Heritage Harbor – 1999 to 2008
Financial support for the state history museum concept came first from Narragansett Electric, then from the Providence Journal Co., the Rhode Island Foundation, Verizon, Textron, Fleet Bank, the government of Portugal, and Nortek, plus hundreds of generous gifts from local foundations and individuals. The project also received federal, state, and city museum planning and construction grants that enabled HHM to carry out additional environmental abatement on the decommissioned building and to stabilize the building’s shell thereby preserving it.
In 2000, a statewide effort to gain voter approval for a $25,000,000 appropriation to build-out the museum and library was narrowly defeated. A second effort in 2002 for $5,000,000 to create exhibits and make site specific improvements won voter approval. Because of the loss of the larger bond issue, the Heritage Harbor Board felt it prudent to look for a development partner. Following an RFP process, the Heritage Harbor Corporation sold the property to Struever Bros., Eccles, and Rouse of Baltimore (SBER) in exchange for a promise by SBER to provide it with a 55,000 square feet “turn-key” museum condominium. The remainder of the building, which SBER optimistically renamed “Dynamo House,” was to be developed into a hotel and other commercial purposes. Certain building rehabilitation tax benefits deriving from the construction of the museum condominium was to accrue to SBER’s benefit as well. The property was transferred to SBER in 2007 encumbered by a $6 million mortgage to HHM, deed restrictions, an easement, and corporate and personal guarantees — all designed to secure the completion of the museum’s base condominium unit containing a turn-key museum.
In its decision to work with SBER, the Heritage Harbor board of directors relied on SBER’s excellent record of previous performance. The company was a major developer of Baltimore’s famed Inner Harbor and was engaged in such successful local factory rehabilitation projects as Royal Mills in West Warwick and Rising Sun Mills on Valley Street in Providence.
In 2008, claiming that the unwise and counterproductive reduction of anticipated state tax credits by the Carcieri administration made the project untenable, Dynamo House LLC, the single purpose entity SBER created to take title to the property, stopped construction and departed from the site. This decision left the museum project stranded and put Struever in default of the transfer agreement’s covenants and obligations. At that point HHM had expended about $800,000 of its 2002 bond money for such approved purposes as historical data collection and exhibit planning.