Bids are expected in the next two months on the former American Express building in downtown Providence, more attractive now that it has a signed tenant.

01:00 AM EST on Thursday, February 23, 2006

BY ANDREA L. STAPE
Journal Staff Writer

PROVIDENCE -- A prominent but empty office building next to the downtown train station has generated interest from buyers and could be sold by early to midsummer, according to state General Treasurer Paul J. Tavares.

The Rhode Island pension fund, which owns the former American Express building, put it up for sale earlier this year. Already, the commercial real-estate company marketing the property, C.B. Richard Ellis, has had a "significant amount of interest" from buyers and is expecting bids on the property in March or April, according to Tavares.

The pension fund became owner of the building last fall after the previous owner filed for Chapter 11 bankruptcy court protection in Boston. The state retirement system held the $21.5-million mortgage on the building and was named official owner after an auction in bankruptcy court failed to attract any qualified bidders.

Since then Tavares, who oversees the pension fund's investments, has been looking to recoup the loss the pension fund took on the building. Last month, the fund signed a three-year lease with Fidelity Investments -- the Boston mutual-fund giant -- for $2.04 million a year. After making repairs to the building, Fidelity expects to move in 400 employees in June.

With the building leased, it has become more attractive to buyers, said Tavares, who said he doesn't know who has expressed an interest in buying the building.

Last fall, the Democratic leadership of the General Assembly submitted a bid in bankruptcy court for the building. The legislators said they were interested in turning the empty building into state or legislative offices and offered $20.9 million. But since the offer required full legislative and gubernatorial approval, it did not fit the bankruptcy court's time frame for the auction and was rejected.

Tavares said C.B. Richard Ellis will consider bids only from companies that already have financing in place.

Tavares, whose term as state treasurer expires at the end of this year, said he is optimistic that a sale will go through, if not this summer, then by year end.

"My goal is to have the property sold before I leave office. We're very optimistic," said Tavares.

astape@projo.com/ 401-277-7269