Roger Williams University trustees have authorized negotiations with Berkeley Investments Inc. to lease the former office of failed video-game company 38 Studios LLC for its own downtown Providence expansion.
The Bristol, R.I., liberal arts university said it has outgrown its Metro Center, Providence, facility at 150 Washington St. The school, with roughly 3,900 undergraduate students, envisions a June 2016 opening at the 76,000-square-foot site.
"There is no specific timetable for the negotiations," the university's media relations manager, Lynda Curtis, said Tuesday. "We just want to move as quickly as possible on this."
The school said the building would provide expanded space for the university's law and continuing studies schools and its expanding community engagement programs, including the Community Partnerships Center, Latino Policy Institute and HousingWorks RI.
Blue Cross and Blue Shield of Rhode Island owned One Empire Plaza before Berkeley Investments, a Boston real estate company.
38 Studios, owned by former Boston Red Sox pitcher Curt Schilling, occupied One Empire Plaza after the Rhode Island Economic Development Corp. — now Rhode Island Commerce Corp. — provided a $75 million loan guarantee in 2010, backed by the state's moral obligation, to encourage Schilling to move the company from Maynard, Mass.
The company, however, closed its doors in 2012 and filed for Chapter 7 bankruptcy. State taxpayers are on the hook for about $86 million in debt, according to a report by SJ Advisors of Eden Prairie, Minn.
Rhode Island lawmakers in June approved a $12.3 million payment for 38 Studios bonds as part of its $8.7 billion fiscal 2015 budget after heated debate among lawmakers. Debate focused on the degree of harm Rhode Island's reputation could face in the capital markets.
The state in November 2012 sued several parties in an attempt to recover its losses related to the fiasco. According to WPRI.com and the Providence Journal, House Speaker Nicholas Mattiello, D-Cranston, confirmed that lawmakers have received subpoenas to testify in the case, which Rhode Island Superior Court Judge Michael Silverstein is overseeing. The original funding was part of a $125 million jobs creation bill approved in 2010.
The U.S. Securities and Exchange Commission is also investigating the financing.
On Friday, as former Gov. Donald Carcieri — who championed the financing while in office — completed his two-day testimony, Silverstein ruled that General Treasurer and Democratic gubernatorial candidate Gina Raimondo must testify in the case. Raimondo's attorney, Raymond Marcaccio of Oliverio & Marcaccio LLP, questioned the relevance of her testimony because Raimondo was a candidate in 2010 and "a bystander to the events that transpired."
State representatives Michael Chippendale, R-Foster, and Karen MacBeth, D-Cumberland, both of whom opposed paying the bonds, said they received threatening letters in late April after inquiring to state officials about an unfinished forensic audit Gov. Lincoln Chafee had ordered from the EDC.
Moody's Investors Service rates Rhode Island's general obligation bonds Aa2. Fitch Ratings and Standard & Poor's rate them AA.
