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Where will people live?
The clash over Rising Sun Mills reflects a squeeze on artists, but Rhode Island faces a larger housing crisis
BY IAN DONNIS

Upscale: The Jefferson at Providence Place, where average rents will approach $2000, symbolizes the influx of luxury housing in Providence / Photos by Peter Goldberg

For critics, the plan to redevelop the former Providence and National Worsted Mills in Olneyville is about as natural a form of neighborhood growth as a sudden landing by a massive alien spaceship. But for proponents of the envisioned Rising Sun Mills, which is poised to offer 151 loft-style apartments, 100,000-square-feet of office space, and an ecological small-business incubator, the $45 million project represents a much-needed source of investment and stability in one of the most economically disadvantaged areas in Rhode Island.

Those critical of the development, mostly young artists and activists, cherish Olneyville's downscale polyglot funk and fear that an influx of upwardly mobile types will raise housing costs and spark gentrification. The developers, led locally by the Armory Revival Company, cite additional housing as an antidote for rising rents and they describe the initiative as a welcome alternative to the continued deterioration of the neighborhood's 19th-century mill buildings.

Rising Sun is further evidence of how Providence's once-forgotten industrial neighborhoods, which have provided fertile ground for vibrant underground art scenes like Fort Thunder, are facing increased interest from developers. The tide of change emanates from the ongoing construction of a shopping plaza in Eagle Square -- where Feldco Development was convinced to preserve a few of the dozen or so former classic mill structures only after a spirited response from the community. Rising Sun, located at 166 Valley St., continues the spread of development along the time-tested path of the Woonasquatucket River and toward Olneyville Square, a focal point of the local underground art and music scene.

Struever Brothers, Eccles & Rouse of Baltimore, the lead developer of Rising Sun, has a well-deserved reputation for helping to reinvigorate economically blighted neighborhoods, and Bill Struever's firm became in involved in the project after emerging as a possible alternative developer for Eagle Square (see "Crunch time," News, August 2, 2001). Given all this, it's slightly ironic that Struever Brothers and the three partners of Armory Revival, who helped to resuscitate the Armory District before branching into more upscale developments, are drawing criticism from a small band of idealistic critics.

Sign of change: Feldco’s development marked the start of pressure in once-forgotten industrial neighborhoods

Even some of those who cite the multi-million dollar investment as an undeniable positive for Olneyville -- where 41 percent of families live in poverty, according to the 2000 Census, compared to a citywide average of 24 percent -- describe Rising Sun as a potentially mixed blessing that could impact the largely Latino neighborhood in unexpected ways. Rents at Rising Sun will run from $600-$1400 -- with most between $700-$1100 -- a far cry from the luxury housing sprouting in pockets around town, but not exactly housing on the cheap, either. The development comes as Olneyville is showing some promising signs of improvement, including development of the Riverside Mills Park and the Woonasquatucket River Greenway.

Richard H. Godfrey Jr., executive director of the Rhode Island Housing and Mortgage Finance Corporation, a self-supporting agency that connects Rhode Islanders with affordable housing, says Olneyville has a long way to go before gentrification will become a serious issue, and he believes that Rising Sun Mills will help to stabilize the neighborhood. "They [new residents] will demand police protection and, unfortunately, higher-income people are listened to more than lower-income people in demanding city services," Godfrey says. Providence Mayor David N. Cicilline is an enthusiastic backer of the development, describing it as a long-term benefit for the neighborhood, a view shared by Mike Solomon, owner of Wes' Rib House and president of the Olneyville Merchants' Association.

Regardless of the merits, it's still no wonder that artists like Brian Chippendale, the drummer in Lightning Bolt, who relocated to a mill building in Olneyville Square after being displaced by Feldco's project, feel under the gun. "It seems like someone dropped a rock on Eagle Square and it's coming down toward us," Chippendale says. "It used to be in Providence, you could live really cheaply and make art. What this is going to do is to weed out a lot of artists who are just starting out."

Frontline: Critics fear that development will replace organic growth in Olneyville with gentrification

The steadily increasing difficulty of finding decent, affordable, and suitable space in Providence has led some artists (and arts organizations) to set their sights for Pawtucket, Fall River, Massachusetts, and other destinations. The situation is so serious that AS220, the nonprofit arts organization, is exploring the possibility of buying another downtown building. "It is getting very expensive to live in the city," says artistic director Bert Crenca, who sees Rising Sun as having a mixed impact. "I'm hearing that on a daily basis -- `What's going to happen? We're all going to get priced out.' "

The concerns expressed about affordability are symptoms of a housing crisis that extends far beyond mill buildings and the particular needs of artists. "Housing costs in Rhode Island are just out of reach of the common family," says Godfrey. "Rising Sun is not going to drive up the rents. Rising Sun is a symbol of what is happening. The upward pressure [on rents], the increased demand [for housing], allows Rising Sun to happen."

The cost of housing, in fact, has become so high in two-thirds of the nation's metropolitan areas, according to the Center for Housing Policy in Washington, DC, "that people who provide the bulk of services in these communities -- teachers, policemen, firemen, laundry, and restaurant workers -- cannot themselves afford to live there." And while homeownership is seen as a cornerstone of the American dream and a critical part of building wealth, blacks, Latinos, and city residents own homes in far lesser percentages than white suburbanites, according to the Fannie Mae Foundation.

Although the housing crunch is a national problem, it is particularly serious in Rhode Island, a tiny state with a growing number of residents, enhanced stature as a place to live -- particularly for commuters priced out of the more exorbitant Boston area, who can now hop on the high-speed Acela -- and a meager amount of land for development. These are some of the factors that help to explain why the average statewide rent for a two-bedroom apartment jumped to $854, from $613, over the last four years, and Rhode Island had the greatest increase in home prices over the last year (and the third highest nationally over the last two decades).

Meanwhile, little new housing is being built because of anti-development policies, the high price of construction (it costs as much to build a home in Olneyville as in East Greenwich), and the sharp preference of cities and towns for commercial growth that contributes to the tax base while placing less demand on municipal resources.

Investment: Proponents like Dupre and Van Noppen cite Rising Sun as a much-needed source of fresh vitality and economic growth

It certainly doesn't help that the federal government has retreated from funding the development of affordable housing. Although the Federal Housing Act of 1949 and federally backed mortgage programs made homeowners out of millions of people who would have otherwise remained among the rent-poor, according to the New York Times, the Reagan administration gutted housing programs. "As a result, the housing shortage facing the country today is nearly as severe as the one that spurred Congress to act just after World War II," the Times editorialized last year. The Bush administration has evidenced little interest in changing the situation.

At the lower end of the market, overcrowding has grown by 34 percent over the last decade, Godfrey says. Homelessness is up, particularly among families (see "Mean streets," News, January 17), and the situation is expected to get worse since the typical price for a triple-decker has more than doubled over the last two years -- to more than $200,000 -- and the increased costs will be passed down to tenants. Unless Rhode Island's economy goes to pieces, Godfrey says, the logical conclusion is that "housing here is going to get progressively less affordable."

ACOMPLEX of 330 luxury apartments -- where the typical rent will hover close to $2000 -- is taking shape on a five-acre triangular parcel of land bounded by the rear of the Providence Place Mall and Kinsley and Harris avenues. For now, the partially built structure is a mass of plywood and construction wrapping enclosed by Jersey barriers. By the time it is complete next winter, the Jefferson at Providence Place will include a fitness facility, pool and hot tub in the courtyard, and a media room with large projection television and theatre-style seating. Although some wags question who would want to live in such a contrived setting, JPI of Irving, Texas, one of the nation's largest builders, certainly wouldn't be building the Jefferson if it wasn't confident about earning a lucrative return.

"We all love Providence," says Heather Culp, a senior development associate for JPI, who predicts that the complex will attract a mix of empty-nesters and affluent young adults. "We are definitely impressed by the developments it has made. It was just a great opportunity to be close to downtown."

Although a monthly rent of $2000 seems better suited to midtown Manhattan than the former site of the Silver Top Diner, an underserved market for high-end housing has triggered plans for a handful of other luxury developments in recent months, including 83 condos in Fox Point, envisioned apartments in the Capital Center, and condos across Fountain Street from the Providence Journal Building. Across town, Rising Sun marks the most ambitious project for the Armory Revival Company, whose recent efforts include upscale condos on Thomas Street (one of which sold for $1.2 million) and on Westminster Street, near the Providence School Department. Providence, a city long known for its unstudied idiosyncrasy and relatively cheap digs, is increasingly going pricey.

Some observers, including the anarchist newspaper the Nor'easter, attribute the upscale boomlet to exploitation and bald-faced speculation based on the cold calculus of indicators like the "bohemian index" and "risk oblivious renters." Yet even some of those who question the appeal of the JPI development don't see an increase in upwardly mobile residents as a necessarily bad thing for Providence. "I think in the long run, it should prove to be a positive," says architect Steve Durkee, since such residents can help to support restaurants, cultural activity, and other desirable elements of city life. At the same time, Durkee, who worked last year with the Olneyville Housing Corporation to develop 32 units of affordable rental housing -- which attracted more than 600 applications -- knows how the lower end of the market suffers from a woefully inadequate amount of attention.

Ownership is the key to maintaining affordability for artists and non-artists alike, and Providence offers several noteworthy models. One of the best is AS220, which has offered affordable housing for 11 residents -- and contributed to the city's heightened profile -- since the arts organization acquired its Empire Street building in the early '90s. The Dirt Palace in Olneyville Square used a low-interest city loan to help create a similar combination of residential and performance space for artists. And in January, Cicilline and other officials hailed plans by the West Elmwood Housing Development Corporation to convert the abandoned Rau Fastener complex on Westfield Street into a blend of affordable housing and lofts for artists.

Such exemplary efforts, however, represent just a tiny slice of overall housing.

While Rhode Island Housing aids the development of about 300 units of affordable housing a year, Godfrey, the agency's executive director, says, "We could probably use about 2000 affordable units a year." And although AS220 has become a Providence institution, the organization benefited greatly from the dire shape of downtown in the early '90s, and even with a large loan and strong support from bankers, former mayor Vincent A. "Buddy" Cianci Jr., and other backers, it still took two years in predevelopment to bring the deal together. "People were desperate to see something positive," Crenca recalls. "Because there wasn't a lot going on downtown, the city had a very strong interest in seeing this happen."

The disparity between housing needs and housing supply illuminates a fundamental reality: laissez-faire economics offers a great deal of incentive -- namely a far greater amount of profit -- to create high-end housing, and virtually none at all to build affordable housing. "The reason that groups like us exist is because the market wouldn't do it," says Frank Shea, executive director of the nonprofit Olneyville Housing Corporation, which, like other community development corporations, takes the lead in developing affordable housing.

One bright spot, according to housing specialists like Godfrey, is represented by Cicilline and Governor Donald Carcieri, who are seen as more supportive on housing issues than their predecessors. Carcieri recently vowed to include $5 million in the 2003-2004 budget for the creation of 100 units of low- and moderate-income housing -- a stark contrast to Lincoln Almond who supported a similar effort only after protests by clergy. Although short on specifics, Cicilline pledges a comprehensive approach on housing, including considering linkage -- requiring developers to require affordable units as part of a development -- and looking at ownership opportunities for artists.

Still, the enormity of the challenge can be seen in how the collective exemption of US homeowners for mortgage interest and property tax deductions is five times the entire budget of the US Department of Housing and Urban Development. Viewed another way, even though Rhode Island Housing has helped to steer about $6 million in affordable housing into Olneyville over the last few years -- developing about 50 units -- the level of new construction pales, Godfrey says, in comparison to the amount of housing that has been demolished in the neighborhood during the same period.

MORE THAN 600 people, artists and well-heeled suburbanites alike, gathered into one of the large lofts at Rising Sun Mills for the winter bash of the Providence Preservation Society on Saturday, January 25. Although some cited the party -- a largely white celebration in a predominantly minority neighborhood -- as emblematic of what's wrong with Rising Sun, it was also a resounding success in focusing attention away from the preservation society's East Side base. "Preservation doesn't have to be a dirty word for people of modest means," says conservationist Jennifer Cole Steele, who served on the event committee for the bash. If it takes a couple of "squeaky clean" events to raise the citywide profile of preservation, she says, so be it.

The competing views toward the PPS bash seem typical of the current dissonance between Armory Revival and its critics -- as well as the larger challenge of revitalizing a poor neighborhood without gentrifying it.

Rising Sun's most vociferous critics, who were informed about the proposal just a few days before it was presented to the city Plan Commission, remain stung by what they see as a lack of public participation in the process and the absence of dialogue with the developers. "Overall, it seems like the project was created in a vacuum and there was no intention to integrate it into the fabric of the community," says Adriana Young, executive director of English for Action, a nonprofit that works with immigrants in Olneyville. There's suspicion, too, about Armory Reviva's acquisition of nearby property and a fear that it will be more difficult for young artists to buy lofts in the area as a result.

Mark Van Noppen and B.J. Dupre, who, with Barry Preston, constitute Armory Revival, say they didn't anticipate criticism from members of the local arts underground and focused their earliest informational efforts on the dozen or so businesses and artists being displaced from the mill complex. Noting that the wide swath of land from Olneyville Square to Atwells Avenue, between the Woonasquatucket and Route 10, produces less than $800,000 in annual tax revenue, Van Noppen says, "It's like a giant whole in your wallet. We want our investment to be something that's going to add to the long-term value of the community." Dupre adds, "It's really about building community," citing an unmet demand for loft apartments in the city, as well as plans for Rising Sun to include office space and the ecological small business incubator being organized by Sara Struever, daughter of Bill Struever, whose goals include gallery space, a media center, nonprofits, and community development organizations.

Van Noppen says it's too late to enter into in a dialogue with critics about plans for Rising Sun (the city Plan Commission seems likely in coming weeks to approve the primary plan for the development, the second-step of a two-part approval process), but the developers say they're committed to creating affordable housing elsewhere in Olneyville and, if environmental problems don't prove too onerous, redeveloping an adjacent mill complex on Valley Street as lower-priced unfinished lofts for artists.

If Armory Revival has been good for the Armory District, there's little doubt that Providence has been good for Armory Revival, which has grown to enjoy $8 million in annual revenue. Some people look askance at the way the company was able to sell a loft in its building at 755 Westminster St. -- hardly a high-rent district -- for more than $400,000. But the developers have also proven effective in achieving something -- introducing a greater degree of economy diversity in low- and moderate-income neighborhoods -- that is widely seen as an important part of good development. In the same way, a new Armory Revival development on Pearl Street is due to include 18 lofts for sale and 36 apartments, with 20 percent of the housing at affordable prices, thanks to a program backed by the Providence Preservation Society's Revolving Loan Fund.

Godfrey, the director of Rhode Island Housing, preaches the gospel of mixed-income, higher-density housing when he talks with legislators, labor, clergy groups and others, emphasizing how housing growth is closely linked to economic growth. Indeed, the US Commerce Department emphasizes that every government dollar dedicated to housing leverages nine other dollars. New England's old mill owners clearly understood the link between housing and labor supply, Godfrey says, since they built worker housing in proximity to the places where the workers toiled.

But the idea of building higher-density housing -- mixing in townhouses near single-family homes in suburbs, for example, goes sharply against the grain in a culture where post-World War II zoning ordinances make it difficult to build neighborhoods with the sense of community that many people crave. As a result, Rhode Island hasn't been adding sufficient housing to accommodate the roughly 10,000 new jobs added in the state for each of the last two years. Says Godfrey, "We need everyone to realize that we're in this together."

Rhode Island, with its many old villages, is potentially well-suited for the kind of housing growth envisioned by Godfrey. In a white paper, the National Trust for Historic Preservation last year cited preservation in older and historic neighborhoods as "the missed connection" in affordable housing, noting that it's far cheaper to repair existing housing than to build new homes. As it stands, though, 6.3 million housing units were lost over the last three decades from the national inventory of older and historic homes. "Certainly, not every one of those houses could or should have been saved," the Trust noted. "But even if half were retained instead of razed, the picture today would be much different for the millions of Americans inadequately or unaffordably housed."

Offering subsidies for artists is sometimes a controversial subject, but considering the benefits that Providence and Rhode Island have gained from marketing themselves as bastions of the arts, ensuring the presence of artists is a smart forum of economic development. And although even established arts organizations face difficulty during lean economic times, it's worth noting that it's the underground arts groups that have attracted some of the most enthusiastic out-of-town notices during recent times. The work of the art-music collective Forcefield, for example, previously included in the Whitney Biennial, was featured on the front of the Sunday arts and leisure section of the New York Times a few weeks ago. Similarly, Lightning Bolt received an enthusiastic review in the Times last year, and the alt-rock heroes of Sonic Youth performed a symbolic passing of the torch to the group during a recent gig at Lupo's.

Godfrey still tends to get quizzical looks when he speaks about the importance of coming to terms with Rhode Island's housing crisis. Although he has no illusions about the difficulty of changing the situation, he hopes that publicity about growing homelessness -- and another kind of realization for suburban families that own their own homes -- will spark change. "The irony is that those of us who own our homes get richer every day," he says. "To a certain extent, we like the way it is. Yet," when it comes to buying a home, "our kids can't afford to get in."

Ian Donnis can be reached at idonnis[a]phx.com.

Issue Date: February 7 -13, 2003