and leases is the Capital Center and its clients include GTECH, Citizens Bank and Lamar Advertising. The company also draws income from petroleum storage in East Providence. Capital Properties’ annual revenue was roughly $6.8 million, according to its most recent report. The Steeple Street Building is listed on the State Registry of Historic Buildings.

lsparks@projo.com