James Rizzo
James Rizzo
Title: Senior Vice President, Regional Manager of Commercial Banking, Rockland Trust
Age: 54
Experience: 30 years
James Rizzo got into the banking industry, as did many of his peers, through the credit training program at Fleet Financial. Eventually, he wound up leading a team of commercial lenders at Slades Ferry Bank and joined Rockland Trust via a merger in 2008. The Providence native is also a passionate drummer. “When you’re drumming you have to think orchestrally. You have to pay attention to what’s happening around you, hear everything, and listen well,” he told Banker & Tradesman. “It’s definitely shaped how I manage and how I conduct business in general.”
Q: So you know this market really well – what’s hot and what’s not?
A: There have been some interesting things happening in Providence in terms of residential lending and residential development. There’s been a flight from the suburbs into the downtown areas. It’s happening in many areas of the country and it’s definitely happening in Providence. There’s been additional residential building and development in the Downtown Providence area that’s never occurred before, or it occurred on sort of a one-off basis, but there’s never been this critical mass, so there’s very little vacancy. I think the vacancy in the high-end Providence market is 2 or 3 percent, which is effectively zero.
We’ve seen some developments that are considering the flight back into the city, but also to manage the influx of Millennials, as well. We’re seeing some different models with respect to residential development. One that we refinanced recently was the Foundry. That’s part of a long-term development in Providence. It’s complete, it’s renting well, but it’s different in terms of what was traditionally built out in the Providence market. Traditionally, you maybe looked at 1,100 square-foot units, maybe not as much social space, two bedrooms, that was sort of the standard for Providence. This particular development has only a single bedroom – the average space might be 600, 650 square feet – and a lot of social area. The Millennials go in, they eat, they sleep, they socialize.
It’s been interesting to see the conversion of Providence’s residential real estate developers into really understanding the change in the marketplace. It’s happened pretty rapidly, and there’s been some key buildings that have been reflecting that.
Q: What’s bringing those Millennials into Providence?
A: I think it’s primarily grad students – meds and eds – that are really driving that expansion with respect to the hospitals, the medical community in general. There’s a big student population in Providence, but these tend to be grad students in these newer facilities. I think there also has been some expansion into general industries in Rhode Island, but I don’t think that’s the primary driver.
Q: Can you talk about your work using New Markets Tax Credits?
A: Rockland Trust uses a different technique to deploy New Market Tax Credits into the marketplace. There’s a lot of complexity doing a New Markets Tax Credit deal. They tend to be very, very large, they tend to have huge accounting fees, huge legal fees, because the tax credit is taking place between entity A and entity B, and is usually in the form of an equity investment.
What Rockland Trust does that’s radically different is that the equity investment takes place between Rockland Trust, as a bank, and a CDE that we developed, so all the complexity and brain damage happens inside of Rockland Trust.
That money goes into the CDE and the CDE then needs to lend out that money, so typically each allocation has different rules associated with it, but in the last several, the primary benefit to our clients has been a very, very low interest rate – basically 50 percent of the market interest rate at the time, so seven-year rates were typically in the low [two percent range]. It’s a great add-on to the capital stack of a project, especially when you’re doing development projects. Your real risk is in the early part of the cycle as you’re stabilizing, you’re bringing in new tenants, you’re bringing in new businesses, so if you have inexpensive capital that allows you to take a little more additional risk.
Instead of being in a position where we’re making one large investment or two or three large investments, as I think most users of New Markets Tax Credits do, because we’re doing all the complex work inside of the bank we can lend out in $3 [million] and $4 million increments, or as low as half-million increments, using New Markets Tax Credit money.
Rizzo’s Top Five Drummers:
- Neal Pert, Rush
- John Bonham, Led Zepplin
- Vinnie Colaiuta, Jeff Beck and others
- David Garibaldi, Tower of Power
- Lenny White, Return of Forever
