The state Capital Center Commission approves the plan of the upscale hotel's developer, which must now secure about half of the $77-million project's financing.

08:11 AM EST on Friday, March 12, 2004

BY BRUCE LANDIS
Journal Staff Writer

Journal photo / Sandor Bodo A model of the hotel proposed for the Masonic Temple building, left, displays an additional smaller building, center, which would connect the hotel to the Veterans Memorial Auditorium. The hotel would lease the auditorium's underground ballroom.

PROVIDENCE -- The plan to convert the long-empty and decaying Masonic Temple into an upscale hotel took a step forward yesterday, getting the enthusiastic approval of the state Capital Center Commission.

The developer, Sage Hospitality Resources, said it hopes to start preliminary construction work next month.

In a critical area, company officials said they are close to completing the project's financial foundation. More than half the cost still needs financing, but the company says it has a verbal agreement that it hopes to formalize shortly.

The estimated cost has shifted upward, to $77 million, and the hotel plan includes 272 guest rooms, said Michael C. Coolidge, Sage's senior vice president for development. The cost had been estimated in the $60-million range. He said the project would create 130 jobs.

Developers will also enjoy upward of $30 million in tax breaks, which the company said are essential to make the project possible. State and local officials yesterday were delighted at the prospect of replacing an enduring eyesore across the street from the State House with an elegant hotel, without sacrificing the temple building.

"This is what we had in mind" when the General Assembly approved historic-preservation tax credits, said state Rep. Paul E. Moura, D-Providence, a commission member.

Sage plans to construct an additional building, between the temple and Veterans Memorial Auditorium next door, to allow more hotel rooms and reception space and provide a link between the two buildings. Sage would lease the auditorium's underground ballroom to serve as the hotel's ballroom.

Coolidge said the additional building would be "almost identical" in style to the temple. Sage's project architect, Gregory Cranford, said it would be eight stories high, shorter than the temple, and set back from the street.

The boarded-up main entrance to the temple would become the hotel's main entrance, and another existing entrance, around the corner on Francis Street, would become the entrance to a first-floor restaurant.

Sage's plans include an additional entrance, into the new building between the hotel and the auditorium, which would serve the ballroom. Its lobby would link the hotel with the auditorium.

Sage officials said the exterior of the hotel would look like the exterior of the temple, only better.

"The exterior will follow very, very closely to the original intent that the Masons had for the building," said Sage executive vice president Kenneth J. Geist.

Standing on the street, he said, "It would be almost impossible to notice any difference."

The temple building would gain an additional 2 1/2 feet, with the existing "penthouse" replaced with eighth and ninth floors, similarly set back from the parapet, Cranford said.

The mostly blank west wall of the temple, on the side away from the State House, would be removed, along with the roof and much of the interior. It would be replaced with a new wall similar to the original east wall, the one facing the State House, Cranford said.

The state Department of Transportation plans to rebuild the former Brownell Street, which runs from Francis Street to Park Street in front of the temple and auditorium, into a landscaped Avenue of the Arts with a front circle for the new hotel.

Sage's major financial partner so far is Kimberly-Clark, the household products giant, whose products range from Kleenex tissues and Huggies diapers to medical gloves and surgical gowns to business cards and letterheads. Together, Geist said, the two companies have put up $35 million.

Journal photo / Sandor Bodo Gregory Cranford of the architectural firm of BBG-BBGM reviews paperwork with Deborah Melino-Wender, director of the Capitol Center Commission, before yesterday's meeting at which the commission approved plans to convert the decaying Masonic Temple into a luxury hotel.

Kimberly-Clark is interested in the project because of the tax credits it would earn, said James Casey, the director of Kimberly-Clark's tax projects.

A major remaining hurdle is closing on a $41-million mortgage from FleetBoston Financial Corp., to cover the remaining construction cost. Geist said Sage has a verbal agreement, and hopes to close on the mortgage by early next month.

The project is getting substantial government support. Together, the state and federal governments will contribute about $30 million in historic-preservation tax credits, Coolidge said, and Sage has also negotiated a property-tax "stabilization" agreement with the city.

That agreement, Coolidge said, will limit the hotel's property taxes during a 20-year period. He said the hotel would still pay more than $5 million during that period. By contrast, he said, in its three-quarters of a century of existence, the temple "has never paid a dollar" in property taxes.

Coolidge said the local law firm of Ferrucci Russo PC represented Sage in negotiating the deal with the city; he said that Rep. Gordon Fox, D-Providence, the majority leader of the state House of Representatives, who was associated with the firm, was not involved.

Fox was recently fined $10,000 by the state Ethics Commission after GTECH, the lottery-systems giant, used the same law firm to negotiate a tax break with the city. Fox seconded, spoke in favor and voted for legislation giving GTECH a 20-year state contract a week after the company hired his law firm to work on related matters.

Coolidge said Sage has negotiated a 10-year agreement for 150 parking spaces in the Providence Place mall, and that it is looking into using state government parking lots in the neighborhood in the evening and on weekends, when state employees aren't using them.

The commission retains a number of strings on the project, making its approval contingent on issues including the final location of an electric transformer. Commission members were afraid the transformer might end up blocking the sidewalk along Francis Street.

The commission granted Sage variances from several development regulations, including permission for the hotel to be built taller than would ordinarily be allowed. But David Dixon, the commission's architectural consultant, called it "a terrific project" and said the permissions were "fully appropriate."

Sage is a Denver-based hotel management and development company that has developed and managed hotels across the United States.