Projo Biz Blog

Capital Properties Inc., an East Providence company that owns some prime land in Providence’s Capital Center district, gave bonuses to two retiring executives that total $215,000, the company said in a filing to federal regulators.

The company also gave raises to its three top executives that range from 3.7 percent to 7.6 percent, as of Jan. 1.

Capital Properties (CPI:AMEX) said its board of directors approved one-time cash bonuses of $115,000 to Ronald Chrzanowski, president of the company, and $100,000 to Avery Noe, president of the company’s subsidiary, Capital Terminal Co. Both men will be retiring at the end of this year, and the bonuses were awarded “in recognition of their long-term performance,” Capital Properties said in the filing to the U.S. Securities and Exchange Commission.

The bonuses amount to about 65 percent of the company’s third quarter net income of $333,000.

Robert H. Eder, the chairman and chief executive officer, will take over the additional duties of president on Jan. 1. The company increased his annual salary as of that date to $247,300, and increase of 6.1 percent from his current salary of $233,076.

Eder and his wife, Linda Eder, effectively control Capital Properties with their holding of 52.3 percent of the company’s outstanding shares. Robert Eder is also chairman of the Providence and Worcester Railroad Company.

As of Jan. 1, Capital Properties will increase the salary of Barbara J. Dreyer, the company treasurer, to $169,700, an increase of 7.6 percent over her current salary of $157,759. And Todd Turcotte, the current terminal manager who will become president of Capital Terminal, will be paid $140,000, a 3.7 percent raise from his current salary of $135,000.

“Our overall philosophy in terms of executive compensation program is to fairly reward the executives on a current basis for the services performed by them,” the company said in its annual proxy statement, filed March 28.

“We do not believe it is necessary to structure short or long-term incentive arrangements by way of either cash compensation or stock options since, given the Company’s size, most of the major decisions with respect to the Company’s operations are determined by the chairman and chief executive officer who is the majority stockholder. Therefore, a material part of his net worth is a function of the company’s long-term performance.”

The board’s compensation committee hired a consultant, Effective Pay Practices of Gloucester, Mass., to review its executive compensation. The consultant’s report found that the compensation for the chairman, the president and the treasurer was below the 50 percent median of base salary of peer companies, based on a survey of 12 real estate operators and lessor companies, Capital Properties said in the March filing. At the time, the company said it had raised the salaries of those three executives up to the 50 percent median of its peer companies.

Capital Properties owns the land beneath some of the city’s most prominent buildings, including the GTECH headquarters, the Citizens Bank tower and the former American Express building. The company owns only the land, not the buildings. It leases the land to the building owners on terms that range from 100 to 149 years, said Dreyer, the company treasurer.
Altogether, the company owns 18 acres in Capital Center area. The property lies north of Memorial Boulevard, between Francis and Canal Streets.

The company made its first purchase of real estate downtown this fall when it bought three attached buildings that site between North Main Street, Canal Street and Steeple Street, for $2.3 million in cash from David L. Golden.

The historic property includes a restaurant, 3 Steeple Street Bistro & Bar on the first floor of the property at 125 Canal St. Capital Properties had already owned the 20,500 sq. ft. parcel that the property sits on, Dreyer said.

The other major part of the company’s business is petroleum storage. It owns a nine-tank storage facility in East Providence, that has a capacity of 1 million barrels of fuel. It is used to stored home heating oil and diesel fuel. It leases the facility to Global Companies LLC and operates it on Global’s behalf.

Capital Properties was once the owner of the Providence and Worcester Railroad. In 1988, the two companies split, separating the railroad operations from the real estate holdings. Capital Properties maintained ownership of much of the land that was involved in the railroad operations.

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