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Providence, R.I. – April 6, 2005 – Sean Colahan dreamed of someday living in a loft, like the ones he'd read about in the Soho district of Manhattan. But he never thought he'd find an affordable one in Providence when he moved here last summer.

Then he discovered, Rising Sun Mills, the sprawling former mill complex on Valley Street that was being transformed into apartments and commercial office space.

"It was still heavily under construction at the time," Colahan recalled. But he fell in love with the building with its original brick walls, maple hardwood floors and exposed ceiling beams and silvery ductwork throughout. The huge 10-foot-high mill windows, many of which had been broken and boarded up over the years, had been replaced with energy-efficient glass trimmed in forest green.

The apartments were renting for $850 to $1,475 per month, and each was unique -- designed to fit into the existing mill space. There were also lots of "common areas" in the building, including a lounge with a kitchen, bar, big screen television and a pool table; a lobby with comfortable chairs grouped around a fireplace; and even a fitness center loaded with equipment for residents to use.

"It was just a really neat place with some character to it, and lots of light," said Colahan, who's a photojournalist with WLNE Channel 6 News. He was among the first to move in when the first 56 apartments became available last September. "I lucked out on this," he said.

Rising Sun Mills, which will have more than 200 apartments and 125,000 square feet of commercial space when the renovations are completed by the end of the year, is among dozens of former factories and mills being converted to apartments, condominiums and office space around the state -- thanks in large part to the state Historic Preservation Tax Credit that went into effect three years ago.

"Rhode Island's mills have long been seen as potential places for real estate investment for several decades, but the real increase in development is attributed to the enactment of the state tax credit," said Edward "Ted" Sanderson, executive director of the Rhode Island Historical Preservation and Heritage Commission. Many of the projects that were launched shortly after the tax credits passed are now coming to fruition, he said.

These conversions are great for the state on many levels: They resuscitate abandoned buildings that were often eyesores and fire hazards, and preserve a bit of history in the process, Sanderson said. They also provide much needed residential and commercial space, especially in urban areas, with a mix of affordable and luxury prices.

These projects are creating thousands of constuction jobs, generating income and property taxes and stimulating local economies, Sanderson said, not only because of the influx of people using local businesses and services, but also because of the spin-off investments being made in surrounding areas.

More imprtantly, he said, these developments are saving important pieces of the state's history. "From a historical point of view, these are genuine landmarks of the history of working people in the 18th and 19th century," he said.

"Rhode Island was a leading manufacturer, a leading innovator, in manufacturing throughout the 19th century," Sanderson said. "The mill buildings don't just represent the products made there, they also present the men and women who labored in those mills and made their homes nearby."

DEVELOPERS have long recognized the value of developing these buildings, Sanerson said, noting that one of the earliest mill conversions was the conversion of the former Valley Falls Mills in Central Falls into senior citizen housing more than 25 years ago.

There have been several other isolated projects over the years.

But Mark Van Noppen, whose Armory Revival Co. is one of the state's leading renovators of historic homes and commercial space, said most developers shied away from mill and factory conversions because there was no money to be made on them.

That's why the state's Historic Preservation Tax Credit and other state and federal tax credits are so important, he said. They are "stimulating the redevelopment of these mill buildings that just wouldn't happen otherwise."

Some state and local officials, like West Warwick Town Manager Wolfgang Bauer, question whether the developers are getting too many tax breaks -- at an expense of other taxpayers. But on the other hand, he said, they are clearly working.

Bauer said he had lobbied for the renovation of some of the abandoned mills in that town since moving there more than six years ago, but no one seemed interested. However, once the state historic preservation tax credit passed, the developers descended.

In fact, Struever Bros., Eccles & Rouse, Inc., the nationally renowned urban redevelopment specialists based in Baltimore who are behind the Rising Sun Mills project in Providence, are taking on the restoration of the Royal Mills complex -- a crumbling mill complex on the banks of the Pawtuxet River. They're planning to spend more than $85 million restoring the building and creating 273 apartments and condos into a residential campus there.

It's the largest private investment in the town's history, Bauer said, and it will no doubt revitalize the area by attracting more professionals to the town while also bringing back to life one of the town's most spectacular pieces of architecture.

In fact, Bill Struever of Struever Bros., Eccles & Rouse, said he took on that project simply because "Royal Mills is one of the most gorgeous mill complexes we've ever seen. It truly is magical."

THESE KINDS OF PROJECTS are now under way or in the planning stages all over the state, Sanderson said, from Riverfront Lofts in Pawtucket, a combination of artist lofts and living spaces, to the restoration of the former Ashton Mill on the Blackstone River in Cumberland, a $33 million project that will create more than 200 new apartments there with an arched bridge leading to the bike path on the other side of the river.

Some are using state and federal tax breaks that require the buildings to be used as apartments for a miniumum of five years before they can be sold as condos. Others require a certain percentage of "affordable housing" units -- designed to accommodate buyers with incomes of no more than 80 percent of the state's median income.

But many are primarily funded with private money, resulting in everything from office space to luxury apartment complexes like The Promenade, a cluster of 220 luxury apartments being built at the Foundry in downtown Providence.

Tony Thomas, a partner in the Foundry Associates, said that they've switched their focus from commercial development -- they've already converted eight of the mill buildings into commercial space for nearly 80 businesses -- to residential use to meet the growing demand for luxury living.

They took one of the buildings, which had been abandoned for more than 25 years, and are creating 220 luxury apartments with monthly rental fees of $1,100 to $3,300, Thomas said. The individual units feature all kinds of high-end amenities, such as granite countertops and stainless steel appliances. In addition, the complex includes a 75-foot swimming pool under a retractable dome, a 20-seat media center, a 2,500-square-foot fitness center, a large Japanese courtyard with a waterfall, and indoor parking.

"We wanted to build the best project in the marketplace and we wanted to make sure we had all the amenities," Thomas said, noting that it also offeres a convenient downtown location for everyone from young professionals to empty-nesters.

OTHER DEVELOPERS are looking beyond the single-factory renovations, toward sweeping urban renewal projects of entire neighborhoods instead.

That's one of the goals that Struever Bros., Eccles & Rouse had when it teamed with the Armory Revival Co. to restore the former Saranac and National Worsted mill complex into Rising Sun Mills, according to Bill Struever.

That's one of his company's philosophies, Struever said. "We're not interested in stand-alone projects or buildings. We're interested in neighborhood." The goal, he said, is "to truly transform the economy and the spirit of the community."

That's why they're looking at the entire Valley Street neighborhood, to see where they could renovate other mills and nearby homes, as well as build new homes, townhouses and apartments, Struever said.

It's part of a bigger redevelopment plan, to develop 175 acres of riverfront property from Providence Place mall to Olneyville Square with more than 1 million square feet of new development.

This includes development of a new bike and walking path along the Woonasquatucket River that will run from Olneyville to Waterplace park, and trolley service that will link the new Valley Street neighborhood to downtown. Struever said they're also considering other renovations in the area, but he declined to elaborate because they're in the planning stages.

Struever said his company is also concerned about gentrification, since all this investment could drive up property values and drive out some of the people and businesses that make up the neighborhood. So they're working with the neighborhood and community groups to try to come up with a balance to preserve the flavor of the neighborhood as well.

The goal, Struever said, is to create a bridge between what's there and what's to come -- "to create a prosperous, lively neighborhood in the valley in which to raise a family and build a business."

IT'S A DELICATE BALANCE, said Van Noppen of the Armory Revival Co., whose company helped spark the revitalization of the city's Armory District in Providence's West End -- and beyond. They started in 1986, restoring abandoned houses and building new ones on vacant lots, attracting a mix of people to the previously poverty-stricken neighborhood.

The Armory Revival Co. moved on to rehab multifamily homes, apartment complexes, failed condominium projects and commerical buildings -- including 101 North Main St., that now houses Mills Tavern restaurant and some of the city's first high-priced condominiums that sold for a record $400,000 at the time. Soon, they had replaced the late Raul Lovett's law offices at 2 Thomas St. with the city's first million-dollar condominium. These were among the first in a wave of urban redevelopment projects currently sweeping downtown Providence, where high-priced lofts and condos are taking the space of some of the city's most venerable landmark buildings -- such as the former Peerless and Alice buildings downtown.

But it's on the fringes of this and other cities, in some of the poorest neighborhoods, that the derelict factory and mill buildings still stand -- brick monuments of another era, when Rhode Island was one of the country's leading manufacturers of everything from tools to jewelry to woolen and worsted goods.

Most have long since been abandoned, creating fire and safety hazards for local communities. That's why the state launched the Rhode Island Historic Preservation Tax Credit program, to help spur redevelopment -- which has taken off ever since.

And there's definitely a market for this kind of housing, said Thomas of Foundry Associates. "People are moving back into urban locations, especially into mill lofts. It's cool, it's hip. I think it's going to be well-received."

Struever agreed. He studied urban anthropology at Brown University, and became interested in the restoration of historic buildings here in part because of his daughter, who was a student at the Rhode Island School of Design who had artist friends affected by the demolition of several historic buildings at Eagle Square.

"Cities thrive on density and diversity," he said. "The more lively [the community], the more fun it was to live, work in, raise a family in and invest in a business."

That's why he takes a holistic approach to investing in the renovation of a neighborhood, instead of just a building.

In the meantime, Van Noppen notes, each building they save means they're saving a little bit more of the state's history, as well. That's one of the things he finds exciting about undertaking these projects. "A mill goes from being a blight on a neighborhood to being a great asset for a neighborhood, and people get really excited about that. Everybody driving by feels better about living in the city."

There are lots of people out there looking for something other than traditional home or workplace, said Martha Werenfels of Durkee, Brown, Viveiros and Werenfels, which is involved in a variety of restoration projects -- including the Royal Mills in West Warwick and the Pearl Street and Westfiels Lofts in Providence. That's what makes these factory conversions so appealing.

"People love old mill buildings that are converted," she said. "They have a sense of place that a house in the suburbs just doesn't have."

That's what attracted Sean Colahan to Rising Sun after he moved to Providence last spring, when he graduated from Ithaca College in New York and was hired by WLNE Channel 6 News. He initially monved into an apartment on the city's East Side, but wanted something different. So when he heard about the Rising Sun Mills complex, he decided to check it out.

He was immediately impressed with the historic aspects of the building, but also with the modern amenities of his apartment -- a nearly 1,000-square-foot two-bedroom, two-bath unit with six huge windows and high ceilings that rents for $1,325 a month.

It's a great place to live, Colahan said. "More and more, there's a community feel to it." The residents have a Web site link and they frequently meet for parties in the community room and lounge. "You always see your neighbors. There's just a community feel you wouldn't get from living in an apartment."

The halls are lined with artwork and other special touches that "really add that Soho loft feel" to the complex, he said.

"The one bad thing," he said, is not being able to step out of your living room onto a deck to throw a couple of steaks on the grill." There are no decks off these factory walls. But the residents are talking about getting a gas grill for the community courtyard this spring, he said. And overall, that's a small price to pay for loft-living in the city, Colahan said. "The feeling you get, it's just unique. I definitely love this place."

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