This article is part of Construction Dive's 50 States of Construction series, in which we talk with industry leaders about the business conditions in their markets.
To characterize Rhode Island’s construction climate as lukewarm is to not be paying attention. Building activity had been worn down by years of lackluster activity and further damaged by the Great Recession. But now, spurred on by a Democratic governor intent on building a robust economic base, the smallest state has seen plenty of new projects and is recovering in a big way.
There are bound to be some growing pains related to all this new construction, like the entry of open-shop contractors into a strong union labor market and worries about whether Gov. Gina M. Raimondo's strategy of offering incentives to get companies to invest in the state will pay off.
But so far, it’s working. There are 40 projects that have received incentives under Raimondo's economic development program, said Rhode Island Secretary of Commerce, Stefan Pryor, the first person to hold that position. This “mini-boom” is being driven by the 30 companies that have either moved to the state or that have expanded operations in the state during the last three years.
In June, General Dynamics’ Electric Boat broke ground on a $792 million expansion of its submarine-building facilities in North Kingstown, and drug manufacturing company Amgen started construction on its $200 million biotech manufacturing plant in West Greenwich. Rubius Therapeutics followed suit in September and broke ground on a $155 million manufacturing plant in Smithfield, as did Infinity Meat Solutions, which began building a $100 million protein packaging facility, also in North Kingstown.
In addition, Raimondo has launched a 10-year, $4.7 billion program called RhodeWorks, fueled by a toll for tractor trailer trucks, which focuses on the state's structurally deficient bridges and other infrastructure in need of repair. So far, according to Pryor, the program has preserved or reconstructed 191 bridges for an investment of nearly $219 million in 52 projects; paved 100 miles of roadway for $81 million in 29 projects; completed five alternative transportation projects for just under $22 million; finished 31 traffic projects for an investment of around $30 million and spent $500,000 on stormwater infrastructure.
Pryor said the state is seeing a healthy mix of all types of construction and is ready for more.
This interview has been edited for clarity and brevity.
CONSTRUCTION DIVE: What is the biggest issue facing Rhode Island’s construction industry right now?
PRYOR: Getting the word out about our momentum and our success. There are shovels in the ground and cranes in the sky all over Rhode Island.
Gov. Raimondo has had a huge hand in that development. What actions did she take to make that growth happen?
PRYOR: There were welled up, bottled up, development projects (prior to Raimondo taking office in 2015), but, from a regulatory perspective, things were not happening, or there was a dose of financing necessary to fill the gap and make the project pencil out.
So, we created programs to cut red tape on the one hand and provide gap financing on the other, and that combination is helping to get development going. We've also hired a team of professional staff, who are terrific and are positioned to attract new end users, support existing Rhode Island businesses, partner with developers, and, in general, get the job done.
How has the reaction been to all of this new development on the part of Rhode Islanders, particularly the Raimondo administration’s strategies?
PRYOR: I think that in every state, there's a healthy skepticism of government investment in private development projects. Speaking of red tape, there's sometimes concern that as soon as the government gets involved with regulations, it might make them worse.
What Gov. Raimondo and our commerce team aimed to do was demonstrate that we were on the side of economic growth — that we would ally ourselves with any organization or anyone aiming to get a project done that could be beneficial to Rhode Island and its economy. I think that over the four years that we've been in office and that our programs have been in place, we've proven that ours is a responsible, pro-economy administration.
Where has the state cut red tape for contractors and developers?
PRYOR: On the one hand, we've created an electronic permitting system, where cities and towns can place all of their land use and development-related permits online. That enables much quicker application submission, review and processing. In addition, we've eliminated outmoded, unnecessary and nuisance requirements on the regulatory books.
How is the labor force coping with all the new work?
PRYOR: Rhode Island had the highest unemployment rate in America for eight months in 2013 and 2014. Between 2014 and 2018, Rhode Island led in a different way. We experienced the largest drop in unemployment in the United States. We are now at approximately the national average for unemployment. The construction trades have seen proportionate progress within this positive scenario. Therefore, the building trades are experiencing the advantages of our new prosperity and are getting to work on projects catalyzed by our commerce tools.
What are some state programs specifically helping the construction industry?
PRYOR: We have a tax credit called Rebuild Rhode Island [launched in 2015], which plugs a hole in a project pro forma and helps to get a brick-and-mortar project in the ground. We've done almost 40 such deals. The governor has also invested in our roads and bridges. We have a new infrastructure program called RhodeWorks, which is getting dozens of projects done across the entire state.
Rhode Island has traditionally been a strong union labor state. Has the entry of open-shop contractors caused any friction?
PRYOR: No. That doesn’t mean if you were to interview union leaders or construction professionals they wouldn’t have more of a story to express, but, no, it has not arisen as an issue.
Rhode Island has seen an influx of tech companies. Is that driving construction and development as well?
PRYOR: It’s a terrific trend. Of the 30 companies [investing here], an important subset are tech-oriented and innovation-oriented. For example, GE Digital opened a unit here. The India-based IT company Infosys debuted their new U.S. design hub here last month in some former offices of the Providence Journal and has partnered with the Rhode Island School of Design. In that same building is the headquarters of Virgin Pulse, the company that focuses on digital health. Trade Area Systems is a company that provides intel in the retail real estate market. The new R&D hub for coffee and tea company, Finlays, also opened here in Rhode Island.
A few years ago, the governor appointed a chief resiliency officer, so is it correct to conclude that all of this development is taking place in an environment of climate awareness?
PRYOR: Yes, and what I would point out is that Rhode Island is the pioneer in offshore wind. We are home to the first U.S. wind farm, built by Deepwater Wind in the offshore format, off of Block Island. Deepwater Wind is headquartered here, and [Danish company] Orsted, in acquiring Deepwater Wind [in 2018], is now co-headquartered in Rhode Island. We have just committed to another 400 megawatts of wind power, and Deepwater Wind was awarded that contract.
Connecticut is seeking the development of an offshore wind farm, and, likewise, chose Deepwater Wind. So, we are in the process of developing quite a system here in southern New England with Rhode Island as the epicenter.
Our administration is ensuring that we have the talent necessary to fuel these industries, so, we have created a computer science education program, CS4RI, that is offered in every K-12 public school. In addition, our Community College of Rhode Island system now offers scholarship-based, full access to Rhode Islanders. And the governor is proposing offering a major tuition scholarship to our Rhode Island college system, which is a four-year degree-granting program, all of this aimed at ensuring that we have a pipeline of talent to fuel, especially, STEM and design-related careers.
Within the [Rhode Island Commerce Corp.] set of programs, we've established two important initiatives. One is called P-TECH, [co-]designed by IBM, where companies partner with public high schools, especially in technical fields, and the community college system joins in. Students graduate high school with pre-associate degrees and, having been trained for the jobs being offered by the partnering companies, they are first in line for those jobs.
And around STEM and design degree holders, we have established something called the Wavemaker Fellowship. It enables a STEM or design-degree holder who has student debt to accept or remain in a STEM or design job in Rhode Island, and the state will help to repay their student loans. We have 667 Wavemaker fellows. It's helping hundreds of people stay in Rhode Island and choose STEM and design jobs in Rhode Island. It’s a great thing.