WHO WOULD ARRANGE for a family festival on industrial property in the middle of a working port?

A gregarious developer (and sometime contributor to these pages) named Patrick Conley would, it seems. And that speaks volumes about Rhode Island’s glaring failure of leadership in managing one of its most valuable assets.

Last week’s blowup in Providence over the Puerto Rican Cultural Festival has everything to do with the confusion and chaos surrounding ports in the Ocean State.

Organizers won last-minute approval from Providence officials to hold their waterfront festival at the Providence Piers site owned by Mr. Conley. But it was an iffy thing. The land, zoned industrial, was never intended to be used for festivals. That did not seem to bother Mr. Conley, who had hosted a series of concerts, festivals and events on his property without first winning permission from the city.

All of this has created a fair amount of chaos in the neighborhood. With no provision for parking, people have been leaving their cars in no-parking zones along Allens Avenue, and children — dazzled by the sight of carnival rides, and oblivious to the danger — have been crossing four lanes of traffic on one of Providence’s busiest arteries. I hate to think what might happen before the city stops it.

Neighborhood businesses, meanwhile, are complaining about clashes with people trying to use their private lots to park for Providence Piers events. Even the owners of Cheaters, one of the strip clubs in the midst of the Allens Avenue sex district, griped.

The brouhaha last week stirred tremendous ill will. Initially, the city denied the festival a liquor license for the event. Festival promoters said they needed to sell liquor because Budweiser was its chief sponsor — and without its sponsorship, the festival could not cover the cost of police coverage and the like. City officials denied the liquor license on the grounds of public safety.

“We don’t know how many people are going to show up, we don’t know what exactly the parking situation is going to be, we don’t know exactly what the police are going to deal with,” said Rhode Island House Majority Leader Gordon Fox, vice chairman of the Providence Board of Licensing.

Festival organizers cried racism, questioning why a Puerto Rican festival was denied a license after other festivals, such as a WBRU concert just the weekend before, were allowed to serve alcohol. Hours before the event was to begin, the board reversed itself and allowed liquor sales.

What a mess.

But there’s a much bigger picture here than a squabble among the city, a neighborhood and festival promoters.

The real question is: What do these festivals have to do with a working port? The answer: Nothing.

Mr. Conley has been trying to inject non-industrial uses into the port area. His neighbors fear that the city this fall, at his earnest urging, will change the zoning of the area to permit the construction of commercial buildings, or even residential condominiums, in the area. Such changes could bring enormous political pressure to rid Allens Avenue of the “ugly,” grungy (and high-wage) activities of a working port, replacing them with condos, marinas and other “pretty” (and low-wage) uses that make politicians and developers happy.

That would be a terrible way for Rhode Island to go. Rather than consistently undermining growth, the Ocean State should be maximizing its potential for jobs creation through its ports, one of its great competitive advantages.

Consider seven Allens Avenue-area businesses alone: Promet Marine Services, Sprague Energy, Providence Steamboat, Narragansett Improvement, Walco Electric, Philip Services Corp. and J. Goodison Company. They have a combined payroll of $20 million. The Providence port area accounts for 372 high-paying jobs (averaging nearly $60,000 a year, not including benefits), with annual business sales of $294 million. Landlocked states would kill for such jobs.

Imagine if Rhode Island’s leaders had the drive and gumption to fully develop our ports, emulating East Coast states that have reaped tens of thousands of jobs through the worldwide boom in trade. Sadly, Governor Carcieri and others have let NIMBYs and the summer boating crowd exert virtual veto power over such a golden opportunity, particularly at Quonset Point. No wonder the state’s unemployment rate is so high! But could the state’s battered economy, and the clear need to boost revenues to pay for government, prompt them to reconsider the issue, in light of the interests of all of the citizens, rather than of the wealthy and noisy few?

What Rhode Island needs is what other East Coast states enjoy: a vibrant port authority, focused on developing ports instead of shrinking them, and making sure that ports are used to serve the economic interests of the whole state. Right next door in Massachusetts, which is growing jobs (in sharp contrast to Rhode Island), ports are treated as a vital resource. The state protects working waterfronts and gives the government authority to expand them, and so increase their business.

Rhode Island is known as the Ocean State for a good reason. It should be maximizing its potential to reap the benefits of booming international trade. There are plenty of other places than working ports to build condominiums or office towers — and, yes, hold waterfront carnivals and festivals.

Edward Achorn is The Journal’s deputy editorial-pages editor ( eachorn@projo.com).