McKee to terminate contract with Scout for Cranston Street Armory development

PROVIDENCE, R.I. (WLNE) — Roughly a year after partnering with Scout, Governor Dan McKee and the state of Rhode Island are terminating their contract with the Philadelphia-based company that planned to develop the Cranston Street Armory.

The state through an independent financial review outlined an estimated $10 million net loss through Scout’s proposed plan. McKee added that this loss would be covered by taxpayers.

In a statement McKee explained, “The State is being asked to contribute $60.9 million for a project expected to generate $50.4 million in expected benefits to taxpayers over the same time period   — a net loss of $10.5 million at a minimum. If the proposal’s assumption turn out to be overly optimistic, the redevelopment efforts could result in even greater losses to the State and taxpayers.”

The decision comes in the wake of a controversial trip to Philadelphia by two staffers under McKee to meet with Scout. Newly released emails outlined inappropriate behavior during their trip.

The Cranston Street Armory served as a warming center for homeless over the winter, further delaying Scout’s proposals.

The governor’s administration cited a declining commercial real estate market, a lack of investment by Scout, and additional state expenses as more reason to move on.

The Department of Administration told ABC 6 all options are now on the table for the armory, and they don’t expect any legal trouble upon the contract’s termination.

A spokesman for Providence Mayor Brett Smiley said they have had talks for the city to potentially take over ownership of the property.

“We are in ongoing discussions with the state regarding a transition in ownership of the Cranston Street Armory Property and what that could look like,” said Smiley spokesman Josh Estrella.

“Any transaction would necessitate a provision for adequate capital improvement funding to ensure effective rehabilitation of the facility, which is critical to future development of the site,” he added.

McKee further stated there could be an option where the city takes possession of the facility.