Rhode Island news
08:17 AM EDT on Wednesday, June 23, 2004
Panels
vote to put casino on ballot / Casino's
possible neighbors vow to fight -- or switch / Carcieri
statement on new casino deal Plan to better monitor health insurers advances Panel
OKs state financing for hotel Senate
votes tomorrow on budget Housing
bill overwhelmingly passed
The measure would force the Convention Center Authority to help finance
a private project advanced by developer Vincent Mesolella Jr., a former
legislator from North Providence.
PROVIDENCE -- A controversial bill that would force the Convention
Center Authority to subsidize a downtown hotel with $17 million in state
bonds breezed through the House Finance Committee yesterday.
Among the 13 legislators who attended the hearing, only two, Victor G.
Moffitt, R-Coventry, and Carol A. Mumford, R-Cranston and Scituate, cast
dissenting votes.
In a brief exchange before the vote, Moffitt asked House fiscal adviser
Michael O'Keefe whether he could ever recall the House Finance Committee
approving legislation that "forced" the Convention Center Authority to
finance a private project.
"I honestly don't recall one way or the other," O'Keefe said.
The prime benefactor of the bill is developer Vincent Mesolella Jr., a
former legislator from North Providence, who has been trying to
transform the site of the vacant John E. Fogarty Building at 111
Fountain St. into a hotel with about 250 suites. The proposed hotel,
which would cost about $52 million, would be connected to the convention
center with a walking bridge over Sabin Street.
David A. Duffy, chairman of the Convention Center Authority, has been a
leading critic of the legislation, arguing that it could jeopardize
another major project: renovating the Dunkin' Donuts Center with about
$25 million in state bonds. The Dunk is the largest venue in the state
for concerts and sporting events.
Yesterday, Duffy was dismayed at the news that the legislation had
passed House Finance.
"It's the most egregious land grab since Attila the Hun," he said.
Two weeks ago, the board of the Convention Center Authority deadlocked
4-4 on the proposal, meaning that it did not endorse the project.
Despite the tie, the General Assembly could still approve the financing.
A lawyer for the Providence Biltmore hotel also addressed the Convention
Center Authority board, saying that the state-subsidized Mesolella hotel
could be the death knell of the Biltmore, a landmark in the city's
downtown for more than 80 years.
The lawyer said the Biltmore may have to be transformed into
condominiums or residential apartments.
Governor Carcieri, who appointed Duffy to the Convention Center
Authority, has also remained steadfast in his opposition to state
financing of the proposed hotel.
Yesterday, spokesman Jeff Neal said the governor believes that this is
another bad deal for Rhode Island taxpayers being rammed through at the
last minute; that the developer has still not come forward with any
financial commitments; and it is not clear that any due diligence has
been performed on this $17-million project. By ordering the Convention
Center Authority to issue this new debt, Neal said, the governor
believes the General Assembly is turning the regular process on its
head. The Convention Center Authority's job is to solicit bids for
hotels and to make recommendations to state government.
Carcieri has also questioned the 2-percent developer's management fee
that Mesolella would collect if the hotel is built.
Mesolella has argued that the fee, which often reaches 6 percent, is
customary for any major development project.
Yesterday, Representative Mumford questioned O'Keefe, the house finance
fiscal adviser, about Mesolella's developer's fee. O'Keefe said he did
not know what the former legislator's cut would be.
On Feb. 14, 2002, the Providence Redevelopment Agency named Mesolella's
firm, Capital Hotels LLC, as the "sole developer" of a hotel on the
property across the street from the Convention Center.
In recent testimony before the House Finance Committee, Mesolella
testified that he has the rights to the property until he cries "uncle."
James McCarvill, executive director of the Convention Center Authority,
said the Providence Redevelopment Agency could break the agreement if a
better offer came along. So far, no one has stepped forward with a
proposal to privately finance a hotel on the site.
Mesolella's proposed hotel would feature 18,000 square feet of meeting
space, a 150-seat restaurant, pool and cafe. The proposed opening date
is April 2006.
The legislation now advances to the floor of the House of
Representatives for a vote, which could happen sometime tomorrow. If
approved by the House, the legislation would move to the Senate for
final passage. Carcieri could veto the bill.
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