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Is Rhode Island Squandering Its Opportunity to Redevelop I-195?

Thursday, January 16, 2014

 

Almost three years after a new state agency was formed to spearhead its redevelopment, the land opened up by the relocation of Interstate 195 in downtown Providence remains vacant, crisscrossed by a maze of orange plastic fencing and traffic cones.

The Interstate 195 Redevelopment Commission has yet to review any formal development proposals. Nor has it issued any formal requests for such proposals—a critical step forward that officials say will happen next month, though no definite date has been set. (See below slides for profiles of key officials involved in the project.)

The commission was established in October 2011, but did not acquire ownership of the former I-195 land until April 2013, which it bought from another state agency, the Department of Transportation. It hired its executive director the following month.

Critics warn delays could cost commission

“They are taking forever, aren’t they?” said Joe Paolino, a former Providence Mayor and a local real estate developer. “My frustration with it is they already have so many good developers that want to develop there. Why do they have to waste time?”

The public may not have seen much activity above ground, but commission officials said in a series of interviews that the commission has been hard at work over the past two and a half years: going through the lengthy federal approval process for the sale of the land, engineering the storm water system for the land, obtaining environmental permits, and working with the city on zoning requirements—all work that officials say will save time down the road once developers become involved.

Still, critics question whether the commission has spent too much time planning.

“I believe in the planned development of ‘strategic’ land but not planning forever. Many of us still do not understand the relationship of the commission’s work to other city and statewide economic development activities. After three years, there is little to show for their efforts. While they deliberate, and provide consulting agreements to non-Rhode Island firms, potential Rhode Island economic development opportunities have gone to other states,” said Ed Mazze, an economist and business professor at the University of Rhode Island.

Mazze said the commission—whose members were nominated by Governor Lincoln Chafee and confirmed by the state Senate—was “an excuse for government and legislative leaders to postpone tough decisions on what to do with the land.”

Rhode Islanders are certainly accustomed to how long major redevelopment can take, as they’ve seen the slow but steady transformation of the downtown in Providence over the course of several decades.

But some of the biggest developments in the state’s history have occurred relatively quickly. The plan for the new terminal at T.F. Green airport was launched by Governor Bruce Sundlun after he took office in January 1991. The terminal opened in September 1996. The financing agreement for the Providence Place Mall was finalized in 1996, construction began in 1997, and the mall opened to customers in 1999.

“The Commission is an example of the ‘theory of creeping meat-ballism’—bring together a group of individuals with little or no experience in economic development, give them a budget and some authority, let them meet for a few years and get little action other than what would have happened anyway without them,” Mazze said.

To date, the commission has spent approximately $866,000, not counting the current fiscal year. With a volunteer board and just two staff members, the bulk of that funding has largely gone to attorneys, engineers, and consultants. (As a comparison, the Providence Department of Planning and Urban Development had a budget of $5.3 million in 2012 for a staff of approximately 40.)

I-195 chairman: ‘We have gone at light speed’

Last September, soon after GoLocalProv starting making inquiries about the work of the commission, a spokeswoman forwarded a one-page document identifying what the commission had achieved and what it was in the process of doing. Notably, there was no mention of any meetings with developers in either section. Instead, under a section labeled “longer-term” the document pegged January 2014 as the target date for when proposals were to be solicited from developers—though that has now been moved to next month, officials said this week.

In an interview, commission chairman Colin Kane said the group has been hard at work and has accomplished much—even though it may not seem so to the public. “I would suggest that we have made extraordinary progress in terms of advancing the preparation of this property for vertical construction,” Kane said.

He pointed to the transfer of land ownership from the state DOT to the commission. The process, he said, is a lengthy one that requires the approval of the Federal Highway Administration. “This is a complicated, complicated transaction,” he said. Kane suggested that two years was a shorter-than-usual turnaround that was made possible because of the initiative of state and federal officials.

The same goes for the environmental permitting for land that Kane described as “Brownfield central.” He said the commission had expedited the permitting process by obtaining the first-ever joint permit from the state Department of Environmental Resources and the Coastal Resources Management Council, another state regulatory agency. As a result, Kane said the process took 20 months, rather than the 36 months it might have taken a private developer.

“I have been doing this for a very long time. We have gone at light speed in this business,” Kane said.

He also said the genesis of the mall project took longer than the three years between the completion of its financing agreement and its opening. Kane said that three years of pre-development efforts, including design and engineering had gone into the project. Overall, he said it had been a 10 to 15-year project.

Chafee, Ruggerio defend commission

State officials this week told GoLocalProv they had confidence the commission was moving forward.

“The development of the 195 land in the heart of Providence has made tremendous progress specifically the work to prepare the land for development. All of the proper infrastructure is being put in place and has been aggressively pursued through state, city, federal and private partnerships,” Chafee said in a statement to GoLocalProv.

Chafee credited a team of state agencies with “quick work” on the permits, including DEM, the DOT, the Narragansett Bay Commission, the Department of Administration, and Coastal Resources.

“The site is very busy with activity as we ensure the construction of good solid infrastructure—roads, utilities, sewers, drainage among other groundwork. The 195 land has been branded, the LINK, and implementation of a marketing plan has started. This has been a thoughtful project and smart decisions have been made by members of the Commission,” Chafee said.

Senate Majority Leader Dominick Ruggerio—one of the chief champions of the legislation that created the I-195 commission—agreed. “Of course we would all like to see the cranes in place and workers on the job to build a new skyline right away, but this is not a realistic expectation. It was always expected to take some time to overcome logistical hurdles, such as putting gas and electric utility lines in place and building roads. The average citizen might not have noticed much of the work that has been done so far, but the work is moving forward,” he said.

One man who has been a pivotal figure in the redevelopment of downtown Providence—former Mayor Buddy Cianci—told GoLocalProv that there may be a perception the commission has been slow, but he said he understands why. “It’s taken a while, but I understand that,” Cianci said. He pointed to the Capital Center District, a major development project that took roughly 25 to 30 years to complete.

Cianci urges the commission to be proactive in deciding what kinds of developments it wants to see in the I-195 district. He said whatever ends up being built on the land should be “symbiotic” with the rest of the city. He said the commission has to find projects that fit into an area dense in hospitals and universities all the while also working with city and state officials to line up attractive tax incentives for future developers. “It’s like conducting the Boston Symphony,” Cianci said.

Infrastructure work to be done in 2015

Kane said the state is also saving developers money by investing $50 million into infrastructure work on the I-195 parcels—connecting streets and sewer pipes, installing a storm-water system, setting up utilities, and relocating the vault for the city’s primary electrical feed, among other work. “That’s not sexy. But that’s how we plow the field to take advantage of this once in a generation opportunity,” Kane said.

The infrastructure work on the west side of the former I-195 land will be done by the end of this year. The east side portion will be done by late summer 2015. The parks that ring the areas of future development will be open in 2015 and a pedestrian bridge tracing out the pathway of the former highway will be completed in 2016, according to Jan Brodie, the commission’s executive director.

That means that even if the commission had started vetting formal proposals for developers, construction on their projects still could not have started by this point, according to Kane. “No one can build right now. They have to be able to plug into a sewer and to electrical sockets. We are building those today with our partners at DOT,” Kane said.

Was the commission shortchanged?

One local real estate expert, speaking on the condition of anonymity, suggested that budget issues could have handicapped the commission from the get-go, slowing down its work. The commission was formed in October 2011, but it did not have money in its first year for an executive director. It did not even have a budget.

“Our theory was ... to learn to be lean early. We don’t need to build another state agency. We need to put ourselves out of business, quite frankly,” Kane said.

For its first year, the commission had to borrow money from the Economic Development Corporation to fund its operations. It also uses office from the agency (now re-named the Rhode Island Commerce Corporation).

Kane insisted that the budget was not a factor in the timeline. “It did not impede our progress,” he said.

The source also warned that financial and economic realities could put a damper on efforts to attract developers. Construction costs that are almost as high as those in Boston, with rents half as high, coupled with the highest commercial property taxes for comparably-sized cities, isn’t exactly a winning formula for the redevelopment effort, the source suggested.

Kane did not dispute that financial factors will be a challenge. “The property taxes are tough. It’s a real challenge,” he said. “That sort of disconnect between rents and costs …[is] quite real.” But, he added, those challenges are common to most cities in the country, with the exception of a handful (Boston being one of them).

On the upside, Kane emphasized the approximately $50 million investment the state has put into infrastructure work on the site. The pre-permitting that the commission has done, he added, removes much of the uncertainty and risk that would normally face developers.

So far, however, the commission has not hashed out any agreements that would give developers a break on property taxes. Kane said the group is “not there yet.”

Commission spokeswoman Dyana Koelsch suggested that it may seek out such agreements in the future. “The commission expects to work with developers to make their projects successful. That may in some cases include discussions with the state and the city about incentive programs that can advance desirable projects that have long-term economic value,” Koelsch said.

Clock ticking on development proposals

Although it has not heard any formal development proposals, Kane said about eight or nine potential developers and other groups have expressed an interest in the site. That includes Brown University—which opened up its new medical school nearby in 2011—and Johnson and Wales University, which has already purchased one of the former I-195 parcels that was carved out of the rest of the district.

Almost 19 acres are open for development. Kane said the existing infrastructure could support up to three million square feet of space—roughly double the size of the Providence Place Mall. (The mall sits on almost as much land, about 15.4 acres, according to city property records.)

Several private groups have also reportedly aired informal proposals for the land, including the Carpionato Group (based in Johnston), Churchill and Banks (Providence), and Hecht Development (Concord, Mass.).

If those developers are seriously interested, they will have to wait until the commission issues its formal request for proposals next month (technically the solicitation is a Request for Information, or RFI). When asked why the commission had not started the formal review process earlier, Koelsch said the “clear title, master environmental permitting, new utilities, zoning flexibility, and a transparent expedited path to development … are critical elements of the RFI.” (The last element was developed between September and December and finalized this month.)

The commission will review and make selections from responses 90 days after the RFI is issued. After that, generally there will be an 18-month process for developers to “finalize their design, get approval, and secure funding,” according to Koelsch.

In the meantime, the commission is resolved to make sure the former highway parcels don’t remain vacant for too much longer. The commission has also solicited proposals for interim uses for the land—presumably, large sculptures and other forms of interim art. The commission will soon be reviewing the proposals, which were due on Wednesday. The installations will start going up in May and could be in place up to a year, according to Koelsch.

That process, Kane said, will not interfere with the commission’s review of formal development proposals. “We are clever—we can do more than one thing at once,” Kane said.

Stephen Beale can be reached at sbeale@golocalprov.com. Follow him on Twitter @bealenews

 

Related Slideshow: I-195 Redevelopment: Key Players

Below are the key players in the redevelopment of the former Interstate 195 land. Listed are the seven members of the special state-appointed commission overseeing the redevelopment, as well as the state and local officials who have backed the effort. In addition to top city and state leaders, nonprofits like Brown University and Johnson and Wales are also expected to have a hand in the redevelopment. (Note: bios of commission members are from the Governor’s office.)

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Governor Lincoln Chafee

In 2011, Chafee signed into law a bill that established the process for the redevelopment of the Interstate 195 land. Chafee also appointed all members of the seven-member commission, with recommendations from Providence Mayor Angel Taveras and House Speaker Gordon Fox. Historically, the Governor’s support has been critical to the success of major development projects. Former Governor Bruce Sundlun spearheaded the construction of the new terminal at T.F. Green Airport and the support of both Sundlun and his successor Lincoln Almond was necessary in order for the Providence Place Mall development to get off the ground.

“The development of the 195 land in the heart of Providence has made tremendous progress specifically the work to prepare the land for development. All of the proper infrastructure is being put in place and has been aggressively pursued through state, city, federal and private partnerships.  The permitting occurred because of  quick work by DEM, RIDOT, DOA, NBC, CRMC and other government agencies and contributed to the fast pace in which we made the land pad ready,” Chafee told GoLocalProv this week.  

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House Speaker Gordon Fox

As House Speaker, Fox oversaw the approval of the legislation establishing the I-195 Redevelopment District Commission. The House, under the leadership of Fox, also approved state funding for the commission. Fox also could make recommendations for members to Chafee, who made the final appointments.

As Speaker, Fox has made economic growth and development one of his top priorities. At the end of the last legislative session, in July 2013, the House passed a series of economic initiatives, including an overhaul of the Economic Development Corporation (EDC), which was renamed and put under the authority of a Secretary of Commerce.

“We all want economic development strategies that look far down the road, policies that are coordinated across state government but without redundancy, and an economic development agency that has the power but also the oversight it needs to effectively support businesses in their efforts to grow and bring prosperity and jobs to Rhode Island,” Fox said at the time. Fox represents District 4, which encompasses the Mount Hope, Summit, and Blackstone neighborhoods of Providence.

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Senate President M. Teresa Paiva Weed

The Senate, under the leadership of President M. Teresa Paiva Weed, confirmed Chafee’s nominees to the I-195 commission in October 2011. The commission began meeting immediately.

Paiva Weed, a Newport Democrat, has worked with Fox on a number of economic initiatives as well. “Economic development has been a Senate priority throughout the session. Working together with our partners in the House, the administration, and the private and nonprofit sectors, we have reshaped our approach to economic development in the state. This effort improves transparency and accountability, while focusing on the strategic economic and workforce development which is so essential to job growth in Rhode Island,” said Paiva Weed said last July, after the General Assembly overhauled the EDC. 

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Senate Majority Leader Dominick J. Ruggerio

Ruggerio, a Providence Democrat is widely regarded as one of the chief champions of the I-195 redevelopment legislation in the General Assembly. “The availability of this reclaimed land presents an exciting opportunity to attract new, high-quality jobs and bolster the economy of the city and the state,” said Leader Ruggerio. “This redevelopment district is a key advantage for our state. It bodes well for our ambitious goals that this collection of exceptional individuals will guide the development of this vital district,” Ruggerio said in October 2011, after the Senate confirmed the members of the commission. In a statement to GoLocalProv this week, he expressed confidence that the work was moving forward on the redevelopment project. 

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Providence Mayor Angel Taveras

As with the Governor, the support of the Mayor is critical to the success of a major redevelopment initiative. At least three members of the commission were Taveras’ picks, although Chafee made the final nominations to the Senate. The City of Providence remains an important player in the redevelopment process, approving a major re-zoning of the area in 2012 that grants flexibility to future development. As Mayor, Taveras also proposed—and successfully passed—a commercial tax property tax freeze. Taveras announced his run for Governor last October, ensuring that a new mayor will oversee the development of the former Interstate 195 land. 

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Colin P. Kane, I-195 Commission Chairman

Colin Kane is Principal of Peregrine Group LLC. Kane is Peregrine’s lead partner for project transactional activities, including structured workouts, payment settlements, deal origination, project planning, asset acquisition and sales, leasing, financial analysis, workout analysis, and debt/equity capitalization.

Prior to helping found Peregrine in 2001, Kane worked as a Development Manager for Gilbane Properties. Kane has broad experience in real estate development, including successful projects in Rhode Island, North Carolina, California, Maine, Nevada, Vermont, Virginia, Maryland, and Florida over the past 12 years. Projects include mixed-use campuses, historic rehabilitations, multi-family housing, hospitality venues, planned residential communities, large-scale corporate and institutional build-to-suits (including medical facilities), and brownfield redevelopment.

Kane is a combat veteran of Operation Desert Storm, a graduate of Harvard Business School (MBA), Georgetown University (MA), and the US Naval Academy (BS, with distinction), and serves on the Executive Committee of the RI Builder's Association. He is a resident of Wickford. (Nominated by Chafee.)

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Barrett Bready, M.D. I-195 Commission Member

Barrett Bready, M.D., is President and CEO of NABsys, Inc., a start-up and an advanced DNA sequencing technology company located in the heart of the Knowledge District. Bready has headed NABsys since 2005, and has led the company’s acquisition of GeneSpectrum as well as the execution of its licensing deal with Brown University.

Bready has been named one of the top “30 under 30” in New England by Mass High Tech: The Journal of New England Technology and one of 25 “movers and shakers” in the State of Rhode Island by Rhode Island Monthly.

Bready teaches “Biotechnology Management” at Brown, where he holds the position of Adjunct Assistant Professor of Biotechnology. He received his M.D. from Brown Medical School and his Sc.B. in Physics from Brown. He co-chairs BioGroup, Rhode Island’s biotechnology industry organization, serves on the Board of Directors of the Brown Medical Alumni Association, and is a Trustee of the Providence Preservation Society and WaterFire. (Nominated by Chafee.)

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Barbara A. Hunger, I-195 Commission Member

Barbara Hunger has been a registered nurse in the Labor and Delivery Unit at Women and Infants Hospital for 25 years. Prior to joining Women and Infants, Hunger worked as a nurse in hospitals throughout New England. She earned a BS from Southern Connecticut State University. Her civic involvement includes volunteerism with CityArts, Elmwood Neighborhood Housing, Community Music Works, and the Steel Yard. Hunger has been a resident of and homeowner in Providence’s Elmwood neighborhood for 25 years and raised two children who attended Providence Public Schools. (Recommended by Taveras.)

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Diana L. Johnson, I-195 Commission Member

Diana Johnson is a self-employed art consultant. She served as Director of Brown University’s David Winton Bell Gallery and as Curator of Prints, Drawings and Photographs, Chief Curator, and Acting Director of the RISD Museum of Art.

Johnson also has served as Senior Vice President and City Executive with the Private Clients Group at Fleet National Bank-Bank of America, Senior Vice President and Portfolio Manager with the Providence Group Investment Advisory Company, and Vice President with the Trust and Investment Division of Fleet National Bank.

Johnson has served on the Boards of the RI Committee for the Humanities, Veterans Memorial Auditorium, and Trinity Repertory Company, and as Board Chairman of the RI State Council on the Arts, Travelers Aid Society of RI, and Planned Parenthood of RI. She received a BA in Government from Radcliffe College (Harvard University) and an MA in Art History from Brown. She is a resident of Providence. (Nominated by Governor Chafee.)

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John M. Kelly, I-195 Commission Member

John Kelly has been the President and CEO of Meeting Street School for the last 14 years. Meeting Street serves over 3,000 Rhode Island children and families each year. During his tenure, Kelly has overseen the development of Meeting Street’s $25 million South Providence campus which resulted in over 180 jobs moving to South Providence (with an additional 40 jobs added since its relocation).

An attorney by training, Kelly previously focused his law practice in corporate and real estate law as a partner at Tillinghast, Collins & Graham. Kelly subsequently held a leadership position in a non-profit organization, The Coalition for Community Development, which was created to revitalize downtown Providence.

Kelly has served as Chair of the Board of Directors of The Genesis Center and the Providence Revolving Fund and has chaired four city boards and commissions: the Port Commission, the Zoning Board of Review, Adhoc Permitting Review and the Salary Review Commission. As Chair of the Adhoc Permitting Review group, he was tasked with streamlining Providence’s permitting process. To date, the city has implemented electronic plan review, concurrent plan review and launched of an expedited review process. He is a graduate of Franklin and Marshall College and earned a law degree from Boston College. Kelly is a resident of the city’s south side. (Recommended by Taveras and Fox.)

Photo: Flickr/spablab

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Mark T. Ryan, I-195 Commission Member

Mark Ryan is a principal at Moses and Afonso, Ltd., where he concentrates his practice in the areas of corporate and business law. Ryan has extensive business and business law experience.

Prior to joining Moses and Alfonso, he was with the Providence Journal Company for nearly 25 years, where he served as Executive Vice President and General Manager, Senior Vice President – Legal and Administration, and Vice President – Legal and Administration. During his time at the Journal, Ryan was also responsible for litigation management, environmental issues and labor and employment matters country wide, and oversaw digital operations.

Ryan is a Director and Member of the Nominating and Legislative Committees of the Greater Providence Chamber of Commerce, First Vice Chairman and Trustee of the Providence Performing Arts Center, a Member of the Rhode Island Commodores, and a Member of the Rhode Island Bar Association. Ryan is a graduate of the University of Rhode Island and New England School of Law. (Recommended by Taveras.)

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Michael S. Van Leesten, I-195 Commission Member

Michael Van Leesten is CEO of OIC of Rhode Island, a non-profit that provides training, employment, and minority business development services. He also heads Van Leesten Group, LLC, a community development consulting firm.

Van Leesten has over 40 years of community and business development experience, including: Executive Director of the Providence Planning and Development Department, Director of Fleet National Bank, Chairman of the RI Home Mortgage & Finance Corporation, public affairs management with the Mashantucket Pequot Tribal Nation, and, currently, Chairman of the Providence Black Repertory Company. He has directly managed and developed various types of commercial and residential real estate projects in Rhode Island and Connecticut.

Van Leesten is a member of the RI Heritage Hall of Fame. A graduate of Rhode Island College with a degree in education, he has also completed the University of Pennsylvania’s Executive Management program and did course work in Community Planning at the University of Rhode Island. (Nominated by Chafee.)

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Jan Brodie, Executive Director, I-195 Commission

Hired in May 2013, Jan Brodie serves as the executive director for the I-195 commission—one of just two staff positions on the commission. Brodie was hired after a six-month search in which over 200 candidates for the job were reviewed.

Prior to her appointment, Brodie has served as the Northeast Regional Director of The Community Builders, a real-estate development organization in Boston, Massachusetts. Previously, she was the Vice President of the Armory Revival Company in Providence.

Brodie received her MBA from The Wharton School, her masters in architecture from the University of Pennsylvania GSFA and her bachelors of arts degree from Williams College.

Photo: Flickr/Dougtone

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James S. Bennett, Providence Economic Development Director

As its Director of Economic Development, Bennett is the city’s point person for any economic development effort in Providence. Bennett was appointed by Taveras in August 2011, months before the commission was established. According to his official city bio, “In this position, Mr. Bennett oversees all economic development initiatives and leads efforts to support existing businesses, attract new businesses and create jobs in Rhode Island's capital city.”

Bennett previously was the chairman of the Rhode Island Convention Center from 1995 to 2001. He was reappointed as chairman in June 2011 by Chafee. “His leadership of the board has been credited with the Convention Center's successful efforts to market Providence as a national convention destination and increase convention business and tourism in the capital city,” his city bio states. Bennett has also launched three startup companies and run several large companies. He is a 1979 graduate of Brown University. 

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Brown University 

It’s hard to imagine Brown University—which opened its new medical school in the Jewelry District three years ago and is the sixth largest employer in the city—not playing a role in the redevelopment of the former Interstate 195 land. Brown is a critical partner in local and state officials’ vision for a new “Knowledge District” in Providence. In recent years, President Ruth Simmons was the university’s chief liaison to the community. That role now falls to new President Christina Paxson, who has a background in economics. Brown has already expressed an interest in the I-195 land, but no formal proposal has been submitted to the commission. 

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Johnson and Wales University

Johnson and Wales is also deeply involved in the redevelopment of the I-195 land. In November 2012, the university purchased two parcels from the former highway area to expand its downtown campus. “This area is integral to the future economic development of our city and state, and I am very pleased our plans for these parcels of land will bring jobs and activity to the old Route I-195 corridor and serve as a catalyst for other private development to follow,” said JWU Chancellor John Bowen, according to remarks reported in the Providence Business News. Johnson and Wales has expressed interest in buying up more land from the I-195 commission. 

 
 

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