How Much to Lure High-Tech Company into Low-Tech Building?


When I hear that Internet innovator PayPal is considering a move into the Providence Superman Building — which has been vacant for so long, if I recall correctly, in part because it lacks capacity for the technology of modern companies — I can’t help but wonder what the dollar amounts will be.  Here are Ted Nesi and Dan McGowan:

Matt Sheaff, a spokesman for the R.I. Commerce Corporation, declined Wednesday to comment specifically on whether PayPal is looking at the building but confirmed that state officials remain in active discussions with the company about potentially expanding into Rhode Island. …

One sticking point on a PayPal-Superman deal could be cost. [Owner David] Sweetser has repeatedly argued the building needs significant renovations that cannot be funded without government assistance.

Oh, and don’t forget: “Any transaction would also likely require a break on Providence property taxes, which are among the highest in the country for commercial real estate.”

So Rhode Island’s economic development strategy is to create an environment in which businesses have difficulty operating and “iconic” old buildings can’t find non-government investment to bring them up to date.  Then the governor goes out looking for big companies that would represent, as the article puts it, “a major coup” and promises to give them money taken from the  residents and businesses who are still able to manage to survive in the state, somehow.

This approach may do wonders for political insiders and corporate big-wigs looking for crony relationships.  For the rest of us — particularly those of us struggling to get ahead in the world — not so much.

  • Rhett Hardwick

    I am fairly certain that the only thing which prevents the “market” from bringing the price down, is the relative certainty (not just here, but everywhere) that the government will assist in the sale. It would take forever to do a cost analysis, but huge costs are obvious. All new electricity, A/C and duct work, certainly elevators and probably structural issues to create the “cubicle farms” now required. If you have never been there, it is hard to believe how obsolete it is. I remember visiting a larger law firm there in the 80’s. One had to go from floor to floor to find different partners (one was a significant John Bircher)

  • Raymond Carter

    Corporate welfare is the last refuge of the dying blue state/municipality.

    • Rhett Hardwick

      While I couldn’t agree more that corporate welfare is an admission in itself that taxes and costs are too high, it is now part of the game. It seems that every state, red or blue, is eager to do this. Look at the deals BMW, VW and Honda got in the very red South. It has become so common place that if you don’t get a tax treaty, or some other consideration, you think that you left some money on the table.