2014-12-24 / Front Page

Paolino Says Grand Talks Go On

By Tom Walsh

Developer Joseph R. Paolino Jr. said this week that he is “still in the middle” of negotiations to buy Newport Grand but that he hopes to conclude the talks by the end of this year.

“If the numbers work, I’d still like to develop the property into an entertainment center,” Paolino told Newport This Week in an interview. “But it’s still premature to go through it now.”

Paolino, the former Providence mayor who now owns a home in Newport, had hoped to invest $40 million in transforming the current Newport Grand into a casino that offered table games as well as slot machines. Those plans were dashed in November, however, when 57 percent of Newport voters rejected the table games plan. Although 55 percent of Rhode Islanders overall approved the idea, state law requires approval both statewide and locally to make such a change in a gambling operation. A referendum on Newport Grand table games had met a similar fate two years earlier.

Not long after the ballot question's most recent rejection, Paolino disclosed that he would not rule out an alternative investment without table games. “You never know. I still have interest,” he said the day after Election Day in November. And, he said, his partners in the 2014 effort—British businessman Peter de Savary and Boston developer Paul G. Roiff—remain interested in joining him in a revised project if current negotiations with Newport Grand owner Diane Hurley are successful.

“If it makes good economic sense we’ll go forward,” Paolino said. “We are all still in there with each other.”

“Good economic sense” is the question. Newport Grand came to be more than 30 years ago as a 3,000-seat jai alai fronton. Those who recall those days also know that where the current slots parlor now proclaims “SLOTS” in giant letters atop the front side of the building that faces the Newport Bridge, the former fronton shouted “Hi Li.” Phonetics apparently were more important than spelling back then.

Over the years, neglect of the physical plant and competition from other gambling enterprises have cast a pall over Newport Grand. Income at the slots parlor has dwindled from $80 million in 2005 to $40 million now.

Nevertheless, Paolino’s voice sounded enthusiastic this week when he was asked in the interview to describe his vision for a potential development.

“In the summer we could put up a tent in the parking lot and host all those events that formerly were put on by the Newport Yachting Center,” he said. “And we could bring the trolley buses down there to bring people into the city and the many fine restaurants we have there.”

Since the Yachting Center sold its former downtown property, there has been considerable talk of holding the summer concert and entertainment programs at Fort Adams. The Newport City Council plans to hold a workshop on that idea in January.

Paolino, managing partner at Paolino Properties in Providence, said the third floor of the Newport Grand building has about 40,000 square feet of space that is currently unused. “We would be able to host banquets and entertainment in the winter,” he said.

He didn’t mention it during the interview, but during the fall campaign Paolino spoke of using a portion of the parking lot for an outdoor ice rink during the winter. That issue continues to simmer in Newport, where the sale of Newport Yachting Center land means there will be no outdoor ice skating this winter. However, that may change as soon as next year as a new group has proposed bringing the outdoor rink back in the Gateway Center parking lot.

Paolino said that while plans called for spending about $40 million had the table games referendum passed, an alternate project would not require that level of spending. “Forty million won’t happen,” he said.

When asked if he had a specific figure in mind, Paolino replied, “We’re not even there yet. That will have to wait to see if we have an agreement.”

Paolino said again that a significant issue that motivated him to pursue a Newport Grand deal in the first place was the thought of saving the jobs of about 175 Newport Grand employees. He said that still motivates him. He had estimated that adding table games could make the facility more competitive with other gambling venues and eventually result in elevating employment there to 350 jobs.

He said that he would welcome the chance to discuss the matter with Newport city officials. “When it comes to doing something in Newport, I’m always cautious—in this case, hopefully, cautiously optimistic,” Paolino said.

Told of Paolino’s desire to speak with city officials about his plans, Mayor Jeanne-Marie Napolitano said she would“absolutely”welcome an opportunity to speak with him.

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