Company offers to take Lippitt Mill out of receivership
Redevelopment project to create housing has faced series of financial troubles
WEST WARWICK, R.I. — Bostonbased Marathon Development LLC has offered to pull the failed Lippitt Mill project out of receivership after the proposed $15.2 million redevelopment of the mill faltered due to financial troubles. Marathon offered $3.6 million for the mill during a competitive bids process that will take place until Jan. 8, 2024, as set by the courts.
A spokesperson for Marathon, which is run by Harry and Frank Angevine, could not be immediately reached for comment on Friday. The company is no stranger to Rhode Island: In November 2022, the development firm was approved by Providence’s City Plan Commission to redevelop a mixed-use building that included affordable housing at 228 Broad St. in Upper South Providence.
The Lippitt Mill is one of just a few timberframe mill buildings still standing in Rhode Island. It was built in 1810, and is one of the oldest cotton textile mills in the state.
Redevelopment plans for the more than 62,000-square foot site had included the wooden mill building and various other interconnected buildings where developers would have constructed 65 residential units, 43 percent of which would have been deed-restricted as affordable housing for families earning 60 percent of the Area Median Income or less. The project was initially overseen by developer Kristopher Shaw of Prominen Management Group, LLC, of Cedar Hill, Texas.
In 2016, the Board of the Rhode Island Commerce Corporation authorized the use of $2,103,501 in tax credits to support the site’s redevelopment, which was lauded by former governor Gina M. Raimondo as a way to create new jobs, revitalize a dilapidated historic mill, and remediate a site that had environmental contamination.
These Rebuild Rhode Island tax credits were designed to help fill the
financing gap that could cover up to 20 percent or 30 percent of a project’s costs. Construction was supposed to begin by the end of 2016.
Since then, however, the project has had a series of financial woes.
In January 2018, Citizens Bank announced its Community Development Group had provided $9 million in financing in the form of a tax-exempt bond to Pawtucket Development Group, LLC (now led by Shaw) for the renovation of the vacant historic mill. At the time, Shaw had also secured financing with Low-Income Housing Tax Credits and Federal and state historic tax credits.
About a year later, in 2019, a general contractor walked off the job claiming they were owed money. In October 2023, the mill was placed into receivership after stacking up a series of lawsuits against its developers, including a civil complaint from Citizens Bank, and a list of contractors who filed liens saying they Prominen Management Group, LLC, had not been paid.
Citizens Bank claims the developers never repaid their construction loan, and the bank is expected to recoup nearly $11 million if the property is sold, according to documents filed in court.
Shaw is due back in Kent County Superior Court on Jan. 10, 2024, where terms of the auction sale will be set.
Because the project was not completed, the developers never received Rhode Island Commerce’s tax credits. “Our credits do not get disbursed until after a certificate of occupancy has been issued, and the Lippitt Mill project is not yet complete,” said Commerce spokesman Matthew Touchette in an email to the Globe in October.