PAY DIRT

Developer plans to turn R.I. rock quarry into mixed-use site with value megamall

By Dave Bodamer

For 15 years Nicholas Cambio operated a quarry in Coventry, R.I., but he always knew he would do something else with the site. Piece by piece, he bought the surrounding land until he had control of nearly 480 acres spanning 2.5 miles east-to-west and 1.5 miles north-to-south. Now, with the quarry closed, he’s determined to turn the site into a massive mixed-used development called the Centre of New England, anchored by 2.5 million square feet of retail that includes a 1.4 million-square-foot value megamall.

The Centre of New England, Coventry, R.I., will house a 1.4 million-square-foot value megamall with an international theme. Shoppers will be able to ride gondolas in the mall's Venice section, see below.

"What we’re doing here is unique," said Cambio, principal of Universal Properties Group, West Warwick, R.I. "People will be able to live, eat, work and play here. The only thing we don’t have is a cemetery or a hospital. You have to be born somewhere else and die somewhere else, but you can do everything in between right here."

Other components of the project include approximately 1,000 apartment and condominium units, three hotels — including a 128-room Hampton Inn and a 296-room Marriott — and 3.5 million square feet of light industrial and office space. Universal is set to break ground this year with Phase 1 of the project expected to open next summer. The other 1.1 million square feet of available retail space will be sold off as outparcels.

"We’re calling it a city within a town," said Amy Higgins, director of leasing and marketing for Universal. "We’re putting a whole community on one site within Coventry."

The project will cost between $600 million and $1 billion to build. Cambio said he expects sales to exceed $500 per square foot at the mall — for a total annual revenue of $700 million — to go along with an additional $300 million raised from the outparcel retail development.

Universal has never undertaken a project of this scope, and the process has been a learning experience. In the past it has developed big-box projects and restaurants. The center will be split into three basic geographic zones, each of which will be broken down into different cities. The zones will be Europe, Northern Africa and New England. The cities will include St. Petersburg, Russia; Athens, Greece; London; Paris; Venice, Italy; Casablanca, Morocco; New York City; and a New England city that is as of yet undecided but will be either Newport, Providence or Boston. Facades above each store will represent the different regions. The center will employ a faux sky ceiling, similar to that in the Forum Shops at Caesars Palace in Las Vegas.

Another important component of the mall will be the different kinds of entertainment interspersed throughout the main corridor. A number of small stages where jugglers, mimes, singers and other performers will be featured with continuous shows throughout the day. In the Venice section of the mall, customers will be able to ride gondolas through a short canal. The emphasis on entertainment will carry over into the tenanting of the mall as it will include a 166,000-square-foot recreational zone containing possible tenants such as a bowling alley, a pool hall and a water theme park. At press time, Universal would not reveal many of the tenants it hopes to attract, saying that it’s still working on leasing deals. One confirmed tenant is a Levi’s/Dockers Outlet. "We’re interested in the [I-95] corridor especially where it leads through Rhode Island," said Bruce Goldstein, senior vice president of real estate for Levi’s/Dockers Outlets. "The center will be strong in visibility on I-95 É Rhode Island has a good population base."

Interest in the project among retailers has been high, according to Universal, which said it participated in 86 meetings during Spring Convention in Las Vegas. The developers are hoping to draw not just from the local area, but also from travelers on Interstate-95, which will pass close to the mall. The team has identified a 20-mile radius as the main market, but does expect to pull shoppers from a larger radius as well. It is 13 miles south of downtown Providence and within an hour’s drive of Boston. More than 11 million people live within a 100-mile radius of the center. The company is also working with Mohegan Sun, Uncasville, Conn.; and Foxwoods, Mashantucket, Conn., casinos to set up regular bus routes to and from the destinations. Coventry is about 40 miles away from both casinos.

To help draw attention to the project, Universal will build three towers that are 125 feet high, 150 feet high and 175 feet high, all of which will be 56 feet wide and 20 feet deep. The mall will have one mile of frontage on I-95 as well.

"People will remember the big green signs," Cambio said. "They will be monuments, landmarks."

The mall’s services will include a daycare facility where parents will be able to drop children off for $3.50 an hour. They will be given a beeper to use in case of an emergency.

"This is so unique because I am not a REIT. I don’t have to deal with Wall Street every 90 days. So our first and foremost interest is to create the best shopping environment ever," Cambio said. "Profit is our second motive." Universal will build the first phase of the project with no outside financing. Cambio estimated that first phase construction will cost about $40 million to build 400,000 square feet of the mall. The low estimate stems from the fact that Universal already owns the site, and it has already been prepared for construction. Moreover, Universal has its own construction division, enabling it to build much of the mall without outside contractors. To fund the first phase, Universal will sell some of its other assets, including possibly some outparcels of the 480-acre tract. The property is zoned into 5,000-square-foot sublots giving Universal a lot of leeway in terms of outparcel development. It has the option to sell small or large portions for associated development on the site. Some outparcel development has already occurred with Applebee’s, BJ’s Wholesale Club, Cracker Barrel and Wendy’s already operating units near the mall site.

The town of Coventry has been extremely supportive of the project as has the state itself. Rhode Island’s legislature and local government have given Universal a handful of financial incentives to help with the project. Cambio has also secured the right to change the road network without further approvals to accommodate the project. In addition, Universal has reached an agreement with the local building department enabling it to receive building permits within 30 days of application filings and foundation permits within five days of filing.

"If ever there was a town that was cooperative, it’s this town," Cambio said. "I’ve done projects in other municipalities where it’s taken four or five years to get approval. Here it was less than two years. I cannot say enough good things about Coventry."

The state has also waived a number of taxes. In Rhode Island, tenants have to pay tax on all of their inventory, which Cambio fought to get waived. The state legislature also removed the state wholesale inventory tax forever, a measure that Cambio lobbied for. Moreover, personal property tax for tenants has been waived for 10 years, and the real estate tax on the site has been relaxed. For the first year of the project Universal will pay no real estate tax, and each year afterward the amount will rise 10% until it reaches 100% 11 years after the development opens.

"The town has been great. It’s one of those rare instances where a municipality and a developer work towards the same common goal," Cambio said. "What we’re trying to do is create the best-designed, best-managed, best-built, best-quality center in all of New England."

Cambio claims the entire development will create between 15,000 and 18,000 jobs for local citizens. It will create thousands of jobs for years simply in the construction of the project.