Ross Commons is the first project built in East Providence’s new waterfront district, which includes Phillipsdale. Ten percent of all housing units built here must be affordable, according to the city’s planning director.

The Providence Journal / Steve Szydlowski

Plans to redevelop former industrial sites on the Phillipsdale waterfront have been slowed or put on hold thanks to the troubled housing and credit markets, but much of the groundwork is in place for a revival.

Ross Commons, a 54-unit condominium development at 200 Roger Williams Ave., in Phillipsdale, was the first project built in the city’s new waterfront district. East Providence planning director Jeanne M. Boyle said 10 percent of all housing units built in the district must be affordable.

But plans to build hundreds of new apartments and condominiums in Phillipsdale, along with retail and office space, may have to wait for a market turnaround before they proceed.

In 2004, the former Ocean State Steel complex on the banks of the Seekonk River in Phillipsdale was demolished, and plans have been under way to redevelop the site. Boyle said the city bought the 27-acre parcel for $1.8 million and entered into a development agreement with New York-based GeoNova Development Corp.

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GeoNova has nearly all its permits for its project, named East Pointe — a combination of 495 townhouses, lofts and condominiums, as well as offices, shops and restaurants –– but plans to begin construction this fall have been suspended, according to Mary Voce, executive vice president of the company.

“Definitely the market has slowed everything down,” Voce said. “Everything is kind of in suspense right now. … Developers are having trouble getting financing.”

GeoNova is still committed to the East Pointe project, and has invested heavily in it, Voce said. GeoNova has already paid for the environmental remediation of the site. GeoNova always planned to build East Pointe in phases, and still plans to carry out the project as soon as conditions improve, she said.

Besides the buildings, the East Pointe plans also call for a park near Omega Pond, road improvements to Roger Williams Avenue and improved public access to the waterfront.

Phillipsdale, the industrial heart of the Rumford section of East Providence, is named for an insulated-wire manufacturer, Eugene F. Phillips, who bought the former Richmond Paper Company complex in 1893. The complex was on 13 acres on the Seekonk River at Bourne Avenue. Rail service had come to Phillipsdale in 1874 and helped speed development there.

By 1900, American Electrical Works, Phillips’ company, had 1,000 workers producing 50 tons of product per day. Richmond Paper had built 17 three-story brick buildings between 1883 and 1887; Phillips expanded the industrial building inventory in the same style, and he also built housing for workers in the village.

In 2005, the site was sold to Essex River Ventures, which plans to build a 230-unit, mixed-use development on the property using federal and state preservation tax credits.

Essex River president and CEO John W. Fenton said the company is still planning to begin construction this fall, but only 150 units of housing will be constructed in the first two phases, and they will be apartments, not condominiums, as originally planned.

“The project is still very viable,” he said. “The capital markets nationwide are in disarray, although good projects are still being financed. Ours may still fall in that category.”

Fenton said Essex River is proceeding first with the historic-renovation part of the project, which will be financed in part with the reduced state preservation tax credit. “The numbers still work,” he said.

The third phase, which will include new construction on the waterfront, “will be what the market says it should be,” he said.

The General Assembly this year effectively eliminated the state preservation tax-credit program. No new applications submitted this year will be considered, and the credit has been cut for projects already in the pipeline, from 27.75 percent (a 30-percent credit less a 2.25 percent processing fee) to 22 percent.

Colin Kane, president of The Peregrine Group of East Providence, developer of Ross Commons, warned state lawmakers earlier this year that an attack on the credit would threaten another Rumford project, Rumford Center, a mixed-use redevelopment of the former Rumford Chemical Works plant. Rumford Center is not in Phillipsdale, but it is close by.

“We took a big hit, but we’re not dead yet,” Kane said of the project, which will include 88 apartments, 4 condominiums, 60,000 square feet of office space and 8,000 square feet of retail space. He said Rumford Center will be ready for its first tenants this fall.

Developers aren’t the only ones in Phillipsdale to have their plans altered by the faltering economy and Rhode Island tax policy.

John MacLeod, of Cranston, who bought a house at 292 Roger Williams Ave. as an investment last June, said he has been trying to sell the house since January. The asking price started at $249,000 and has been dropped to $214,000. “I haven’t even had anybody look at it,” he said.

Alan Thivierge said he and his wife have lived at 304/306 Roger Williams Ave. for 28 years, since they first got married. His sister-in-law lives in the other side of the duplex and co-owns the property, which is on the market for $365,000.

Thivierge, who is an assistant principal at a school in Seekonk, said he wants to stay in the area. He said he is preparing to retire and wants to move to Massachusetts to avoid the Rhode Island taxes on his pension, which he estimates would be $2,500 a year. “We’ll just, financially, be better off in Massachusetts,” he said. “We’re looking for a condo.”

POPULATION:

(EAST PROVIDENCE, 2000) 48,688

MEDIAN HOUSE PRICE:

(EAST PROVIDENCE, 2007) $233,000

cdunn@projo.com