UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                        WASHINGTON, DC  20549

                              FORM 10-KSB

  X	 	ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
      OF 1934
    		For the fiscal year ended December 31, 1998
		                    OR
	 	   TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE 
      ACT OF 1934
    		For the transition period from 		 to 			

Commission File Number  0-9380 

                            CAPITAL PROPERTIES, INC.					
               (Name of small business issuer in its charter)

     Rhode Island				                                	 		05-0386287
(State or other jurisdiction of              				IRS Employer Identification 
incorporation or organization)   			            	No.

100 Dexter Road, East Providence, Rhode Island     				    	02914		
(Address of principal executive offices)	    				        (Zip Code)

Issuer's telephone number            (401) 435-7171			
				

Securities registered under Section 12(b) of the Exchange Act:

                                       					Name of each exchange
	Title of each class		           			          on which registered        
	Common Stock-$1.00 par value    		        	American Stock Exchange

Securities registered under Section 12(g) of the Exchange Act:
          	                      None	    
                   	       (Title of Class)

Check whether the issuer (1) filed all reports required to be filed by 
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for 
such shorter period that the issuer was required to file such reports) and 
(2) has been subject to such filing requirements for the past 90 days.  
Yes    X      No 	

Check if disclosure of delinquent filers in response to Item 405 of 
Regulation S-B is not contained in this form, and no disclosure will be 
contained, to the best of issuer's knowledge, in definitive proxy or 
information statements incorporated by reference in Part III of this Form 
10-KSB or any amendment to this Form 10-KSB.	[X]

<PAGE>

For the year ended December 31, 1998, the Issuer's revenues totaled 
$2,793,000.

As of March 1, 1999, the aggregate market value of the voting stock held by
non-affiliates of the Issuer was $7,608,000, which excludes voting stock held
by directors, executive officers and holders of 5% or more of the voting 
power of the Issuer's common stock (without conceding that such persons are 
"affiliates" of the Issuer for purposes of federal securities law.)  The 
Issuer has no outstanding non-voting common equity.

As of March 1, 1999, the Issuer had 3,000,000 shares of Common Stock 
outstanding.

Documents Incorporated by Reference  -  Portions of the proxy statement for 
the 1999 annual meeting of shareholders are incorporated by reference into 
Part III.  Portions of the annual report to shareholders of Capital 
Properties, Inc. for the year ended December 31, 1998 are incorporated by 
reference into Parts I, II, and III.

Transitional Small Business Disclosure Format. Yes       No  X  

<PAGE>

                                    PART I


Item 1.  -  Description of Business

Business Development

The Issuer was organized as a business corporation under the laws of Rhode 
Island in 1983 as Providence and Worcester Company and is the successor by 
merger in 1983 to a corporation also named Providence and Worcester Company 
which was organized under the laws of Delaware in 1979.  The Issuer's 
corporate name was changed to Capital Properties, Inc. in 1984.

Business of Issuer

The Issuer owns certain properties in downtown Providence, Rhode Island which
it leases or is holding for lease to third parties (see "Properties Under 
Long-Term Leases" and "Properties Under Short-Term Leases," in Item 2 below).
The Issuer is the largest single landowner in the Capital Center Project area 
but is nevertheless subject to some measure of competition from other
landowners.

The Issuer owns all of the outstanding capital stock of Tri-State Displays, 
Inc., (through which the Issuer leases land for billboards along interstate 
and primary highways for outdoor advertising purposes) and all of the 
outstanding capital stock of Capital Terminal Company which was incorporated 
in 1996 (through which the Issuer operates its petroleum storage facilities).
(See "Petroleum Storage Facilities" in Item 2 below.)

References hereinafter to the "Issuer" are, unless the context indicates 
otherwise, collectively to the Issuer and its wholly-owned subsidiaries and 
its predecessors.

Miscellaneous

For information relating to the Issuer's dependence on one or a few major 
customers, see Note 8 of Notes to Consolidated Financial Statements in the 
Issuer's 1998 Annual Report to shareholders attached hereto as Exhibit 13 
(hereinafter referred as the "1998 Annual Report"), which Note is 
incorporated herein by reference.
                         
During the last two years, no monies were expended by the Issuer and its 
subsidiary on material research and development activities.
	
Compliance with federal, state and local provisions which have been enacted 
or adopted regulating the discharge of materials into the environment, or 
otherwise relating to the protection of the environment, has not had a 
material effect upon the capital expenditures, earnings or competitive 
position of the Issuer.

                                  I-1

<PAGE>

On December 31, 1998, the Issuer employed a total of 7 full-time employees 
and 1 part-time employee.


Item 2.  -  Description of Property

Principal Facilities

The Issuer's principal executive offices are located at its petroleum storage
facilities at 100 Dexter Road, East Providence, Rhode Island 02914.

Investment Policies and Investments in Real Estate

The Issuer has no established policy for the purchase of additional developed
or undeveloped property.  However, should suitable parcels become available 
in the general area of the Issuer"s current land holdings, the Issuer would 
consider such an acquisition depending on current levels of cash and the 
availability of financing.  Any properties acquired would most likely be 
leased primarily to developers under long-term leases.  The Issuer 
periodically invests its excess cash in United States government and 
governmental agency obligations maturing in not more than one year.

Description of Real Estate and Operating Data

All of the properties described below (except the petroleum storage 
facilities) are shown on a map on page 7 of the Issuer's 1998 Annual Report, 
which map is incorporated herein by reference.
     
All the properties described below (except for the air rights) are owned in 
fee by the Issuer.  There are no mortgages, liens or other encumbrances on 
such properties except for Parcel 22.
     
In the opinion of management, all of the properties described below are 
adequately covered by insurance.  Insurance is also required of all tenants, 
with the Issuer being named as an additional insured.
                           
Petroleum Storage Facilities -  The Issuer holds title to approximately 8 
acres of land fronting on the Seekonk River in East Providence, Rhode Island.
The property is used and operated primarily as a petroleum storage facility
(the Facilities) with aggregate storage capacity of 340,000 barrels. Although
the Issuer has received a height variance from the zoning board of appeals on
any new tanks to be erected, it has no present plans to erect any tanks at 
this time. The property can be further developed to contain several 
additional tanks with an aggregate storage capacity at least equal to the
current capacity. During 1999, the Issuer plans to construct a new expanded 
truck rack which will be fully automated and will have both top and bottom 
loading capabilities.  The estimated cost of construction of the truck rack 
is $1.5 million.

                                 I-2

<PAGE>

In January 1998, the Issuer purchased the Wilkesbarre Pier in the Port of 
Providence and its deep-water berth for receiving petroleum products by 
tanker. In January 1998, the Issuer also purchased the perpetual right to 
transport petroleum products from the Pier to its terminal property through 
pipelines owned by a third party.  

This property is the only independent petroleum storage facility with deep- 
water access in the market area.  All of the petroleum storage tanks and 
buildings are owned by the Issuer.

On October 1, 1996, the Issuer resumed possession of the Facilities and 
presently operates the Facilities for Global Companies, L.L.C. under a short- 
term agreement.  The Issuer and Global are negotiating to extend arrangements
for an additional three years plus options to extend on an annual basis.  

The following schedule sets forth certain information on the federal tax 
basis of that portion of the petroleum terminal property which is depreciated:

<TABLE>

     <S>                            <C>             <C>
                                   	Buildings           Tanks       
     Federal Tax Basis (cost)   				$191,021       	$2,246,787	
     Rate per year             	    2.5% to 5%     	3.33% to 20%
     Method                            	S/L            	S/L
     Life (Years)                  	20 to 40        5 to 33

</TABLE>

The 1998 real estate taxes are $43,098 for the petroleum storage facilities 
and $35,826 for the Wilkesbarre Pier at a $23.13 per Thousand Dollars of
assessed valuation tax rate.

Properties Under Long-Term Leases  -  The Issuer owns approximately 20.5 
acres of land within the Capital Center Project area of downtown Providence, 
including 1.9 acres of air rights over Amtrak's Northeast Corridor railroad 
tracks which run through downtown Providence.  (The land underlying the 
Parking Garage described below is also included in this acreage.)  See the 
map on page 7 of the Issuer's 1998 Annual Report, which map is incorporated 
herein by reference.

At December 31, 1998, land leases for three separate land parcels within this
area have commenced with remaining terms of up to 145 years.  These leases 
have scheduled rent increases over their terms.  For further information on 
the development of these parcels by the tenants, reference is made to the 
President's Report at pages 2 and 3 in the Issuer's 1998 Annual Report, which 
report is incorporated herein by reference.

As of December 31, 1998, the Issuer had entered into land leases for three 
additional land parcels with terms of 95, 145 and 149 years.  Under the 95- 
year land lease, the developer proposes to construct a hotel containing 
approximately 265 suites with parking.  Under the 145-year land lease, the 
developer proposes to construct an apartment complex containing approximately 
250 individual units with underground parking.  Under the 149-year land 
lease, the developer proposes to construct a building of approximately 
350,000 square feet of commercial space and a 

                                  I-3

<PAGE>

minimum of 200 public parking spaces.  All leases provide a period of time 
within which the developer may perform its due diligence, seek the approval 
of the plans for its complex from the Capital Center Commission and enter 
into a tax stabilization agreement with the City of Providence.  There can be
no assurance that the developers, individually or collectively, will be able 
to satisfy the conditions precedent to proceeding with the developments.  
Each developer's ability to obtain a tax stabilization agreement with the 
City of Providence may be adversely affected by the pending litigation 
between the City and the Company with respect to prior year taxes as 
discussed below.  The Issuer is unable to determine at this time when 
construction will begin and therefore the time at which the term of each lease 
will commence.

Properties Under Short-Term Leases:

Parking Garage  -  The Issuer owns a 360-car parking garage adjacent to a 
rail passenger station in downtown Providence, Rhode Island, together with 
the underlying land (the Parking Garage).  Through December 31, 1997, the 
Parking Garage was operated by the Issuer under a management agreement with a
firm experienced in parking operations.  Since January 1, 1998, the Parking 
Garage is leased under a short-term cancelable lease to the same firm that 
formerly managed the Parking Garage.  The annual rent is $117,600 ($.77 per 
square foot).  The federal tax cost basis of the Parking Garage (exclusive of
the underlying land) is $2,500,000, which is being depreciated on the straight-
line method at the rate of 2.5% per year over a 40-year life.  The 1998 real 
estate taxes are $99,038 on the Parking Garage and $60,925 on the underlying 
land using a $31.99 per Thousand Dollars of assessed valuation tax rate.

Parcels 3E, 3W, 4E, 4W and 6 in the Capital Center Project area and Parcels 
21 and 22 immediately adjacent to this area are leased for surface parking 
purposes to the same firm that leases the Parking Garage described above.  
The short-term lease on Parcel 6 will terminate when construction of the 
above-described project commences.  The Issuer continues to seek developers 
for the remaining parcels, and these leases can be terminated on short notice
should suitable development opportunities arise or when construction on a 
parcel commences as described above.
                           
In connection with Parcel 4E, in 1989 the Issuer entered into a non-binding 
letter of intent with a developer who proposes to construct an office 
building. The developer has delayed the project until such time as it has 
located a major tenant to occupy the building.

In connection with Parcel 4W, in March 1999 the Issuer entered into a letter 
of intent with a developer who proposes to construct an extended-stay hotel.  
It is anticipated that the Issuer and the developer  will enter into a lease 
for a term of 50 years.


Item 3.  Legal Proceedings

Petition for Assessment of Damages -  For a discussion of the litigation 
currently pending with the State of Rhode Island, reference is made to Note 2
of Notes to Consolidated Financial Statements in the Issuer's 1998 Annual 
Report, which note is incorporated herein by reference.

                                   I-4

<PAGE>

Property Tax Dispute  -   For a discussion of the property tax dispute and 
litigation currently pending with the City of Providence, Rhode Island, 
reference is made to Note 2 of  Notes to Consolidated Financial Statements in
the Issuer's 1998 Annual Report, which note is incorporated herein by 
reference.


Item 4.  Submission of Matters to a Vote of Security Holders

Not applicable.

                               I-5

<PAGE>

                              PART II


Item 5. Market for Common Equity and Related Stockholder Matters

See page 32 of the Issuer's 1998 Annual Report, which page is incorporated 
herein by reference.


Item 6. Management's Discussion and Analysis or Plan of Operation
	
See pages 8 through 13 of the Issuer's 1998 Annual Report, which pages are 
incorporated herein by reference.


Item 7. Financial Statements

The following consolidated financial statements of the Issuer and its 
subsidiaries, set forth at pages 15 through 30 of the Issuer's 1998 Annual 
Report, are incorporated herein by reference:

     Consolidated balance sheet--December 31, 1998

     Consolidated statements of income (loss) and retained 
       earnings--years ended December 31, 1998 and 1997

     Consolidated statements of cash flows--years ended 
       December 31, 1998 and 1997

     Notes to consolidated financial statements--years ended 
       December 31, 1998 and 1997


Item 8. Changes in and Disagreements With Accountants on Accounting and 
Financial Disclosure

Not applicable.

                                  II-1

<PAGE>

                                 PART III
  

Item 9. Directors, Executive Officers, Promoters and Control Persons of the 
Issuer

For information with respect to the directors and control persons of the 
Issuer, see Pages  3, 4 and 5 of the Issuer's definitive proxy statement for 
the 1999 annual meeting of its shareholders, which pages are incorporated 
herein by reference.

The following are the executive officers of the Issuer:

<TABLE>

<S>                     <C>       <C>              <C>        			
                                                			    Date of First
Name	                			Age     		Office Held 	    	Election to Office

Robert H. Eder          	66       	Chairman             	1995
Ronald P. Chrzanowski   	56       	President            	1997
Barbara J. Dreyer	       60	       Treasurer            	1997
Stephen J. Carlotti	     56       	Secretary	            1998

</TABLE>

All officers hold their respective offices until their successors are duly 
elected and qualified.  Mr. Chrzanowski served as Vice President of the 
Issuer from November 12, 1997 to December 31, 1997, and as President since 
that date.  Ms. Dreyer served as Secretary-Treasurer of the Issuer from 1987 
to 1995; as President and Treasurer from 1995 to December 31, 1997 and as 
Treasurer since that date.


Item 10. Executive Compensation

See page 4 of the Issuer's definitive proxy statement for the 1999 annual 
meeting of its shareholders, which page is incorporated herein by reference.


Item 11. Security Ownership of Certain Beneficial Owners and Management

See pages 4 and 5 of the Issuer's definitive proxy statement for the 1999 
annual meeting of its shareholders, which pages are incorporated herein by 
reference.


Item 12. Certain Relationships and Related Transactions

See pages 5 and 6 of the Issuer's definitive proxy statement for the 1999 
annual meeting of its shareholders, which pages are incorporated herein by 
reference.

                                  III-1

<PAGE>

Item 13. Exhibits and Reports on Form 8-K

(a)  Index of Exhibits:

    	(3) (a)  Restated articles of incorporation (incorporated by reference 
              to Exhibit 3 to the Issuer's report on Form 8A dated June 6, 
              1997).

   	     (b)  By-laws, as amended (incorporated by reference to Exhibit 3(b) 
              to the Issuer's quarterly report on Form 10-QSB for the quarter
              ended June 30, 1995).

   	(10) Material contracts:
        	(a)  Note from Providence and Worcester Railroad Company to Issuer 
              dated January 1, 1988 (incorporated by reference to Exhibit 
              10(a) to the Issuer's annual report on Form 10-KSB for the year
              ended December 31, 1992) as modified by Agreement dated August 
              16, 1995 (incorporated by reference to Exhibit 10(a) to the 
              Issuer's annual report on Form 10-KSB for the year ended 
              December 31, 1995).

         (b)  Leases between Metropark, Ltd., and Issuer:
              (i)   Dated December 1, 1997 (incorporated by reference to 
                    Exhibit 10(b) (iii) to the Issuer's annual report on 
                    Form 10-KSB for the year ended December 31, 1997).

              (ii)  Dated as of November 1, 1998; see page III-3.

              (iii)	Dated as of December 1, 1998; see page III-4.

              (iv)	 Dated as of January 1, 1999; see page III-5

              (v)	  Dated as of January 1, 1999; see page III-6

   	(13)   Annual report to shareholders for the year ended December 31, 
           1998; see page III-7. 
 
   	(21)   Subsidiaries of the Issuer; see page III-8.
 
    (22)   Plan of the Issuer's parcels in Downtown Providence (incorporated 
           by reference to page 7 of the Issuer's annual report to 
           shareholders for the year ended December 31, 1998), filed as 
           Exhibit 13 hereto.
 
    (27)  	Financial Data Schedule.
             
(b) For the quarter ended December 31, 1998, no reports on Form 8-K were 
filed.

                                      III-2

<PAGE>

                              EXHIBIT 10(b)(ii)





                                     LEASE

                                    BETWEEN

                               METROPARK, LTD. 

                                      AND

                          CAPITAL PROPERTIES, INC.


                       DATED AS OF NOVEMBER 1, 1998




                        (COVERING PARCELS 3E AND 4E)









                                    III-3

<PAGE>

                                   LEASE

    	THIS INDENTURE OF LEASE made as of the 1st day of November, 1998, by and
between CAPITAL PROPERTIES, INC., a Rhode Island corporation (hereinafter 
referred to as "Landlord"), and METROPARK, LTD., a Rhode Island corporation
(hereinafter referred to as "Tenant").

                      W I T N E S S E T H   T H A T:

    	In consideration of the rents, covenants and agreements to be paid, kept
and performed by Tenant, as hereinafter  provided, Landlord hereby demises 
and leases to Tenant, and Tenant hereby hires and takes from Landlord the 
real property known as Parcels 3E and 4E in the Capital Center, in 
Providence, Rhode Island, as shown on a plan attached to this Lease as 
Exhibit A (hereinafter called the "Premises").

    	TO HAVE AND TO HOLD the Premises, together with all rights, 
privileges, easements and appurtenances thereunto belonging and 
attaching, unto Tenant for a term of two (2) years (hereinafter 
called the "Term") commencing as of November 1, 1998, and ending 
on October 31, 2000.

   	This Lease is made upon the covenants and agreements herein 
set forth on the part of the respective parties, all of which the 
parties respectively agree to observe and comply with during the 
term hereof.

   	1. Rental.

       During the period from November 1, 1998 to October 
31, 1999, Tenant shall pay to Landlord an annual rental of One 
Hundred Seventeen Thousand Six Hundred ($117,600) Dollars payable 
in monthly installments of Nine Thousand Eight Hundred ($9,800) 
Dollars on the first day of each month without offset, deduction 
or abatement.  

		During the period from November 1, 1999 to October 31, 
2000, Tenant shall pay to Landlord an annual rental of One 
Hundred Twenty-three Thousand Six Hundred ($123,600) Dollars 
payable in monthly installments of Ten Thousand ($10,300) Dollars 
on the first day of each month.

    	2.	Utilities and Other Charges.

		      Tenant will pay directly before the same become delinquent 
all charges, duties, rates, license and permit fees and other 
amounts of every description to which the Premises or any part 
thereof or any improvement thereon erected or used by Tenant may, 
during the term hereof, be assessed or become liable for 
electricity, refuse collection, telephone or any other utillities 
or services or any connection or meters therefor, whether 
assessed to or payable by Landlord or Tenant.  Tenant will, 
within ten (10) days after receipt of written demand by Landlord, 
furnish Landlord with receipts or other evidence indicating that 
all such amounts have been paid.  Provided, however, that Tenant 
shall only be responsible for those charges and assessments which 
are for the period of its occupancy of the Premises.

    	3. Taxes and Assessments.

      		Landlord will pay and keep current the real estate taxes 
assessed against the premises.

    	4.	Compliance with Laws and Regulations.

       	Tenant will at all times during the term hereof keep the 
Premises in good order and a strictly sanitary condition and 
observe and perform all laws, ordinances, orders, rules and 
regulations now or hereafter made by any governmental authority 
for the time being applicable to the Premises or any improvement 
thereon or use thereof, and with the orders, rules and 
regulations of the National Board of Fire Underwriters or similar 
organization so far as the same may relate to the use of the 
Premises, and will indemnify Landlord against all actions, suits, 
damages and claims by whomsoever brought or made by reason of the 
nonobservance or nonperformance of such laws, ordinances, orders, 
rules and regulations, or of this covenant.  Nothing herein shall 
obligate the Tenant to construct any additional improvements on 
the Premises.

    	5.	Inspection.
	
	      	Tenant will permit Landlord and its agents at all 
reasonable times during the term hereof to enter the Premises and 
examine the state of repair and condition thereof, and the use 
being made of the same.  Landlord may also enter upon the 
Premises to perform any repairs or maintenance which Tenant has 
failed to perform hereunder, and to show the premises to 
prospective purchasers, tenants and mortgagees.  Further, 
Landlord shall have the right to have test borings done on the 
premises, and will use reasonable, good faith effort to avoid 
unreasonable interference with the Tenant's business thereon.

    	6.	Repair and Maintenance.

      		Tenant will, at its own expense, from time to time and at 
all times during the term hereof, well and substantially repair, 
maintain, amend and keep the Premises, together with all fixtures 
and items of personal property used or useful in connection 
therewith, with all necessary reparations and amendments 
whatsoever in as good order and condition as they now are or may 
be put in, reasonable wear and tear and damage by the elements 
and such unavoidable casualty against which insurance is not 
required hereunder excepted.  Tenant will maintain the signs on 
the Premises and fix all potholes that may develop.  Tenant will 
have the benefit of all warranties pertaining thereto.  Tenant 
will remove snow from the Premises and keep the sidewalks clean 
and free from ice and snow.  Landlord will be responsible for any 
capital improvements.

    	7.	Use.

      	Tenant shall use the Premises only for the operation of a 
parking lot and other accessories related to a parking lot which 
are approved by Landlord.

    	8.  Notices re Premises.

      		Landlord will forthwith furnish Tenant copies of any 
notices it receives regarding the Premises from any third parties 
which notices relate to the Tenant's use and occupancy of the 
Premises.

    	9.	Cancellation of Lease.

      		Either Landlord or Tenant may cancel this Lease upon 
thirty (30) days' written notice to the other.

   	10.	Insurance.

      		Tenant agrees to maintain at all times public liability 
insurance on an occurrence basis against all claims and demands 
for personal injury liability (including, without limitation, 
bodily injury, sickness, disease, and death) and damage to 
property which may be claimed to have occurred on the Land or in 
the Building in the event of injury to any number of persons or 
damage to property, arising out of any one occurrence, which 
shall, at the beginning of the Term, be at least equal to 
$1,000,000, and to name Landlord and any mortgagees and ground 
lessors designated by landlord as additional insured and furnish 
landlord with the certificates thereof; such insurance shall 
contain a provision that the Landlord, and each such mortgagee 
and ground lessor although named as an insured, shall 
nevertheless be entitled to recovery under said policy for any 
loss occasioned to it, its servants, agents and employees by 
reason of the negligence of the Tenant; all insurance required 
under the terms of this Lease shall be effected with insurers 
having a general policyholders rating of not less than A in 
Best's latest rating guide and shall not be canceled or modified 
without at least 30 days' prior written notice to each insured 
named therein.  Tenant shall provide landlord with certificates 
of all insurance required to be carried by Tenant under the Lease 
at or prior to the Commencement Date and prior to the expiration 
of each such policy.

   	11. Landlord's Costs and Expenses.

      		If Tenant shall fail to comply with any of its 
obligations hereunder, landlord may, upon ten (10) days' prior 
written notice to Tenant (or without notice in case of 
emergency), take any such action as may be reasonably required to 
cure any such default by Tenant.  Tenant will pay to Landlord, on 
demand, all costs and expenses, including reasonable attorneys' 
fees, incurred by Landlord in collecting any delinquent rents, or 
other charges payable by Tenant hereunder, or in connection with 
any litigation commenced by or against Tenant (other than 
condemnation proceedings) to which Landlord, without any fault on 
its part, shall be made a party.  All such amounts owing to 
Landlord shall constitute additional rent hereunder.

   	12.  Indemnification of Landlord.
 			
 			       12.1.  Tenant shall indemnify and save harmless Landlord 
(regardless of Tenant's covenant to insure) against and from any 
and all claims by or on behalf of any person or persons, firm or 
firms, corporation or corporations, arising from the use, 
occupancy, conduct or management of the Premises, unless done by 
or contributed to Landlord, any of its agents, contractors, 
servants, employees or licensees, and shall further indemnify and 
save Landlord harmless against and from any and all claims 
arising during the term hereof from any condition of the 
Premises, or arising from any breach or default on the part of 
Tenant in the performance of any covenant or agreement on the 
part of Tenant to be performed pursuant to the terms of this 
Lease, or arising from any act of Tenant or any of its agents, 
contractors, servants or employees to any person, firm or 
corporation occurring during the term hereof in or about the 
Premises or upon or under said areas, and from and against all 
costs, counsel fees, expenses or liabilities incurred in or about 
any such claim or action or proceeding brought thereon.
 
           12.2.  Tenant shall pay and indemnify Landlord against all 
legal costs and charges incurred in obtaining possession of the 
Premises after the default of Tenant or upon expiration or 
earlier termination of the term hereof, other than by reason of 
any default of Landlord, or in enforcing any covenant or 
agreement of Tenant herein contained.

    13.  Liens.
 
           13.1.  Tenant will not commit, suffer any act or neglect 
whereby the Premises or any improvements thereon or the estate of 
Landlord therein shall at any time during the term hereof become 
subject to any attachment, judgment, lien, charge or encumbrance 
whatsoever, except as herein expressly provided, and will 
indemnify and hold Landlord harmless from and against all loss, 
costs and expenses, including reasonable attorneys' fees, with 
respect thereto.
 
 			       13.2.	If due to any act or neglect of Tenant, any 
mechanic's, laborer's or materialmen's lien shall at any time be 
filed against the premises or any part hereof, Tenant, within 
thirty (30) days after notice of the filing thereof shall cause 
the same to be discharged of record by payment, bonding or 
otherwise, and if Tenant shall fail to cause the same to be 
discharged, then Landlord may, in addition to any other right or 
remedy, cause the same to be discharged, either by paying the 
amount claimed to be due, or by procuring the discharge of such 
lien by deposit or by bonding proceedings, and all amounts so 
paid by landlord, together with all reasonable costs and expenses 
incurred in connection therewith, and together with interest 
thereon at the rate of ten percent (10%) per annum from the 
respective dates of payment, shall be paid by Tenant to Landlord, 
on demand, as additional rent hereunder.
 
 			       13.3.	Nothing in this lease contained shall be deemed or 
construed in any way as constituting the consent or request of 
Landlord, express or implied by inference or otherwise, to any 
contractor, subcontractor, laborer, materialmen, architect or 
engineer for the performance of any labor or the furnishing of 
any materials or services for or in connection with the Premises 
or any part thereof.  Notice is hereby given that Landlord shall 
not be liable for any labor or materials or services furnished or 
to be furnished to Tenant upon credit, and that no mechanic's or 
other lien for any such labor, materials, or services shall 
attach to or affect the fee or reversionary or other estate or 
interest of Landlord in the Premises of and in this Lease.
 
    14.  Default.
 		
 			       14.1.	In the event that during the term hereof any of 
the following events shall occur (each of which shall be an 
"Event of Default");
 		
 				            (a)	Tenant shall default in the payment of any 
installment of the Rent for ten (10) days after the same shall 
become due, during which ten-day period Tenant may cure the 
default;
 	
 				            (b) 	Tenant or any permitted assignee of Tenant 
shall (i) apply for or consent to an appointment of a receiver, a 
trustee or liquidator of it or of all or a substantial part of 
its assets; (ii) make a general assignment for the benefit of 
creditors; (iii) be adjudicated a bankrupt or insolvent; (iv) 
file a voluntary petition in bankruptcy or a petition or an 
answer seeking reorganization or an arrangement with creditors to 
take advantage of any insolvency law or an answer admitting the 
material allegations of a petition filed against it in any 
bankruptcy, reorganization or insolvency proceeding or corporate 
action shall be taken by it for the purpose of effecting any of 
the foregoing;
 				
 				            (c)	An order, judgment or decree shall be entered, 
without the application, approval or consent of Tenant or any 
permitted assignee of Tenant by any court of competent 
jurisdiction, approving a petition seeking reorganization of 
Tenant or such assignee or appointing a receiver, trust or 
liquidator of Tenant or such assignee or of all or a substantial 
part of its assets and such order, judgment or decree shall 
continue unstayed and in effect for any period of sixty (60) 
consecutive days; or
 			
                 (d) Any other default by Tenant in performing any of 
its other obligations hereunder shall continue uncorrected for 
ten (10) days after receipt of written notice thereof from 
Landlord, during which period Tenant or such assignee may cure 
the default; then landlord may, by giving written notice to 
Tenant, either (a) terminate this Lease, (b) re-enter the 
Premises by summary proceedings or otherwise, expelling Tenant 
and removing all of Tenant's property therefrom, and relet the 
Premises and receive the rent therefrom, or (c) exercise any 
other remedies permitted by law.  Tenant shall also be liable for 
the reasonable cost of obtaining possession of and reletting the 
Premises and of any repairs and alterations or other payments 
necessary to prepare them for reletting.  Any and all such 
amounts shall be payable to Landlord upon demand.  Notwithstanding 
anything contained herein to the contrary, no termination of this Lease 
prior to the last day of the term hereof, except as provided in Section 15 
hereof, shall relieve Tenant of its liability and obligations under this 
Lease, and such liability and obligations shall survive any such 
termination.
 
           14.2.	In the event of any breach by Tenant of any of the 
covenants, agreements, terms or conditions contained in this Lease, Landlord 
shall be entitled to enjoin such breach or threatened breach and shall have 
the right to invoke any right and remedy allowed at law or in equity, or by 
statute or otherwise, as though reentry, summary proceedings and other 
remedies were not provided for in this Lease.
 
           14.3.	Each right and remedy of Landlord provided for in this Lease
shall be cumulative and shall be in addition to every other right or remedy 
provided for in this Lease or now or hereafter existing, at law or in equity,
or by statute or otherwise, and the exercise or beginning of the exercise by 
Landlord of any one or more of the rights or remedies provided for in this 
Lease, or now or hereafter existing at law or in equity, or by statute or 
otherwise, shall not preclude the simulatneous or later exercise by Landlord
of any or all other rights or remedies provided for in this Lease, or now or 
hereafter existing at law or in equity, or by statute or otherwise.
	
    15. Eminent Domain.

      		If the whole or any part of the demised premises shall be 
condemned or acquired by eminent domain for any public or quasi-
public use or purpose, then the term of this Lease shall cease 
and terminate as of the date of vesting of title in such 
proceeding and all rentals shall be paid up to the date of the 
vacating of the premises by Tenant and Tenant shall have no claim 
against Landlord nor the condemning authority for the value of 
any unexpired term of this Lease.

        In the event of any condemnation or taking as aforesaid, 
whether whole or partial, Tenant shall not be entitled to any 
part of the award paid for such condemnation and Landlord is to 
receive the full amount of such award, Tenant hereby expressly 
waiving any right or claim to any part thereof.

    16.	Condition of Premises.

		      Tenant represents that the Premises, the sidewalks and 
structures adjoining the same, and any subsurface conditions 
thereof, and the present uses and non-uses thereof, have been 
examined by Tenant, and Tenant agrees that it will accept the 
same in the condition or state in which they, or any of them, now 
are, without representation or warranty, express or implied in 
fact or by law, by Landlord, and without recourse to Landlord as 
to the nature, condition or usability thereof, or the use or uses 
to which the Premises, or any part thereof, may be put.
 
    17.		Independent Covenants--No Waiver.
 
 			       17.1.	Each and every of the covenants and agreements 
contained in this Lease shall be for all purposes construed to be 
separate and independent covenants and the waiver of the breach 
of any covenant contained hereby by Landlord shall in no way or 
manner discharge or relieve Tenant from Tenant's obligation to 
perform each and every of the covenants contained herein.
 
           17.2.	If any term or provision of this Lease or the 
application thereof to any person or circumstance shall to any 
extent be invalid or unenforceable, the remainder of this Lease, 
or the application of such term or provision to persons or 
circumstances other than those as to which it is invalid or 
unenforceable, shall not be affected thereby, and each term and 
provision of this Lease shall be valid and shall be enforced to 
the fullest extent permitted by law.
 
           17.3.	The failure of Landlord to insist in any one or 
more cases upon the strict performance of any of the covenants of 
this Lease shall not be construed as a waiver or a relinquishment 
for the future of such covenant.  A receipt by Landlord of rent 
with knowledge of the breach of any covenant hereof shall not be 
deemed a waiver of such breach, and no waiver by landlord of any 
provision of this Lease shall be deemed to have been made unless 
expressed in writing and signed by Landlord.  All remedies to 
which landlord may resort under the terms of this Lease or by law 
provided shall be cumulative.
	
    18.	Subordination.
	
		      This Lease and the rights of Tenant hereunder are subject 
and subordinate in all respects to all matters of record, 
including, without limitation, deeds and all mortgages which may 
now or hereafter be placed on or affect the Premises, or any part 
thereof, and/or Landlord's interest or estate therein, and to 
each advance made and/or hereafter to be made under any such 
mortgages, and to all renewals, modifications, consolidations, 
replacements and extensions thereof, and all substitutions.

    19.	Quiet Enjoyment.
	
	      	Landlord covenants that Tenant, upon paying the rent and 
performing the covenants hereof on the part of Tenant to be 
performed shall and may peaceably and quietly have, hold and 
enjoy the Premises and all related appurtenances, rights, 
privileges and easements throughout the term hereof without any 
lawful hindrance by landlord and any person claiming by, through 
or under it.

    20.	Return of Premises.
	
	      	At the expiration or other temination of the term hereof, 
Tenant will remove from the Premises its property and that of all 
claiming under it and will peaceably yield up to Landlord the 
Premises in as good condition in all respects as the same were at 
the commencement of this Lease, except for ordinary wear and 
tear, damage by the elements, by any exercise of the right of 
eminent domain or by public or other authority, or damage which 
Landlord is required herein to replace, restore or rebuild or 
damage for which no insurance is required hereunder.

    21.  Holdover.
	
	       	Tenant agrees to pay to landlord twice the total of all 
rent then applicable for each month or portion thereof Tenant 
shall retain possession of the Premises or any part thereof after 
the termination of this Lease (unless and to the extent such 
holding over shall be pursuant to a written agreement between 
Landlord and Tenant), whether by lapse of time or otherwise, and 
also to pay all damages sustained by landlord on account thereof; 
the provisions of this subsection shall not operate as a waiver 
by Landlord of any right of re-entry provided in this Lease or 
under law.  Tenant shall also pay all reasonable legal fees and 
damages incurred by Landlord as a result of such holdover.	

    22.  Limitation of Liability.

		       Tenant shall neither assert nor seek to enforce any claim 
for breach of this Lease against any of Landlord's assets other 
than Landlord's interest in the Premises, and Tenant agrees to 
look solely to such interest for the satisfaction of any 
liability of Landlord under this Lease, it being specifically 
agreed that in no event shall landlord (which term shall include, 
without limitation, any of the officers, employees, agents, 
attorneys, trustees, directors, partners, beneficiaries, joint 
venturers, members, stockholders or other principals or 
representatives, disclosed or undisclosed, thereof) ever be 
personally liable for any such liability.

    23.  No Recording of Lease.

		       Tenant hereby acknowledges and agrees that it shall not 
record this Lease or any notice or memorandum of this Lease in 
any land evidence records or any other publics without the 
express prior written consent of Landlord.  In the event of any 
such recording, Tenant shall be in default of this Agreement and 
Landlord shall have all rights and remedies available under law 
or in equity as a result of such recordation including, without 
limitation, the right to terminate this Lease.

    24.  Assignment and Subletting.

		       Tenant will not assign this Lease, in whole or in part, 
nor sublet all or any part of the Premises, nor license, nor 
pledge or encumber by mortgage or other instruments its interest 
in this Lease without landlord's prior written consent, which 
consent may be withheld by landlord in its sole and absolute 
discretion.  This prohibition includes any subletting or 
assignment which would otherwise occur by operation of law, 
merger, consolidation, reorganization, transfer or other change 
of Tenant's corporate or trustee in any federal or state 
bankruptcy, insolvency, or other proceedings.  Consent by 
landlord to any assignment or subletting shall not constitute a 
waiver of the foregoing prohibition with respect to any 
subsequent assignment or subletting.

    25.  Use of Hazardous Material.

       		Tenant shall not cause or permit any Hazardous Material to 
be brought upon, kept or used in or about the Premises by Tenant, 
its agents, employees, contractors or invitees without the prior 
written consent of Landlord.  If Tenant breaches the obligations 
stated in the preceding sentence, or if contamination of the 
Premises by Hazardous Material otherwise occurs, Tenant shall 
indemnify, protect, defend and hold Landlord harmless from any 
and all claims, judgments, damages, penalties, fines, costs, 
liabilities or losses (including, without limitation, diminution 
in value of the Premises, damages for the loss or restriction on 
use of rentable Premises or usable space or of any amenity of the 
Premises, damages arising from any adverse impact on marketing of 
Premises space, and sums paid in settlement of claims, attorneys' 
fees, consultant fees and expert fees) which arise during or 
after the Term as a result of such contamination.  This 
indemnification of Landlord by Tenant includes, without 
limitation, costs incurred in connection with any investigation 
of site conditions or any clean-up, remedial, removal or 
restoration work required by any federal, state or local 
government agency or political subdivision because of Hazardous 
Material present in the sole, surface water or groundwater on, 
near or under the Premises.

         As used herein, the term "Hazardous Material" means any 
hazardous or toxic substance, material or waste, including, but 
not limited to, those substances, materials, and wastes listed in 
the United States Department of Transportation Hazardous 
materials Table (49 CFR 172.101) or by the Environmental 
Protection Agency as hazardous substances (40CFR part 302) and 
amendments thereto, or such substances, materials and wastes that 
are or become regulated under any applicable local, state or 
federal law.

         Landlord and its agents shall have the right, but not the 
duty, to inspect the Premises at any time to determine whether 
Tenant is complying with the terms of this Lease.

    26.	Construction.

        The mention of the parties hereto by name or otherwise 
shall be construed as including and referring to their respective 
successors and assigns as well as to the parties themselves 
whenever such construction is required or admitted by the 
provisions hereof; and all covenants, agreements, conditions, 
rights, powers and privileges hereinbefore contained shall inure 
to the benefit of and be binding upon the successors and assigns 
of such parties, unless otherwise provided.

    27.	Permits.
	
		      Tenant, at its cost, shall obtain any necessary permits 
for the Premises from the City of Providence.

   	28.	Notices.

      		Whenever notice shall be given under this Lease, the same 
shall be in writing and shall be sent by certified or registered 
mail, return receipt requested as follows:

<TABLE>
           <S>               <C>
			        To the Landlord: 	100 Dexter Road
							                      East Providence, Rhode Island  02914

			        To the Tenant:		  c/o Charles Meyers
							                      56 Pine Street
							                      Providence, Rhode Island  02903

			        To the Tenant's   Charles Koutsogiane
		          Attorney:			     One Grove Avenue
							                      East Providence, RI   02914
</TABLE>

or to such other address or addresses as each party may from time 
to time designate by like notice to the other.  Said notice shall 
be valid and times begin to run hereunder upon receipt of the 
party to which said notice is given.

     IN WITNESS WHEREOF, the parties hereto have caused these 
presents to be executed in duplicate as of the day and year first 
above written.

CAPITAL PROPERTIES, INC.	             METROPARK, LTD.

By/s/Ronald P. Chrzanowski 		         By /s/ Charles Meyers	
		
  Ronald P. Chrzanowski                  Charles Meyers, President 
  President


STATE OF RHODE ISLAND
COUNTY OF PROVIDENCE

     In Providence, in said County on the 23rd day of October, 
1998, before me personally appeared Ronald P. Chrzanowski, 
President of Capital Properties, Inc., to me known and known by 
me to be the person executing the foregoing instrument on behalf 
of said corporation, and he acknowledged said instrument by him 
executed to be his free act and deed and the free act and deed of 
said corporation.		
                              						/s/ Gloria P. Hopkins		
	                                							Notary Public
                                 							Gloria P. Hopkins
                                 							My Commission Expires June 23, 
                                        2001

STATE OF RHODE ISLAND
COUNTY OF PROVIDENCE

	In Providence, in said County on the 22nd day of October, 
1998, before me personally appeared Charles Meyers, President of 
Metropark, Ltd., to me known and known by me to be the person 
executing the foregoing instrument on behalf of said corporation, 
and he acknowledged said instrument by him executed to be his 
free act and deed and the free act and deed of said corporation.


							                                 /s/ Carolyn M. Bouchard		
                                 							Notary Public






                                 GUARANTEE


     In consideration of the execution of the foregoing lease by the 
Landlord, the undersigned (jointly and severally, if more than 
one) guarantees that the Tenant will pay all rent thereunder and 
will perform all other terms, conditions or agreements on its 
part to be performed or fulfilled, and agrees that the foregoing 
lease may be amended from time to time by the parties thereto 
without notice to the undersigned.  The undersigned consents that 
extensions of time of payment or any other indulgences may be 
granted to the Tenant without notice to and without releasing or 
affecting in any way the liability of the undersigned and the 
undersigned waives demand and notice of default.  This guarantee 
is in addition to any other security which the Landlord may have 
for the performance of the Tenant's obligations and the Landlord 
may have the recourse to this guarantee without first pursuing 
the Landlord's remedies against such other security, if any.  The 
Landlord may release, in whole or in part, any other security 
without releasing or affecting in any way the liability of the 
undersigned.  In addition, the undersigned will pay to the 
Landlord all costs and expenses (including attorneys' fees) 
incurred in connection with the enforcement of this guarantee.
	
     Executed this  22  day of  October, 1998.

        											                 /s/ Charles Meyers		
                         											Charles Meyers



<PAGE>

                       EXHIBIT 10(b)(iii)




                                 LEASE

                                BETWEEN

                            METROPARK, LTD. 

                                  AND

                        CAPITAL PROPERTIES, INC.


                      DATED AS OF DECEMBER 1, 1998




                     (COVERING PARCELS 21 AND 22)




















                                   III-4
<PAGE>

                                 L E A S E

     THIS INDENTURE OF LEASE made as of the 1st day of December, 
1998, by and between CAPITAL PROPERTIES, INC., a Rhode Island 
corporation (hereinafter referred to as "Landlord"), and 
METROPARK, LTD., a Rhode Island corporation (hereinafter referred 
to as "Tenant").

                        W I T N E S S E T H   T H A T:

     In consideration of the rents, covenants and agreements to 
be paid, kept and performed by Tenant, as hereinafter  provided, 
Landlord hereby demises and leases to Tenant, and Tenant hereby 
hires and takes from Landlord the real property known as Parcels 
21 and 22 in the Capital Center, in Providence, Rhode Island, as 
shown on a plan attached to this Lease as Exhibit A (hereinafter 
called the "Premises").

     TO HAVE AND TO HOLD the Premises, together with all rights, 
privileges, easements and appurtenances thereunto belonging and 
attaching, unto Tenant for a term of two (2) years (hereinafter 
called the "Term") commencing as of December 1, 1998, and ending 
on November 30, 2000.

     This Lease is made upon the covenants and agreements herein 
set forth on the part of the respective parties, all of which the 
parties respectively agree to observe and comply with during the 
term hereof.

     1. Rental.

		      During the term hereof, Tenant shall pay to Landlord an 
annual rental of Ninety-six Thousand ($96,000) Dollars payable in 
monthly installments of Eight Thousand Hundred ($8,000) Dollars 
on the first day of each month.  

	    2.	Utilities and Other Charges.

		      Tenant will pay directly before the same become delinquent 
all charges, duties, rates, license and permit fees and other 
amounts of every description to which the Premises or any part 
thereof or any improvement thereon erected or used by Tenant may, 
during the term hereof, be assessed or become liable for 
electricity, refuse collection, telephone or any other utillities 
or services or any connection or meters therefor, whether 
assessed to or payable by Landlord or Tenant.  Tenant will, 
within ten (10) days after receipt of written demand by Landlord, 
furnish Landlord with receipts or other evidence indicating that 
all such amounts have been paid.  Provided, however, that Tenant 
shall only be responsible for those charges and assessments which 
are for the period of its occupancy of the Premises.

     3. Taxes and Assessments.

		      Landlord will pay and keep current the real estate taxes 
assessed against the premises.

     4.	Compliance with Laws and Regulations.

	       Tenant will at all times during the term hereof keep the 
Premises in good order and a strictly sanitary condition and 
observe and perform all laws, ordinances, orders, rules and 
regulations now or hereafter made by any governmental authority 
for the time being applicable to the Premises or any improvement 
thereon or use thereof, and with the orders, rules and 
regulations of the National Board of Fire Underwriters or similar 
organization so far as the same may relate to the use of the 
Premises, and will indemnify Landlord against all actions, suits, 
damages and claims by whomsoever brought or made by reason of the 
nonobservance or nonperformance of such laws, ordinances, orders, 
rules and regulations, or of this covenant.  Nothing herein shall 
obligate the Tenant to construct any additional improvements on 
the Premises.

     5.	Inspection.

		      Tenant will permit Landlord and its agents at all 
reasonable times during the term hereof to enter the Premises and 
examine the state of repair and condition thereof, and the use 
being made of the same.  Landlord may also enter upon the 
Premises to perform any repairs or maintenance which Tenant has 
failed to perform hereunder, and to show the premises to 
prospective purchasers, tenants and mortgagees.  Further, 
Landlord shall have the right to have test borings done on the 
premises, and will use reasonable, good faith effort to avoid 
unreasonable interference with the Tenant's business thereon.

     6.	Repair and Maintenance.

		      Tenant will, at its own expense, from time to time and at 
all times during the term hereof, well and substantially repair, 
maintain, amend and keep the Premises, together with all fixtures 
and items of personal property used or useful in connection 
therewith, with all necessary reparations and amendments 
whatsoever in as good order and condition as they now are or may 
be put in, reasonable wear and tear and damage by the elements 
and such unavoidable casualty against which insurance is not 
required hereunder excepted.  Tenant will maintain the signs on 
the Premises and fix all potholes that may develop.  Tenant will 
have the benefit of all warranties pertaining thereto.  Tenant 
will remove snow from the Premises and keep the sidewalks clean 
and free from ice and snow.  

     7.	Use.

	       Tenant shall use the Premises only for the operation of a 
parking lot and other accessory uses related to motor vehicles.

     8.  Notices re Premises.

		       Landlord will forthwith furnish Tenant copies of any 
notices it receives regarding the Premises from any third parties 
which notices relate to the Tenant's use and occupancy of the 
Premises.

     9.	Cancellation of Lease.

		      Either Landlord or Tenant may cancel this Lease upon 
thirty (30) days' written notice to the other.

    10.	Insurance.

		      Tenant will, at its own cost and expense, effect and 
maintain during the term hereof, a policy or policies of 
comprehensive general liability insurance, or its equivalent, 
with minimum limits of not less than $500,000 for injury to one 
or more persons in any one occurrence, and also insurance in the 
sum of not less than $1,000,000 against claims for property 
damage in any one accident, such policy or policies to name 
Landlord as additional assured, to require the insurer to give 
Landlord at least ten days' written notice of its intention to 
cancel, terminate or amend the insurance policy or policies in 
any material respect, and to cover the entire Premises.  Tenant 
may insure premises as part of a blanket policy.   

    11. Landlord's Costs and Expenses.

		      If Tenant shall fail to comply with any of its obligations 
hereunder, landlord may, upon ten (10) days' prior written notice 
to Tenant (or without notice in case of emergency), take any such 
action as may be reasonably required to cure any such default by 
Tenant.  Tenant will pay to Landlord, on demand, all costs and 
expenses, including reasonable attorneys' fees, incurred by 
Landlord in collecting any delinquent rents, or other charges 
payable by Tenant hereunder, or in connection with any litigation 
commenced by or against Tenant (other than condemnation 
proceedings) to which Landlord, without any fault on its part, 
shall be made a party.  All such amounts owing to Landlord shall 
constitute additional rent hereunder.

    12.  Indemnification of Landlord.
 
 			       12.1.  Tenant shall indemnify and save harmless Landlord 
(regardless of Tenant's covenant to insure) against and from any 
and all claims by or on behalf of any person or persons, firm or 
firms, corporation or corporations, arising from the use, 
occupancy, conduct or management of the Premises, unless done by 
or contributed to Landlord, any of its agents, contractors, 
servants, employees or licensees, and shall further indemnify and 
save Landlord harmless against and from any and all claims 
arising during the term hereof from any condition of the 
Premises, or arising from any breach or default on the part of 
Tenant in the performance of any covenant or agreement on the 
part of Tenant to be performed pursuant to the terms of this 
Lease, or arising from any act of Tenant or any of its agents, 
contractors, servants or employees to any person, firm or 
corporation occurring during the term hereof in or about the 
Premises or upon or under said areas, and from and against all 
costs, counsel fees, expenses or liabilities incurred in or about 
any such claim or action or proceeding brought thereon.
	
           12.2.	Tenant shall pay and indemnify Landlord against 
all legal costs and charges incurred in obtaining possession of 
the Premises after the default of Tenant or upon expiration or 
earlier termination of the term hereof, other than by reason of 
any default of Landlord, or in enforcing any covenant or 
agreement of Tenant herein contained.
	
    13.	Liens.
 
 			       13.1.	Tenant will not commit, suffer any act or neglect 
whereby the Premises or any improvements thereon or the estate of 
Landlord therein shall at any time during the term hereof become 
subject to any attachment, judgment, lien, charge or encumbrance 
whatsoever, except as herein expressly provided, and will 
indemnify and hold Landlord harmless from and against all loss, 
costs and expenses, including reasonable attorneys' fees, with 
respect thereto.
 
           13.2.	If due to any act or neglect of Tenant, any 
mechanic's, laborer's or materialmen's lien shall at any time be 
filed against the premises or any part hereof, Tenant, within 
thirty (30) days after notice of the filing thereof shall cause 
the same to be discharged of record by payment, bonding or 
otherwise, and if Tenant shall fail to cause the same to be 
discharged, then Landlord may, in addition to any other right or 
remedy, cause the same to be discharged, either by paying the 
amount claimed to be due, or by procuring the discharge of such 
lien by deposit or by bonding proceedings, and all amounts so 
paid by landlord, together with all reasonable costs and expenses 
incurred in connection therewith, and together with interest 
thereon at the rate of ten percent (10%) per annum from the 
respective dates of payment, shall be paid by Tenant to Landlord, 
on demand, as additional rent hereunder.
 
           13.3.	Nothing in this lease contained shall be deemed or 
construed in any way as constituting the consent or request of 
Landlord, express or implied by inference or otherwise, to any 
contractor, subcontractor, laborer, materialmen, architect or 
engineer for the performance of any labor or the furnishing of 
any materials or services for or in connection with the Premises 
or any part thereof.  Notice is hereby given that Landlord shall 
not be liable for any labor or materials or services furnished or 
to be furnished to Tenant upon credit, and that no mechanic's or 
other lien for any such labor, materials, or services shall 
attach to or affect the fee or reversionary or other estate or 
interest of Landlord in the Premises of and in this Lease.
 
     14.	Default.
 
 			       14.1.	In the event that during the term hereof any of 
the following events shall occur (each of which shall be an 
"Event of Default");
 
 				            (a)	Tenant shall default in the payment of any 
installment of the Rent for ten (10) days after the same shall 
become due, during which ten-day period Tenant may cure the 
default;
 
 				            (b) 	Tenant or any permitted assignee of Tenant 
shall (i) apply for or consent to an appointment of a receiver, a 
trustee or liquidator of it or of all or a substantial part of 
its assets; (ii) make a general assignment for the benefit of 
creditors; (iii) be adjudicated a bankrupt or insolvent; (iv) 
file a voluntary petition in bankruptcy or a petition or an 
answer seeking reorganization or an arrangement with creditors to 
take advantage of any insolvency law or an answer admitting the 
material allegations of a petition filed against it in any 
bankruptcy, reorganization or insolvency proceeding or corporate 
action shall be taken by it for the purpose of effecting any of 
the foregoing;

 				            (c)	An order, judgment or decree shall be entered, 
without the application, approval or consent of Tenant or any 
permitted assignee of Tenant by any court of competent 
jurisdiction, approving a petition seeking reorganization of 
Tenant or such assignee or appointing a receiver, trust or 
liquidator of Tenant or such assignee or of all or a substantial 
part of its assets and such order, judgment or decree shall 
continue unstayed and in effect for any period of sixty (60) 
consecutive days; or
 
 			             (d)	Any other default by Tenant in performing any of 
its other obligations hereunder shall continue uncorrected for 
ten (10) days after receipt of written notice thereof from 
Landlord, during which period Tenant or such assignee may cure 
the default; then landlord may, by giving written notice to 
Tenant, either (a) terminate this Lease, (b) re-enter the 
Premises by summary proceedings or otherwise, expelling Tenant 
and removing all of Tenant's property therefrom, and relet the 
Premises and receive the rent therefrom, or (c) exercise any 
other remedies permitted by law.  Tenant shall also be liable for 
the reasonable cost of obtaining possession of and reletting the 
Premises and of any repairs and alterations or other payments 
necessary to prepare them for reletting.  Any and all such 
amounts shall be payable to Landlord upon demand.  
Notwithstanding anything contained herein to the contrary, no 
termination of this Lease prior to the last day of the term 
hereof, except as provided in Section 15 hereof, shall relieve 
Tenant of its liability and obligations under this Lease, and 
such liability and obligations shall survive any such 
termination.
 
 			       14.2.	In the event of any breach by Tenant of any of 
the covenants, agreements, terms or conditions contained in this 
Lease, Landlord shall be entitled to enjoin such breach or 
threatened breach and shall have the right to invoke any right 
and remedy allowed at law or in equity, or by statute or 
otherwise, as though reentry, summary proceedings and other 
remedies were not provided for in this Lease.
 
 			       14.3.	Each right and remedy of Landlord provided for  
in this Lease shall be cumulative and shall be in addition to 
every other right or remedy provided for in this Lease or now or 
hereafter existing, at law or in equity, or by statute or 
otherwise, and the exercise or beginning of the exercise by 
Landlord of any one or more of the rights or remedies provided 
for in this Lease, or now or hereafter existing at law or in 
equity, or by statute or otherwise, shall not preclude the 
simulatneous or later exercise by Landlord of any or all other 
rights or remedies provided for in this Lease, or now or 
hereafter existing at law or in equity, or by statute or 
otherwise.
	
	   15. Eminent Domain.
	
		      If the whole or any part of the demised premises shall be 
condemned or acquired by eminent domain for any public or quasi-
public use or purpose, then the term of this Lease shall cease 
and terminate as of the date of vesting of title in such 
proceeding and all rentals shall be paid up to the date of the 
vacating of the premises by Tenant and Tenant shall have no claim 
against Landlord nor the condemning authority for the value of 
any unexpired term of this Lease.

		      In the event of any condemnation or taking as aforesaid, 
whether whole or partial, Tenant shall not be entitled to any 
part of the award paid for such condemnation and Landlord is to 
receive the full amount of such award, Tenant hereby expressly 
waiving any right or claim to any part thereof.

    16.	Condition of Premises.

		      Tenant represents that the Premises, the sidewalks and 
structures adjoining the same, and any subsurface conditions 
thereof, and the present uses and non-uses thereof, have been 
examined by Tenant, and Tenant agrees that it will accept the 
same in the condition or state in which they, or any of them, now 
are, without representation or warranty, express or implied in 
fact or by law, by Landlord, and without recourse to Landlord as 
to the nature, condition or usability thereof, or the use or uses 
to which the Premises, or any part thereof, may be put.
 
    17.		Independent Covenants--No Waiver.
 
 			       17.1.	Each and every of the covenants and agreements 
contained in this Lease shall be for all purposes construed to be 
separate and independent covenants and the waiver of the breach 
of any covenant contained hereby by Landlord shall in no way or 
manner discharge or relieve Tenant from Tenant's obligation to 
perform each and every of the covenants contained herein.
 
           17.2.	If any term or provision of this Lease or the 
application thereof to any person or circumstance shall to any 
extent be invalid or unenforceable, the remainder of this Lease, 
or the application of such term or provision to persons or 
circumstances other than those as to which it is invalid or 
unenforceable, shall not be affected thereby, and each term and 
provision of this Lease shall be valid and shall be enforced to 
the fullest extent permitted by law.
 
 			       17.3.	The failure of Landlord to insist in any one or 
more cases upon the strict performance of any of the covenants of 
this Lease shall not be construed as a waiver or a relinquishment 
for the future of such covenant.  A receipt by Landlord of rent 
with knowledge of the breach of any covenant hereof shall not be 
deemed a waiver of such breach, and no waiver by landlord of any 
provision of this Lease shall be deemed to have been made unless 
expressed in writing and signed by Landlord.  All remedies to 
which landlord may resort under the terms of this Lease or by law 
provided shall be cumulative.
	
	   18.	Subordination.
	
		      This Lease and the rights of Tenant hereunder are subject 
and subordinate in all respects to all matters of record, 
including, without limitation, deeds and all mortgages which may 
now or hereafter be placed on or affect the Premises, or any part 
thereof, and/or Landlord's interest or estate therein, and to 
each advance made and/or hereafter to be made under any such 
mortgages, and to all renewals, modifications, consolidations, 
replacements and extensions thereof, and all substitutions 
therefor; provided, however, that before such subordination shall 
be effective, Landlord shall cause the mortgagee, or other party 
in interest, as the case may be, to deliver to Tenant an assent 
to this Lease, in proper form for recording whereby such 
mortgagee or other party agrees that no foreclosure of such 
mortgage or any action taken with respect thereto, by such 
mortgagee or any other person claiming by or through or under 
such mortgage (or other interest) shall disturb the possession of 
Tenant under this Lease so long as Tenant is not in default 
hereunder, and that the validity and continuance of this Lease 
will be so recognized.  Simultaneously with the delivery of such 
an agreement, Tenant agrees to execute and deliver an instrument 
in proper form for recording, wherein Tenant agrees to and does 
subordinate this Lease to the liens of the mortgagees and others 
as above-mentioned, and to all renewals, modifications, 
consolidations and replacements and extensions of such mortgages 
thereunder, and to any persons claiming by, through or under such 
mortgages or other such interest.

	   19.	Quiet Enjoyment.

		      Landlord covenants that Tenant, upon paying the rent and 
performing the covenants hereof on the part of Tenant to be 
performed shall and may peaceably and quietly have, hold and 
enjoy the Premises and all related appurtenances, rights, 
privileges and easements throughout the term hereof without any 
lawful hindrance by landlord and any person claiming by, through 
or under it.

   	20.	Return of Premises.

		      At the expiration or other termination of the term hereof, 
Tenant will remove from the Premises its property and that of all 
claiming under it and will peaceably yield up to Landlord the 
Premises in as good condition in all respects as the same were at 
the commencement of this Lease, except for ordinary wear and 
tear, damage by the elements, by any exercise of the right of 
eminent domain or by public or other authority, or damage which 
Landlord is required herein to replace, restore or rebuild or 
damage for which no insurance is required hereunder.

   	21. Construction.

		      The mention of the parties hereto by name or otherwise 
shall be construed as including and referring to their respective 
successors and assigns as well as to the parties themselves 
whenever such construction is required or admitted by the 
provisions hereof; and all covenants, agreements, conditions, 
rights, powers and privileges hereinbefore contained shall inure 
to the benefit of and be binding upon the successors and assigns 
of such parties, unless otherwise provided.		

   	22.	Permits.

		      Tenant, at its cost, shall obtain any necessary permits 
for the Premises from the City of Providence.

   	23.	Notices.

		      Whenever notice shall be given under this Lease, the same 
shall be in writing and shall be sent by certified or registered 
mail, return receipt requested as follows:

<TABLE>
             <S>                <C>

			           To the Landlord: 	100 Dexter Road
							                         East Providence, Rhode Island  02914

			           To the Tenant:		  c/o Charles Meyers
							                         56 Pine Street
							                         Providence, Rhode Island  02903

			           To the Tenant's  	Charles Koutsogiane
			            Attorney:			     One Grove Avenue
							                         East Providence, Rhode Island  02914

</TABLE>
or to such other address or addresses as each party may from time 
to time designate by like notice to the other.  Said notice shall 
be valid and times begin to run hereunder upon receipt of the 
party to which said notice is given.

		  IN WITNESS WHEREOF, the parties hereto have caused these 
presents to be executed in duplicate as of the day and year first 
above written.

CAPITAL PROPERTIES, INC.	             METROPARK, LTD.



By /s/Ronald P. Chrzanowski 		        By /s/Charles Meyers, 
      President	
  Ronald P. Chrzanowski                  Charles Meyers, President 
  President

STATE OF RHODE ISLAND
COUNTY OF PROVIDENCE

    	In Providence, in said County on the 23rd day of October, 
1998, before me personally appeared Ronald P. Chrzanowski, 
President of Capital Properties, Inc., to me known and known by 
me to be the person executing the foregoing instrument on behalf 
of said corporation, and he acknowledged said instrument by him 
executed to be his free act and deed and the free act and deed of 
said corporation.		

                  						              /s/Gloria P. Hopkins			
	
						                                Notary Public
                                						Gloria P. Hopkins
                                						My Commission Expires June 23, 2001

STATE OF RHODE ISLAND
COUNTY OF PROVIDENCE

     In Providence, in said County on the 22nd day of October, 
1998, before me personally appeared Charles Meyers, President of 
Metropark, Ltd., to me known and known by me to be the person 
executing the foregoing instrument on behalf of said corporation, 
and he acknowledged said instrument by him executed to be his 
free act and deed and the free act and deed of said corporation.

                               							/s/Carolyn M. Bouchard		
                               							Notary Public


                               GUARANTEE


    	In consideration of the execution of the foregoing lease by the 
Landlord, the undersigned (jointly and severally, if more than 
one) guarantees that the Tenant will pay all rent thereunder and 
will perform all other terms, conditions or agreements on its 
part to be performed or fulfilled, and agrees that the foregoing 
lease may be amended from time to time by the parties thereto 
without notice to the undersigned.  The undersigned consents that 
extensions of time of payment or any other indulgences may be 
granted to the Tenant without notice to and without releasing or 
affecting in any way the liability of the undersigned and the 
undersigned waives demand and notice of default.  This guarantee 
is in addition to any other security which the Landlord may have 
for the performance of the Tenant's obligations and the Landlord 
may have the recourse to this guarantee without first pursuing 
the Landlord's remedies against such other security, if any.  The 
Landlord may release, in whole or in part, any other security 
without releasing or affecting in any way the liability of the 
undersigned.  In addition, the undersigned will pay to the 
Landlord all costs and expenses (including attorneys' fees) 
incurred in connection with the enforcement of this guarantee.

    	Executed this 22nd day of  October, 1998.

											                          /s/Charles Meyers		
                          											Charles Meyers




















<PAGE>

                               EXHIBIT 10(b)(iv)




                                    LEASE

                                   BETWEEN

                                METROPARK, LTD. 

                                    AND

                           CAPITAL PROPERTIES, INC.


                          DATED AS OF JANUARY 1, 1999




                             (COVERING PARCEL 6)



















                                      III-5

<PAGE>
                                    L E A S E

   	THIS INDENTURE OF LEASE made as of the 1st day of January, 
1999 by and between CAPITAL PROPERTIES, INC., a Rhode Island 
corporation (hereinafter referred to as "Landlord"), and 
METROPARK, LTD., a Rhode Island corporation (hereinafter referred 
to as "Tenant").

                          W I T N E S S E T H   T H A T:

   	 In consideration of the rents, covenants and agreements to 
be paid, kept and performed by Tenant, as hereinafter  provided, 
Landlord hereby demises and leases to Tenant, and Tenant hereby 
hires and takes from Landlord the real property known as Parcel 6 
in the Capital Center, in Providence, Rhode Island, as shown on a 
plan attached to this Lease as Exhibit A (hereinafter called the 
"Premises").

     TO HAVE AND TO HOLD the Premises, together with all rights, 
privileges, easements and appurtenances thereunto belonging and 
attaching, unto Tenant for a term (hereinafter called the "Term") 
commencing as of January 1, 1999 and ending on December 31, 1999.

     This Lease is made upon the covenants and agreements herein 
set forth on the part of the respective parties, all of which the 
parties respectively agree to observe and comply with during the 
term hereof.

	    1. Rental.

		      During the term hereof, Tenant shall pay to Landlord an 
annual rental of One Hundred Fifty Thousand ($150,000) Dollars 
payable in monthly installments of Twelve Thousand Five Hundred 
($12,500) Dollars on the first day of each month without offset, 
deduction or abatement.  

     2.	Utilities and Other Charges.

		      Tenant will pay directly before the same become delinquent 
all charges, duties, rates, license and permit fees and other 
amounts of every description to which the Premises or any part 
thereof or any improvement thereon erected or used by Tenant may, 
during the term hereof, be assessed or become liable for 
electricity, refuse collection, telephone or any other utillities 
or services or any connection or meters therefor, whether 
assessed to or payable by Landlord or Tenant.  Tenant will, 
within ten (10) days after receipt of written demand by Landlord, 
furnish Landlord with receipts or other evidence indicating that 
all such amounts have been paid.  Provided, however, that Tenant 
shall only be responsible for those charges and assessments which 
are for the period of its occupancy of the Premises.

     3. Taxes and Assessments.

		      Landlord will pay and keep current the real estate taxes 
assessed against the premises.

     4.	Compliance with Laws and Regulations.

	       Tenant will at all times during the term hereof keep the 
Premises in good order and a strictly sanitary condition and 
observe and perform all laws, ordinances, orders, rules and 
regulations now or hereafter made by any governmental authority 
for the time being applicable to the Premises or any improvement 
thereon or use thereof, and with the orders, rules and 
regulations of the National Board of Fire Underwriters or similar 
organization so far as the same may relate to the use of the 
Premises, and will indemnify Landlord against all actions, suits, 
damages and claims by whomsoever brought or made by reason of the 
nonobservance or nonperformance of such laws, ordinances, orders, 
rules and regulations, or of this covenant.  Nothing herein shall 
obligate the Tenant to construct any additional improvements on 
the Premises.

     5.	Inspection.

		      Tenant will permit Landlord and its agents at all 
reasonable times during the term hereof to enter the Premises and 
examine the state of repair and condition thereof, and the use 
being made of the same.  Landlord may also enter upon the 
Premises to perform any repairs or maintenance which Tenant has 
failed to perform hereunder, and to show the premises to 
prospective purchasers, tenants and mortgagees.  Further, 
Landlord shall have the right to have test borings done on the 
premises, and will use reasonable, good faith effort to avoid 
unreasonable interference with the Tenant's business thereon.

     6.	Repair and Maintenance.

		      Tenant will, at its own expense, from time to time and at 
all times during the term hereof, well and substantially repair, 
maintain, amend and keep the Premises, together with all fixtures 
and items of personal property used or useful in connection 
therewith, with all necessary reparations and amendments 
whatsoever in as good order and condition as they now are or may 
be put in, reasonable wear and tear and damage by the elements 
and such unavoidable casualty against which insurance is not 
required hereunder excepted.  Tenant will maintain the signs on 
the Premises and fix all potholes that may develop.  Tenant will 
have the benefit of all warranties pertaining thereto.  Tenant 
will remove snow from the Premises and keep the sidewalks clean 
and free from ice and snow.  Landlord will be responsible for any 
capital improvements.

     7.	Use.

       	Tenant shall use the Premises only for the operation of a 
parking lot and other accessories related to a parking lot which 
are approved by Landlord.

     8.  Notices re Premises.

         Landlord will forthwith furnish Tenant copies of any 
notices it receives regarding the Premises from any third parties 
which notices relate to the Tenant's use and occupancy of the 
Premises.

     9.	Cancellation of Lease.

		      Either Landlord or Tenant may cancel this Lease upon 
thirty (30) days' written notice to the other.

    10.	Insurance.

        Tenant agrees to maintain at all times public liability 
insurance on an occurrence basis against all claims and demands 
for personal injury liability (including, without limitation, 
bodily injury, sickness, disease, and death) and damage to 
property which may be claimed to have occurred on the Land or in 
the Building in the event of injury to any number of persons or 
damage to property, arising out of any one occurrence, which 
shall, at the beginning of the Term, be at least equal to 
$1,000,000, and to name Landlord and any mortgagees and ground 
lessors designated by landlord as additional insured and furnish 
landlord with the certificates thereof; such insurance shall 
contain a provision that the Landlord, and each such mortgagee 
and ground lessor although named as an insured, shall 
nevertheless be entitled to recovery under said policy for any 
loss occasioned to it, its servants, agents and employees by 
reason of the negligence of the Tenant; all insurance required 
under the terms of this Lease shall be effected with insurers 
having a general policyholders rating of not less than A in 
Best's latest rating guide and shall not be canceled or modified 
without at least 30 days' prior written notice to each insured 
named therein.  Tenant shall provide landlord with certificates 
of all insurance required to be carried by Tenant under the Lease 
at or prior to the Commencement Date and prior to the expiration 
of each such policy.

    11. Landlord's Costs and Expenses.

		      If Tenant shall fail to comply with any of its obligations 
hereunder, landlord may, upon ten (10) days' prior written notice 
to Tenant (or without notice in case of emergency), take any such 
action as may be reasonably required to cure any such default by 
Tenant.  Tenant will pay to Landlord, on demand, all costs and 
expenses, including reasonable attorneys' fees, incurred by 
Landlord in collecting any delinquent rents, or other charges 
payable by Tenant hereunder, or in connection with any litigation 
commenced by or against Tenant (other than condemnation 
proceedings) to which Landlord, without any fault on its part, 
shall be made a party.  All such amounts owing to Landlord shall 
constitute additional rent hereunder.

    12.  Indemnification of Landlord.
 
 			       12.1.  Tenant shall indemnify and save harmless Landlord 
(regardless of Tenant's covenant to insure) against and from any 
and all claims by or on behalf of any person or persons, firm or 
firms, corporation or corporations, arising from the use, 
occupancy, conduct or management of the Premises, unless done by 
or contributed to Landlord, any of its agents, contractors, 
servants, employees or licensees, and shall further indemnify and 
save Landlord harmless against and from any and all claims 
arising during the term hereof from any condition of the 
Premises, or arising from any breach or default on the part of 
Tenant in the performance of any covenant or agreement on the 
part of Tenant to be performed pursuant to the terms of this 
Lease, or arising from any act of Tenant or any of its agents, 
contractors, servants or employees to any person, firm or 
corporation occurring during the term hereof in or about the 
Premises or upon or under said areas, and from and against all 
costs, counsel fees, expenses or liabilities incurred in or about 
any such claim or action or proceeding brought thereon.
	
           12.2.	Tenant shall pay and indemnify Landlord against 
all legal costs and charges incurred in obtaining possession of 
the Premises after the default of Tenant or upon expiration or 
earlier termination of the term hereof, other than by reason of 
any default of Landlord, or in enforcing any covenant or 
agreement of Tenant herein contained.

    13.	Liens.
 
 			       13.1.	Tenant will not commit, suffer any act or neglect 
whereby the Premises or any improvements thereon or the estate of 
Landlord therein shall at any time during the term hereof become 
subject to any attachment, judgment, lien, charge or encumbrance 
whatsoever, except as herein expressly provided, and will 
indemnify and hold Landlord harmless from and against all loss, 
costs and expenses, including reasonable attorneys' fees, with 
respect thereto.
 
           13.2.	If due to any act or neglect of Tenant, any 
mechanic's, laborer's or materialmen's lien shall at any time be 
filed against the premises or any part hereof, Tenant, within 
thirty (30) days after notice of the filing thereof shall cause 
the same to be discharged of record by payment, bonding or 
otherwise, and if Tenant shall fail to cause the same to be 
discharged, then Landlord may, in addition to any other right or 
remedy, cause the same to be discharged, either by paying the 
amount claimed to be due, or by procuring the discharge of such 
lien by deposit or by bonding proceedings, and all amounts so 
paid by landlord, together with all reasonable costs and expenses 
incurred in connection therewith, and together with interest 
thereon at the rate of ten percent (10%) per annum from the 
respective dates of payment, shall be paid by Tenant to Landlord, 
on demand, as additional rent hereunder.
 
           13.3.	Nothing in this lease contained shall be deemed or 
construed in any way as constituting the consent or request of 
Landlord, express or implied by inference or otherwise, to any 
contractor, subcontractor, laborer, materialmen, architect or 
engineer for the performance of any labor or the furnishing of 
any materials or services for or in connection with the Premises 
or any part thereof.  Notice is hereby given that Landlord shall 
not be liable for any labor or materials or services furnished or 
to be furnished to Tenant upon credit, and that no mechanic's or 
other lien for any such labor, materials, or services shall 
attach to or affect the fee or reversionary or other estate or 
interest of Landlord in the Premises of and in this Lease.
 
    14.	Default.
 
 			       14.1.	In the event that during the term hereof any of 
the following events shall occur (each of which shall be an 
"Event of Default");
 
 				            (a)	Tenant shall default in the payment of any 
installment of the Rent for ten (10) days after the same shall 
become due, during which ten-day period Tenant may cure the 
default;

 				            (b) 	Tenant or any permitted assignee of Tenant 
shall (i) apply for or consent to an appointment of a receiver, a 
trustee or liquidator of it or of all or a substantial part of 
its assets; (ii) make a general assignment for the benefit of 
creditors; (iii) be adjudicated a bankrupt or insolvent; (iv) 
file a voluntary petition in bankruptcy or a petition or an 
answer seeking reorganization or an arrangement with creditors to 
take advantage of any insolvency law or an answer admitting the 
material allegations of a petition filed against it in any 
bankruptcy, reorganization or insolvency proceeding or corporate 
action shall be taken by it for the purpose of effecting any of 
the foregoing;
 
 				            (c)	An order, judgment or decree shall be entered, 
without the application, approval or consent of Tenant or any 
permitted assignee of Tenant by any court of competent 
jurisdiction, approving a petition seeking reorganization of 
Tenant or such assignee or appointing a receiver, trust or 
liquidator of Tenant or such assignee or of all or a substantial 
part of its assets and such order, judgment or decree shall 
continue unstayed and in effect for any period of sixty (60) 
consecutive days; or
 
 			             (d)	Any other default by Tenant in performing any of 
its other obligations hereunder shall continue uncorrected for 
ten (10) days after receipt of written notice thereof from 
Landlord, during which period Tenant or such assignee may cure 
the default; then landlord may, by giving written notice to 
Tenant, either (a) terminate this Lease, (b) re-enter the 
Premises by summary proceedings or otherwise, expelling Tenant 
and removing all of Tenant's property therefrom, and relet the 
Premises and receive the rent therefrom, or (c) exercise any 
other remedies permitted by law.  Tenant shall also be liable for 
the reasonable cost of obtaining possession of and reletting the 
Premises and of any repairs and alterations or other payments 
necessary to prepare them for reletting.  Any and all such 
amounts shall be payable to Landlord upon demand.  
Notwithstanding anything contained herein to the contrary, no 
termination of this Lease prior to the last day of the term 
hereof, except as provided in Section 15 hereof, shall relieve 
Tenant of its liability and obligations under this Lease, and 
such liability and obligations shall survive any such 
termination.
 
 			       14.2.	In the event of any breach by Tenant of any of 
the covenants, agreements, terms or conditions contained in this 
Lease, Landlord shall be entitled to enjoin such breach or 
threatened breach and shall have the right to invoke any right 
and remedy allowed at law or in equity, or by statute or 
otherwise, as though reentry, summary proceedings and other 
remedies were not provided for in this Lease.
 
        			14.3.	Each right and remedy of Landlord provided for  
in this Lease shall be cumulative and shall be in addition to 
every other right or remedy provided for in this Lease or now or 
hereafter existing, at law or in equity, or by statute or 
otherwise, and the exercise or beginning of the exercise by 
Landlord of any one or more of the rights or remedies provided 
for in this Lease, or now or hereafter existing at law or in 
equity, or by statute or otherwise, shall not preclude the 
simulatneous or later exercise by Landlord of any or all other 
rights or remedies provided for in this Lease, or now or 
hereafter existing at law or in equity, or by statute or 
otherwise.
	
	    15.	Eminent Domain.
	
	       	If the whole or any part of the demised premises shall be 
condemned or acquired by eminent domain for any public or quasi-
public use or purpose, then the term of this Lease shall cease 
and terminate as of the date of vesting of title in such 
proceeding and all rentals shall be paid up to the date of the 
vacating of the premises by Tenant and Tenant shall have no claim 
against Landlord nor the condemning authority for the value of 
any unexpired term of this Lease.

    	In the event of any condemnation or taking as aforesaid, 
whether whole or partial, Tenant shall not be entitled to any 
part of the award paid for such condemnation and Landlord is to 
receive the full amount of such award, Tenant hereby expressly 
waiving any right or claim to any part thereof.

    	16.	Condition of Premises.

       		Tenant represents that the Premises, the sidewalks and 
structures adjoining the same, and any subsurface conditions 
thereof, and the present uses and non-uses thereof, have been 
examined by Tenant, and Tenant agrees that it will accept the 
same in the condition or state in which they, or any of them, now 
are, without representation or warranty, express or implied in 
fact or by law, by Landlord, and without recourse to Landlord as 
to the nature, condition or usability thereof, or the use or uses 
to which the Premises, or any part thereof, may be put.
 
     17.		Independent Covenants--No Waiver.
 
       			17.1.	Each and every of the covenants and agreements 
contained in this Lease shall be for all purposes construed to be 
separate and independent covenants and the waiver of the breach 
of any covenant contained hereby by Landlord shall in no way or 
manner discharge or relieve Tenant from Tenant's obligation to 
perform each and every of the covenants contained herein.
 
 		      	17.2.	If any term or provision of this Lease or the 
application thereof to any person or circumstance shall to any 
extent be invalid or unenforceable, the remainder of this Lease, 
or the application of such term or provision to persons or 
circumstances other than those as to which it is invalid or 
unenforceable, shall not be affected thereby, and each term and 
provision of this Lease shall be valid and shall be enforced to 
the fullest extent permitted by law.
 
      			17.3.	The failure of Landlord to insist in any one or 
more cases upon the strict performance of any of the covenants of 
this Lease shall not be construed as a waiver or a relinquishment 
for the future of such covenant.  A receipt by Landlord of rent 
with knowledge of the breach of any covenant hereof shall not be 
deemed a waiver of such breach, and no waiver by landlord of any 
provision of this Lease shall be deemed to have been made unless 
expressed in writing and signed by Landlord.  All remedies to 
which landlord may resort under the terms of this Lease or by law 
provided shall be cumulative.
	
    	18.	Subordination.
	
	       	This Lease and the rights of Tenant hereunder are subject 
and subordinate in all respects to all matters of record, 
including, without limitation, deeds and all mortgages which may 
now or hereafter be placed on or affect the Premises, or any part 
thereof, and/or Landlord's interest or estate therein, and to 
each advance made and/or hereafter to be made under any such 
mortgages, and to all renewals, modifications, consolidations, 
replacements and extensions thereof, and all substitutions.

    	19.	Quiet Enjoyment.

       		Landlord covenants that Tenant, upon paying the rent and 
performing the covenants hereof on the part of Tenant to be 
performed shall and may peaceably and quietly have, hold and 
enjoy the Premises and all related appurtenances, rights, 
privileges and easements throughout the term hereof without any 
lawful hindrance by landlord and any person claiming by, through 
or under it.

    	20.	Return of Premises.

       		At the expiration or other temination of the term hereof, 
Tenant will remove from the Premises its property and that of all 
claiming under it and will peaceably yield up to Landlord the 
Premises in as good condition in all respects as the same were at 
the commencement of this Lease, except for ordinary wear and 
tear, damage by the elements, by any exercise of the right of 
eminent domain or by public or other authority, or damage which 
Landlord is required herein to replace, restore or rebuild or 
damage for which no insurance is required hereunder.

    	21.	Holdover.
	
	       	Tenant agrees to pay to landlord twice the total of all 
rent then applicable for each month or portion thereof Tenant 
shall retain possession of the Premises or any part thereof after 
the termination of this Lease (unless and to the extent such 
holding over shall be pursuant to a written agreement between 
Landlord and Tenant), whether by lapse of time or otherwise, and 
also to pay all damages sustained by landlord on account thereof; 
the provisions of this subsection shall not operate as a waiver 
by Landlord of any right of re-entry provided in this Lease or 
under law.  Tenant shall also pay all reasonable legal fees and 
damages incurred by Landlord as a result of such holdover.	

     22.	Limitation of Liability.
		
		       Tenant shall neither assert nor seek to enforce any claim 
for breach of this Lease against any of Landlord's assets other 
than Landlord's interest in the Premises, and Tenant agrees to 
look solely to such interest for the satisfaction of any 
liability of Landlord under this Lease, it being specifically 
agreed that in no event shall landlord (which term shall include, 
without limitation, any of the officers, employees, agents, 
attorneys, trustees, directors, partners, beneficiaries, joint 
venturers, members, stockholders or other principals or 
representatives, disclosed or undisclosed, thereof) ever be 
personally liable for any such liability.

     23.	No Recording of Lease.

       		Tenant hereby acknowledges and agrees that it shall not 
record this Lease or any notice or memorandum of this Lease in 
any land evidence records or any other publics without the 
express prior written consent of Landlord.  In the event of any 
such recording, Tenant shall be in default of this Agreement and 
Landlord shall have all rights and remedies available under law 
or in equity as a result of such recordation including, without 
limitation, the right to terminate this Lease.

     24.	Assignment and Subletting.

       		Tenant will not assign this Lease, in whole or in part, 
nor sublet all or any part of the Premises, nor license, nor 
pledge or encumber by mortgage or other instruments its interest 
in this Lease without landlord's prior written consent, which 
consent may be withheld by landlord in its sole and absolute 
discretion.  This prohibition includes any subletting or 
assignment which would otherwise occur by operation of law, 
merger, consolidation, reorganization, transfer or other change 
of Tenant's corporate or trustee in any federal or state 
bankruptcy, insolvency, or other proceedings.  Consent by 
landlord to any assignment or subletting shall not constitute a 
waiver of the foregoing prohibition with respect to any 
subsequent assignment or subletting.

     25.	Use of Hazardous Material.

       		Tenant shall not cause or permit any Hazardous Material to 
be brought upon, kept or used in or about the Premises by Tenant, 
its agents, employees, contractors or invitees without the prior 
written consent of Landlord.  If Tenant breaches the obligations 
stated in the preceding sentence, or if contamination of the 
Premises by Hazardous Material otherwise occurs, Tenant shall 
indemnify, protect, defend and hold Landlord harmless from any 
and all claims, judgments, damages, penalties, fines, costs, 
liabilities or losses (including, without limitation, diminution 
in value of the Premises, damages for the loss or restriction on 
use of rentable Premises or usable space or of any amenity of the 
Premises, damages arising from any adverse impact on marketing of 
Premises space, and sums paid in settlement of claims, attorneys' 
fees, consultant fees and expert fees) which arise during or 
after the Term as a result of such contamination.  This 
indemnification of Landlord by Tenant includes, without 
limitation, costs incurred in connection with any investigation 
of site conditions or any clean-up, remedial, removal or 
restoration work required by any federal, state or local 
government agency or political subdivision because of Hazardous 
Material present in the sole, surface water or groundwater on, 
near or under the Premises.
	
	    	As used herein, the term  "Hazardous Material" means any 
hazardous or toxic substance, material or waste, including, but 
not limited to, those substances, materials, and wastes listed in 
the United States Department of Transportation Hazardous 
materials Table (49 CFR 172.101) or by the Environmental 
Protection Agency as hazardous substances (40CFR part 302) and 
amendments thereto, or such substances, materials and wastes that 
are or become regulated under any applicable local, state or 
federal law.
		
	    Landlord and its agents shall have the right, but not the 
duty, to inspect the Premises at any time to determine whether 
Tenant is complying with the terms of this Lease.

    	26.	Construction.
		
		        The mention of the parties hereto by name or otherwise 
shall be construed as including and referring to their respective 
successors and assigns as well as to the parties themselves 
whenever such construction is required or admitted by the 
provisions hereof; and all covenants, agreements, conditions, 
rights, powers and privileges hereinbefore contained shall inure 
to the benefit of and be binding upon the successors and assigns 
of such parties, unless otherwise provided.

    	27.	Permits.

       		Tenant, at its cost, shall obtain any necessary permits 
for the Premises from the City of Providence.

    	28.	Notices.

       		Whenever notice shall be given under this Lease, the same 
shall be in writing and shall be sent by certified or registered 
mail, return receipt requested as follows:

<TABLE>
         <S>               <C>
      			To the Landlord: 	100 Dexter Road
                    							East Providence, Rhode Island  02914

      			To the Tenant:  		c/o Charles Meyers
                    							56 Pine Street
                    							Providence, Rhode Island  02903

      			To the Tenant's 		Charles Koutsogiane
      			  Attorney:	    		One Grove Avenue
                    							East Providence, Rhode Island  02914
</TABLE>
or to such other address or addresses as each party may from time 
to time designate by like notice to the other.  Said notice shall 
be valid and times begin to run hereunder upon receipt of the 
party to which said notice is given.

   		IN WITNESS WHEREOF, the parties hereto have caused these 
presents to be executed in duplicate as of the day and year first 
above written.

CAPITAL PROPERTIES, INC.	              METROPARK, LTD.

By/s/Ronald P. Chrzanowski 	          	By/s/Charles Meyers, 
Ronald P. Chrzanowski	             Charles Meyers, President 
President



STATE OF RHODE ISLAND
COUNTY OF PROVIDENCE

    	In Providence, in said County on the 10th day of December, 
1998, before me personally appeared Ronald P. Chrzanowski, 
President of Capital Properties, Inc., to me known and known by 
me to be the person executing the foregoing instrument on behalf 
of said corporation, and he acknowledged said instrument by him 
executed to be his free act and deed and the free act and deed of 
said corporation.
					
				                            			/s/Gloria P. Hopkins		
	                           							Notary Public
                            							Gloria P. Hopkins
                            							My Commission Expires June 23, 2001

STATE OF RHODE ISLAND
COUNTY OF PROVIDENCE

    	In Providence, in said County on the 9th day of  December, 
1998, before me personally appeared Charles Meyers, President of 
Metropark, Ltd., to me known and known by me to be the person 
executing the foregoing instrument on behalf of said corporation, 
and he acknowledged said instrument by him executed to be his 
free act and deed and the free act and deed of said corporation.

                            							/s/ Carolyn M. Bouchard		
                            							Notary Public


                                 GUARANTEE


    	In consideration of the execution of the foregoing lease by the 
Landlord, the undersigned (jointly and severally, if more than 
one) guarantees that the Tenant will pay all rent thereunder and 
will perform all other terms, conditions or agreements on its 
part to be performed or fulfilled, and agrees that the foregoing 
lease may be amended from time to time by the parties thereto 
without notice to the undersigned.  The undersigned consents that 
extensions of time of payment or any other indulgences may be 
granted to the Tenant without notice to and without releasing or 
affecting in any way the liability of the undersigned and the 
undersigned waives demand and notice of default.  This guarantee 
is in addition to any other security which the Landlord may have 
for the performance of the Tenant's obligations and the Landlord 
may have the recourse to this guarantee without first pursuing 
the Landlord's remedies against such other security, if any.  The 
Landlord may release, in whole or in part, any other security 
without releasing or affecting in any way the liability of the 
undersigned.  In addition, the undersigned will pay to the 
Landlord all costs and expenses (including attorneys' fees) 
incurred in connection with the enforcement of this guarantee.
	
Executed this 9th day of  December, 1998.


                        											/s/Charles Meyers			
                        											Charles Meyers

<PAGE>


                           EXHIBIT 10(b)(v)




                               LEASE

                              BETWEEN

                           METROPARK, LTD. 

                               AND

                      CAPITAL PROPERTIES, INC.


                    DATED AS OF JANUARY 1, 1999




                       (COVERING PARCEL 7A)




















                                 III-6

<PAGE>
      
                               L E A S E

    	THIS INDENTURE OF LEASE made as of the 1st day of January, 
1999, by and between CAPITAL PROPERTIES, INC., a Rhode Island 
corporation (hereinafter referred to as "Landlord"), and 
METROPARK, LTD., a Rhode Island corporation (hereinafter referred 
to as "Tenant").

                   W I T N E S S E T H   T H A T:

    	In consideration of the rents, covenants and agreements to 
be paid, kept and performed by Tenant, as hereinafter  provided, 
Landlord hereby demises and leases to Tenant, and Tenant hereby 
hires and takes from Landlord the real property known as the 
parking garage adjacent to the Providence train station located 
on Parcel 7A in the Capital Center, in Providence, Rhode Island, 
as shown on a plan attached to this Lease as Exhibit A 
(hereinafter called the "Premises").

    	TO HAVE AND TO HOLD the Premises, together with all rights, 
privileges, easements and appurtenances thereunto belonging and 
attaching, unto Tenant for a term (hereinafter called the "Term") 
commencing as of January 1, 1999, and ending on December 31, 
1999.

    	This Lease is made upon the covenants and agreements herein 
set forth on the part of the respective parties, all of which the 
parties respectively agree to observe and comply with during the 
term hereof.

    	1. Rental.

      		During the term hereof, Tenant shall pay to Landlord an 
annual rental of One Hundred Twenty-three Thousand Six Hundred 
($123,600) Dollars payable in monthly installments of Ten 
Thousand Three Hundred ($10,300) Dollars on the first day of each 
month without offset, deduction or abatement.  

    	2.	Utilities and Other Charges.

      		Tenant will pay directly before the same become delinquent 
all charges, duties, rates, license and permit fees and other 
amounts of every description to which the Premises or any part 
thereof or any improvement thereon erected or used by Tenant may, 
during the term hereof, be assessed or become liable for 
electricity, refuse collection, telephone or any other utillities 
or services or any connection or meters therefor, whether 
assessed to or payable by Landlord or Tenant.  Tenant will, 
within ten (10) days after receipt of written demand by Landlord, 
furnish Landlord with receipts or other evidence indicating that 
all such amounts have been paid.  Provided, however, that Tenant 
shall only be responsible for those charges and assessments which 
are for the period of its occupancy of the Premises.

    	3. Taxes and Assessments.

      		Landlord will pay and keep current the real estate taxes 
assessed against the premises.


    	4.	Compliance with Laws and Regulations.

       	Tenant will at all times during the term hereof keep the 
Premises in good order and a strictly sanitary condition and 
observe and perform all laws, ordinances, orders, rules and 
regulations now or hereafter made by any governmental authority 
for the time being applicable to the Premises or any improvement 
thereon or use thereof, and with the orders, rules and 
regulations of the National Board of Fire Underwriters or similar 
organization so far as the same may relate to the use of the 
Premises, and will indemnify Landlord against all actions, suits, 
damages and claims by whomsoever brought or made by reason of the 
nonobservance or nonperformance of such laws, ordinances, orders, 
rules and regulations, or of this covenant.  Nothing herein shall 
obligate the Tenant to construct any additional improvements on 
the Premises.

    	5.	Inspection.

      		Tenant will permit Landlord and its agents at all 
reasonable times during the term hereof to enter the Premises and 
examine the state of repair and condition thereof, and the use 
being made of the same.  Landlord may also enter upon the 
Premises to perform any repairs or maintenance which Tenant has 
failed to perform hereunder, and to show the premises to 
prospective purchasers, tenants and mortgagees in such a fashion 
not to unreasonably interfere with Tenant's business operations.  

    	6.	Repair and Maintenance.

      		Tenant will, at its own expense, from time to time and at 
all times during the term hereof, well and substantially repair, 
maintain, amend and keep the Premises, together with all fixtures 
and items of personal property used or useful in connection 
therewith, including the sprinkler system, with all necessary 
reparations and amendments whatsoever in as good order and 
condition as they now are or may be put in, reasonable wear and 
tear and damage by the elements and such unavoidable casualty 
against which insurance is not required hereunder excepted.  
Tenant will maintain the signs on the Premises. Tenant will have 
the benefit of all warranties pertaining thereto.  Landlord will 
be responsible for any capital replacement or improvement.  

    	7.	Use.

      		Tenant shall use the Premises only for the operation of a 
parking garage and other accessories related to a parking garage 
which are approved by Landlord.

    	8. Notices re Premises.

      		Landlord will forthwith furnish Tenant copies of any 
notices it receives regarding the Premises from any third parties 
which notices relate to the Tenant's use and occupancy of the 
Premises.

    	9.	Cancellation of Lease.

      		Either Landlord or Tenant may cancel this Lease upon 
thirty (30) days' written notice to the other.

   	10.	Insurance.

      		Tenant agrees to maintain at all times public liability 
insurance on an occurrence basis against all claims and demands 
for personal injury liability (including, without limitation, 
bodily injury, sickness, disease, and death) and damage to 
property which may be claimed to have occurred on the Land or in 
the Building in the event of injury to any number of persons or 
damage to property, arising out of any one occurrence, which 
shall, at the beginning of the Term, be at least equal to 
$1,000,000, and to name Landlord and any mortgagees and ground 
lessors designated by landlord as additional insured and furnish 
landlord with the certificates thereof; such insurance shall 
contain a provision that the Landlord, and each such mortgagee 
and ground lessor although named as an insured, shall 
nevertheless be entitled to recovery under said policy for any 
loss occasioned to it, its servants, agents and employees by 
reason of the negligence of the Tenant; all insurance required 
under the terms of this Lease shall be effected with insurers 
having a general policyholders rating of not less than A in 
Best's latest rating guide and shall not be canceled or modified 
without at least 30 days' prior written notice to each insured 
named therein.  Tenant shall provide landlord with certificates 
of all insurance required to be carried by Tenant under the Lease 
at or prior to the Commencement Date and prior to the expiration 
of each such policy.

    	11. Landlord's Costs and Expenses.

       		If Tenant shall fail to comply with any of its obligations 
hereunder, landlord may, upon ten (10) days' prior written notice 
to Tenant (or without notice in case of emergency), take any such 
action as may be reasonably required to cure any such default by 
Tenant.  Tenant will pay to Landlord, on demand, all costs and 
expenses, including reasonable attorneys' fees, incurred by 
Landlord in collecting any delinquent rents, or other charges 
payable by Tenant hereunder, or in connection with any litigation 
commenced by or against Tenant (other than condemnation 
proceedings) to which Landlord, without any fault on its part, 
shall be made a party.  All such amounts owing to Landlord shall 
constitute additional rent hereunder.

    	12. Indemnification of Landlord.
 
      			12.1.  Tenant shall indemnify and save harmless Landlord 
(regardless of Tenant's covenant to insure) against and from any 
and all claims by or on behalf of any person or persons, firm or 
firms, corporation or corporations, arising from the use, 
occupancy, conduct or management of the Premises, unless done by 
or contributed to Landlord, any of its agents, contractors, 
servants, employees or licensees, and shall further indemnify and 
save Landlord harmless against and from any and all claims 
arising during the term hereof from any condition of the 
Premises, or arising from any breach or default on the part of 
Tenant in the performance of any covenant or agreement on the 
part of Tenant to be performed pursuant to the terms of this 
Lease, or arising from any act of Tenant or any of its agents, 
contractors, servants or employees to any person, firm or 
corporation occurring during the term hereof in or about the 
Premises or upon or under said areas, and from and against all 
costs, counsel fees, expenses or liabilities incurred in or about 
any such claim or action or proceeding brought thereon.

         12.2.	Tenant shall pay and indemnify Landlord against 
all legal costs and charges incurred in obtaining possession of 
the Premises after the default of Tenant or upon expiration or 
earlier termination of the term hereof, other than by reason of 
any default of Landlord, or in enforcing any covenant or 
agreement of Tenant herein contained.

    	13.	Liens.
 
      			13.1.	Tenant will not commit, suffer any act or neglect 
whereby the Premises or any improvements thereon or the estate of 
Landlord therein shall at any time during the term hereof become 
subject to any attachment, judgment, lien, charge or encumbrance 
whatsoever, except as herein expressly provided, and will 
indemnify and hold Landlord harmless from and against all loss, 
costs and expenses, including reasonable attorneys' fees, with 
respect thereto.
 
      			13.2.	If due to any act or neglect of Tenant, any 
mechanic's, laborer's or materialmen's lien shall at any time be 
filed against the premises or any part hereof, Tenant, within 
thirty (30) days after notice of the filing thereof shall cause 
the same to be discharged of record by payment, bonding or 
otherwise, and if Tenant shall fail to cause the same to be 
discharged, then Landlord may, in addition to any other right or 
remedy, cause the same to be discharged, either by paying the 
amount claimed to be due, or by procuring the discharge of such 
lien by deposit or by bonding proceedings, and all amounts so 
paid by landlord, together with all reasonable costs and expenses 
incurred in connection therewith, and together with interest 
thereon at the rate of ten percent (10%) per annum from the 
respective dates of payment, shall be paid by Tenant to Landlord, 
on demand, as additional rent hereunder.
 
     			13.3.	Nothing in this lease contained shall be deemed or 
construed in any way as constituting the consent or request of 
Landlord, express or implied by inference or otherwise, to any 
contractor, subcontractor, laborer, materialmen, architect or 
engineer for the performance of any labor or the furnishing of 
any materials or services for or in connection with the Premises 
or any part thereof.  Notice is hereby given that Landlord shall 
not be liable for any labor or materials or services furnished or 
to be furnished to Tenant upon credit, and that no mechanic's or 
other lien for any such labor, materials, or services shall 
attach to or affect the fee or reversionary or other estate or 
interest of Landlord in the Premises of and in this Lease.
 
    	14.	Default.
 
      			14.1.	In the event that during the term hereof any of 
the following events shall occur (each of which shall be an 
"Event of Default");
 
           				(a)	Tenant shall default in the payment of any 
installment of the Rent for ten (10) days after the same shall 
become due, during which ten-day period Tenant may cure the 
default;
 
           				(b) 	Tenant or any permitted assignee of Tenant 
shall (i) apply for or consent to an appointment of a receiver, a 
trustee or liquidator of it or of all or a substantial part of 
its assets; (ii) make a general assignment for the benefit of 
creditors; (iii) be adjudicated a bankrupt or insolvent; (iv) 
file a voluntary petition in bankruptcy or a petition or an 
answer seeking reorganization or an arrangement with creditors to 
take advantage of any insolvency law or an answer admitting the 
material allegations of a petition filed against it in any 
bankruptcy, reorganization or insolvency proceeding or corporate 
action shall be taken by it for the purpose of effecting any of 
the foregoing;
 
           				(c)	An order, judgment or decree shall be entered, 
without the application, approval or consent of Tenant or any 
permitted assignee of Tenant by any court of competent 
jurisdiction, approving a petition seeking reorganization of 
Tenant or such assignee or appointing a receiver, trust or 
liquidator of Tenant or such assignee or of all or a substantial 
part of its assets and such order, judgment or decree shall 
continue unstayed and in effect for any period of sixty (60) 
consecutive days; or
 
            			(d)	Any other default by Tenant in performing any of 
its other obligations hereunder shall continue uncorrected for 
ten (10) days after receipt of written notice thereof from 
Landlord, during which period Tenant or such assignee may cure 
the default; then landlord may, by giving written notice to 
Tenant, either (a) terminate this Lease, (b) re-enter the 
Premises by summary proceedings or otherwise, expelling Tenant 
and removing all of Tenant's property therefrom, and relet the 
Premises and receive the rent therefrom, or (c) exercise any 
other remedies permitted by law.  Tenant shall also be liable for 
the reasonable cost of obtaining possession of and reletting the 
Premises and of any repairs and alterations or other payments 
necessary to prepare them for reletting.  Any and all such 
amounts shall be payable to Landlord upon demand.  
Notwithstanding anything contained herein to the contrary, no 
termination of this Lease prior to the last day of the term 
hereof, except as provided in Section 15 hereof, shall relieve 
Tenant of its liability and obligations under this Lease, and 
such liability and obligations shall survive any such 
termination.
 
         14.2.	In the event of any breach by Tenant of any of 
the covenants, agreements, terms or conditions contained in this 
Lease, Landlord shall be entitled to enjoin such breach or 
threatened breach and shall have the right to invoke any right 
and remedy allowed at law or in equity, or by statute or 
otherwise, as though reentry, summary proceedings and other 
remedies were not provided for in this Lease.
 
      			14.3.	Each right and remedy of Landlord provided for  
in this Lease shall be cumulative and shall be in addition to 
every other right or remedy provided for in this Lease or now or 
hereafter existing, at law or in equity, or by statute or 
otherwise, and the exercise or beginning of the exercise by 
Landlord of any one or more of the rights or remedies provided 
for in this Lease, or now or hereafter existing at law or in 
equity, or by statute or otherwise, shall not preclude the 
simultaneous or later exercise by Landlord of any or all other 
rights or remedies provided for in this Lease, or now or 
hereafter existing at law or in equity, or by statute or 
otherwise.
	
     15.	Eminent Domain.

       		If the whole or any part of the demised premises shall be 
condemned or acquired by eminent domain for any public or quasi-
public use or purpose, then the term of this Lease shall cease 
and terminate as of the date of vesting of title in such 
proceeding and all rentals shall be paid up to the date of the 
vacating of the premises by Tenant and Tenant shall have no claim 
against Landlord nor the condemning authority for the value of 
any unexpired term of this Lease.

       	In the event of any condemnation or taking as aforesaid, 
whether whole or partial, Tenant shall not be entitled to any 
part of the award paid for such condemnation and Landlord is to 
receive the full amount of such award, Tenant hereby expressly 
waiving any right or claim to any part thereof.

    	16.	Condition of Premises.

       		Tenant represents that the Premises, has been examined by 
Tenant, and Tenant agrees that it will accept the same in the 
condition or state in which they, or any of them, now are, 
without representation or warranty, express or implied in fact or 
by law, by Landlord, and without recourse to Landlord as to the 
nature, condition or usability thereof, or the use or uses to 
which the Premises, or any part thereof, may be put.
 
     17.	Independent Covenants--No Waiver.
 
      			17.1.	Each and every of the covenants and agreements 
contained in this Lease shall be for all purposes construed to be 
separate and independent covenants and the waiver of the breach 
of any covenant contained hereby by Landlord shall in no way or 
manner discharge or relieve Tenant from Tenant's obligation to 
perform each and every of the covenants contained herein.
 
      			17.2.	If any term or provision of this Lease or the 
application thereof to any person or circumstance shall to any 
extent be invalid or unenforceable, the remainder of this Lease, 
or the application of such term or provision to persons or 
circumstances other than those as to which it is invalid or 
unenforceable, shall not be affected thereby, and each term and 
provision of this Lease shall be valid and shall be enforced to 
the fullest extent permitted by law.
 
      			17.3.	The failure of Landlord to insist in any one or 
more cases upon the strict performance of any of the covenants of 
this Lease shall not be construed as a waiver or a relinquishment 
for the future of such covenant.  A receipt by Landlord of rent 
with knowledge of the breach of any covenant hereof shall not be 
deemed a waiver of such breach, and no waiver by landlord of any 
provision of this Lease shall be deemed to have been made unless 
expressed in writing and signed by Landlord.  All remedies to 
which landlord may resort under the terms of this Lease or by law 
provided shall be cumulative.

    	18.	Subordination.
	
	       	This Lease and the rights of Tenant hereunder are subject 
and subordinate in all respects to all matters of record, 
including, without limitation, deeds and all mortgages which may 
now or hereafter be placed on or affect the Premises, or any part 
thereof, and/or Landlord's interest or estate therein, and to 
each advance made and/or hereafter to be made under any such 
mortgages, and to all renewals, modifications, consolidations, 
replacements and extensions thereof, and all substitutions.

    	19.	Quiet Enjoyment.

       		Landlord covenants that Tenant, upon paying the rent and 
performing the covenants hereof on the part of Tenant to be 
performed shall and may peaceably and quietly have, hold and 
enjoy the Premises and all related appurtenances, rights, 
privileges and easements throughout the term hereof without any 
lawful hindrance by landlord and any person claiming by, through 
or under it.

    	20.	Return of Premises.

       		At the expiration or other temination of the term hereof, 
Tenant will remove from the Premises its property and that of all 
claiming under it and will peaceably yield up to Landlord the 
Premises in as good condition in all respects as the same were at 
the commencement of this Lease, except for ordinary wear and 
tear, damage by the elements, by any exercise of the right of 
eminent domain or by public or other authority, or damage which 
Landlord is required herein to replace, restore or rebuild or 
damage for which no insurance is required hereunder.

     21.	Holdover.

       		Tenant agrees to pay to landlord twice the total of all 
rent then applicable for each month or portion thereof Tenant 
shall retain possession of the Premises or any part thereof after 
the termination of this Lease (unless and to the extent such 
holding over shall be pursuant to a written agreement between 
Landlord and Tenant), whether by lapse of time or otherwise, and 
also to pay all damages sustained by landlord on account thereof; 
the provisions of this subsection shall not operate as a waiver 
by Landlord of any right of re-entry provided in this Lease or 
under law.  Tenant shall also pay all reasonable legal fees and 
damages incurred by Landlord as a result of such holdover.	

     22.	Limitation of Liability.
		
		       Tenant shall neither assert nor seek to enforce any claim 
for breach of this Lease against any of Landlord's assets other 
than Landlord's interest in the Premises, and Tenant agrees to 
look solely to such interest for the satisfaction of any 
liability of Landlord under this Lease, it being specifically 
agreed that in no event shall landlord (which term shall include, 
without limitation, any of the officers, employees, agents, 
attorneys, trustees, directors, partners, beneficiaries, joint 
venturers, members, stockholders or other principals or 
representatives, disclosed or undisclosed, thereof) ever be 
personally liable for any such liability.

     23.	No Recording of Lease.
	
	       	Tenant hereby acknowledges and agrees that it shall not 
record this Lease or any notice or memorandum of this Lease in 
any land evidence records or any other public record without the 
express prior written consent of Landlord.  In the event of any 
such recording, Tenant shall be in default of this Agreement and 
Landlord shall have all rights and remedies available under law 
or in equity as a result of such recordation including, without 
limitation, the right to terminate this Lease.

     24.	Assignment and Subletting.

       		Tenant will not assign this Lease, in whole or in part, 
nor sublet all or any part of the Premises, nor license, nor 
pledge or encumber by mortgage or other instruments its interest 
in this Lease without landlord's prior written consent, which 
consent may be withheld by landlord in its sole and absolute 
discretion.  This prohibition includes any subletting or 
assignment which would otherwise occur by operation of law, 
merger, consolidation, reorganization, transfer or other change 
of Tenant's corporate or trustee in any federal or state 
bankruptcy, insolvency, or other proceedings.  Consent by 
landlord to any assignment or subletting shall not constitute a 
waiver of the foregoing prohibition with respect to any 
subsequent assignment or subletting.

     25.	Use of Hazardous Material.
	
	       	Tenant shall not cause or permit any Hazardous Material to 
be brought upon, kept or used in or about the Premises by Tenant, 
its agents, employees, contractors or invitees without the prior 
written consent of Landlord.  If Tenant breaches the obligations 
stated in the preceding sentence, or if contamination of the 
Premises by Hazardous Material otherwise occurs, Tenant shall 
indemnify, protect, defend and hold Landlord harmless from any 
and all claims, judgments, damages, penalties, fines, costs, 
liabilities or losses (including, without limitation, diminution 
in value of the Premises, damages for the loss or restriction on 
use of rentable Premises or usable space or of any amenity of the 
Premises, damages arising from any adverse impact on marketing of 
Premises space, and sums paid in settlement of claims, attorneys' 
fees, consultant fees and expert fees) which arise during or 
after the Term as a result of such contamination.  This 
indemnification of Landlord by Tenant includes, without 
limitation, costs incurred in connection with any investigation 
of site conditions or any clean-up, remedial, removal or 
restoration work required by any federal, state or local 
government agency or political subdivision because of Hazardous 
Material present in the sole, surface water or groundwater on, 
near or under the Premises.
	
	     	As used herein, the term "Hazardous Material" means any 
hazardous or toxic substance, material or waste, including, but 
not limited to, those substances, materials, and wastes listed in 
the United States Department of Transportation Hazardous 
materials Table (49 CFR 172.101) or by the Environmental 
Protection Agency as hazardous substances (40CFR part 302) and 
amendments thereto, or such substances, materials and wastes that 
are or become regulated under any applicable local, state or 
federal law.
	
	     	Landlord and its agents shall have the right, but not the 
duty, to inspect the Premises at any time to determine whether 
Tenant is complying with the terms of this Lease.

    	26.	Construction.
	
	       	The mention of the parties hereto by name or otherwise 
shall be construed as including and referring to their respective 
successors and assigns as well as to the parties themselves 
whenever such construction is required or admitted by the 
provisions hereof; and all covenants, agreements, conditions, 
rights, powers and privileges hereinbefore contained shall inure 
to the benefit of and be binding upon the successors and assigns 
of such parties, unless otherwise provided.

    	27.	Permits.

       		Tenant, at its cost, shall obtain any necessary permits 
for the Premises from the City of Providence.

     28.	Parking Facility Operation and Maintenance Agreement.
	
	       	This lease is made subject to the terms and conditions set 
forth in the Parking Facility Operation and Maintenance 
Agreement, which agreement is attached hereto as Exhibit B.

    	29.	Notices.

       		Whenever notice shall be given under this Lease, the same 
shall be in writing and shall be sent by certified or registered 
mail, return receipt requested as follows:

<TABLE>
     <C>                          <S>
  			To the Landlord:            	100 Dexter Road
                           							East Providence, Rhode Island  02914

  			To the Tenant:              	c/o Charles Meyers
                           							56 Pine Street
                           							Providence, Rhode Island  02903

  			To the Tenant's	            	Charles Koutsogiane
  			  Attorney:	               		One Grove Avenue
                           							East Providence, Rhode Island  02914
</TABLE>
or to such other address or addresses as each party may from time 
to time designate by like notice to the other.  Said notice shall 
be valid and times begin to run hereunder upon receipt of the 
party to which said notice is given.

   		IN WITNESS WHEREOF, the parties hereto have caused these 
presents to be executed in duplicate as of the day and year first 
above written.

CAPITAL PROPERTIES, INC.	               METROPARK, LTD.

By/s/Ronald P. Chrzanowski            		By/s/Charles Meyers, 
Ronald P. Chrzanowski	                  Charles Meyers, President 
President


STATE OF RHODE ISLAND
COUNTY OF PROVIDENCE

    	In Providence, in said County on the 10th day of  December, 
1998, before me personally appeared Ronald P. Chrzanowski, 
President of Capital Properties, Inc., to me known and known by 
me to be the person executing the foregoing instrument on behalf 
of said corporation, and he acknowledged said instrument by him 
executed to be his free act and deed and the free act and deed of 
said corporation.

                                 							/s/Gloria P. Hopkins		
                                  						Notary Public
                                 							Gloria P. Hopkins
                                 							My Commission Expires June 23, 2001



STATE OF RHODE ISLAND
COUNTY OF PROVIDENCE

    	In Providence, in said County on the 9th day of  December, 
1998, before me personally appeared Charles Meyers, President of 
Metropark, Ltd., to me known and known by me to be the person 
executing the foregoing instrument on behalf of said corporation, 
and he acknowledged said instrument by him executed to be his 
free act and deed and the free act and deed of said corporation.

                                 							/s/Carolyn M. Bouchard		
                                 							Notary Public


                               GUARANTEE


    	In consideration of the execution of the foregoing lease by the 
Landlord, the undersigned (jointly and severally, if more than 
one) guarantees that the Tenant will pay all rent thereunder and 
will perform all other terms, conditions or agreements on its 
part to be performed or fulfilled, and agrees that the foregoing 
lease may be amended from time to time by the parties thereto 
without notice to the undersigned.  The undersigned consents that 
extensions of time of payment or any other indulgences may be 
granted to the Tenant without notice to and without releasing or 
affecting in any way the liability of the undersigned and the 
undersigned waives demand and notice of default.  This guarantee 
is in addition to any other security which the Landlord may have 
for the performance of the Tenant's obligations and the Landlord 
may have the recourse to this guarantee without first pursuing 
the Landlord's remedies against such other security, if any.  The 
Landlord may release, in whole or in part, any other security 
without releasing or affecting in any way the liability of the 
undersigned.  In addition, the undersigned will pay to the 
Landlord all costs and expenses (including attorneys' fees) 
incurred in connection with the enforcement of this guarantee.

Executed this 9th day of  December, 1998.


                          											/s/Charles Meyers		
                          											Charles Meyers


<PAGE>

                        CAPITAL PROPERTIES, INC.


                     ANNUAL REPORT TO SHAREHOLDERS


                                 1998






                                 III-7

<PAGE>



BRIEF DESCRIPTION OF 
THE COMPANY'S BUSINESS


The Company's business consists of the leasing of certain of its real estate 
interests in downtown Providence, Rhode Island. Through its wholly-owned 
subsidiary, Tri-State Displays, Inc., the Company leases locations along 
interstate and primary highways in Rhode Island and Massachusetts for outdoor 
advertising purposes.  Through its wholly-owned subsidiary, Capital Terminal 
Company, the Company operates its petroleum storage facilities in East 
Providence, Rhode Island.

<PAGE>

PRESIDENT'S REPORT

In the accompanying financial statements, the Company is reporting a net loss
of $201,000 for the calendar year 1998.

The Company's common stock is listed on the American Stock Exchange under the
symbol "CPI".  During 1998, the Company paid a dividend of $.10 per share on 
the Company's outstanding stock.

In 1988, the Company transferred the ownership of Providence and Worcester 
Railroad Company (Railroad) to the Company's shareholders.  The Company 
received a promissory note in the amount of $9,377,000 payable over a period 
of twenty years with interest at 12% per year (reduced to 10% in 1995), 
prepayable at any time without penalty.  On March 30, 1998, Railroad prepaid 
the note.

In March 1998, the Company relocated its offices to a building on the site of
its petroleum storage facilities in East Providence, Rhode Island.


DOWNTOWN PROVIDENCE REAL ESTATE

The Company owns approximately 20.5 acres of land within the Capital Center 
Project area (Capital Center) in downtown Providence, Rhode Island, including
1.9 acres of air rights over Amtrak's Northeast Corridor (Boston to New York 
City) railroad right of way.  These properties, shown on the plan which appears 
on page 7 of this Report, are Parcels 2, 3S, 3W, 3E, 4W, 4E, 5, 6, 7A, 8 and 
9.  The Company also owns a 15,000 square foot parcel (Parcel 22) and a 3,000
square foot parcel (Parcel 21) which are located outside of, but immediately 
adjacent to, Capital Center.

The Company has entered into long-term land leases on several of its parcels 
with private developers and has entered into letters of intent on other 
parcels.

Parcel 2--Gateway Two Limited Partnership, an affiliate of Congress Group 
Ventures, Inc. (Congress Group) of Cambridge, Massachusetts, has entered into
a long-term lease (95 years) with the Company for the northerly portion of 
the parcel for the construction of a Hilton hotel containing approximately 265 
suites in conjunction with Corporex Companies, Inc., of Cincinnati, Ohio.  
Plans for the hotel have been approved by the Capital Center Commission.  The
term of the lease will not begin until the commencement of construction.

Parcel 3S--CFG Associates, L. P. (CFG) completed the construction of a 
13-story office building containing approximately 235,000 square feet in 
1990.  The general partner in CFG is a subsidiary of Citizens Financial 
Group, Inc. whose commercial banking affiliate is the building's principal 
tenant and the building serves as its corporate headquarters.  Citizens 
Financial Group, Inc. is, in turn, an affiliate of Royal Bank of Scotland.  
The lease terminates in 2087.

Parcel 4E--One Park Row East Corporation (One Park Row), an affiliate of 
First Quebec Corporation of Montreal, Canada, entered into a non-binding 
letter of intent with the Company in 1989 for the proposed construction of a 
6-story office building containing approximately 95,000 square feet.  The 
plans for this development have been approved by the Capital Center 
Commission, and all permits necessary to commence construction have been 
obtained.  Construction will not commence until such time as One Park Row has
identified tenants to occupy a significant portion of the building.  One Park
Row has been working with a local developer to identify such tenants, at 
which time the letter of intent will be supplanted by a formal land lease.

<PAGE>

Parcel 4W--Homestead Village Incorporated (Homestead), a publicly-held 
corporation listed on the American Stock Exchange, entered into a letter of 
intent with the Company in March 1999 for the proposed construction of an 
extended-stay hotel containing approximately 140 units.  It is anticipated 
that Homestead and the Company will enter into a lease for a term of 50 years.

Parcel 5--Parcel Five Limited Partnership completed the construction of an 
8-story apartment building in 1991 containing approximately 454,000 square 
feet with 225 units.  In May 1997, the apartment building was purchased and 
the lease assigned to AvalonBay Communities Inc. (AvalonBay), a real estate 
investment trust listed on the New York Stock Exchange.  The lease terminates
in 2142.

Parcel 6--AvalonBay has entered into a long-term lease (145 years) with the 
Company for the proposed construction of an apartment complex containing 
approximately 250 individual units with underground parking.  AvalonBay will 
submit plans of this project for approval to the Capital Center Commission 
and seeks to enter into a tax stabilization agreement with the City of 
Providence.  The term of the lease will not begin until the commencement of 
construction.  The lease permits the Company to remove the western portion of
Parcel 6 from under the lease without any reduction in rentals.  The Company 
has been working with The Koffler Group (Koffler), a local developer, on the 
proposed construction of a 1,200 car public parking garage on the western 
portion.

Parcel 7A--The Company owns a below-grade parking garage containing 360 
public parking spaces which is leased under a short-term arrangement.  The 
garage is adjacent to the Amtrak rail passenger station.

Parcel 8--Gateway Eight Limited Partnership (Gateway Eight) completed the 
construction of a 4-story office building containing approximately 114,000 
square feet in 1990.  Gateway Eight is an affiliate of Congress Group.  The 
lease terminates in 2090.  The building is currently  subleased by Dreyfus 
Corporation, which sublease expires December 31, 1999.  It has been publicly 
announced that Gateway Eight is entering into a ten-year lease with Boston 
Financial Data Services, Inc., which will commence January 1, 2000.  

Parcel 9--FC Acquisitions Associates, L.L.C. (FC), an affiliate of Forest 
City Ratner Companies of Brooklyn, New York, has entered into a long-term 
lease (149 years) with the Company for the construction of a building 
containing approximately 350,000 square feet of commercial space and a 
minimum of 200 public parking spaces.  The lease provides a period of time 
within which FC may perform its due diligence, seek the approval of the plans 
for the project from the Capital Center Commission and enter into a tax 
stabilization agreement with the City of Providence.  The term of this lease 
will not commence until construction begins.

Providence Place Mall, a regional shopping mall containing 1.2 million square
feet of retail space and a 4,000 car garage, is under construction on a 13.2 
acre site to the west of the Company's Parcel 9 in Capital Center (marked 
"PPM" on the plan).  It is anticipated that the Mall will open in August 
1999.  The Mall's anchor stores include Nordstrom, Filene's and Lord & 
Taylor.

The parking garage on Parcel 7A and Parcels 3E, 3W, 4E, 4W, 6, 21 and 22 have
been leased to a firm experienced in parking operations.  These leases can be
terminated on short notice as suitable development opportunities arise.

<PAGE>

LITIGATION WITH THE CITY, STATE AND AMTRAK

Development of Parcels 2, 4E, 4W, 6 (for both the apartment complex and the 
public parking garage) and 9, as well as the proposed sublease on Parcel 8, 
are dependent upon resolution of the property tax dispute between the Company
and the City of Providence.  

In 1997 the City revalued the Company's properties within Capital Center 
(with the exception of Parcels 7A and 8 which were then under agreements with
the City) and reached back six years to assess over $13,000,000 in back 
taxes, interest and penalties on the properties; through January 1999, this 
amount has increased to $16,918,000.  The Company contends that this action 
by the City is both unprecedented and illegal.  The Company contends that 
under Rhode Island law, tax assessments can only be changed as part of an 
overall City-wide reevaluation, the last of which occurred in 1987.  
Additionally, the Company contends that back taxes can only be assessed 
pursuant to a statute which does not apply in this situation.

The Company is also in dispute with the City over ownership of Parcel 9.  
Pursuant to the terms of an agreement dated January 16, 1987 between the City
and the State of Rhode Island (City/State Agreement), the City was obligated 
to convey Parcel 9 to the State and to pay 50% of the costs for land 
acquisition for the then proposed River Relocation.  Under a separate January
16, 1987 agreement between the Company and the State (CPI/State Agreement), 
the State was obligated to convey Parcel 9 to the Company.  In 1989 the City 
conveyed Parcel 9 to the State and the State reconveyed Parcel 9 to the 
Company; contemporaneously, the Company purchased a title insurance policy 
covering Parcel 9.  The City now claims that its execution of the City/State 
Agreement was invalid, the conveyance of Parcel 9 to the State was void, and 
hence the City is the true owner of Parcel 9.  Moreover, in December 1998, 
the City adopted an ordinance authorizing the Providence Redevelopment Agency
to condemn Parcel 9 as an "arrested," "blighted," and "substandard" parcel of
land.  The Company is contesting both the City's claim of ownership and 
the City's attempt to condemn Parcel 9.

The Company's dispute with the State concerns the 1987 condemnation of a 
portion of the Company's property by the State for River Relocation pursuant 
to the terms of the CPI/State Agreement.  The State originally paid the 
Company $2,600,000 in condemnation proceeds and in 1997 the Rhode Island 
Superior Court awarded to the Company an additional $6,101,000 in condemnation 
proceeds as well as interest on the judgment through May 6, 1997 in the 
amount of $4,552,000.  This judgment was affirmed by the Rhode Island Supreme
Court in April 1998.  The Company has yet to receive any money under this 
judgment. As discussed previously, pursuant to the terms of the City/State 
Agreement, the City and the State were to share equally in the cost of 
condemnation.  Pursuant to the terms of the CPI/State Agreement, the Company 
was obligated to reimburse the State for the State's share of the cost of 
condemnation in return for the conveyance to the Company of Parcel 9.  
Notwithstanding that the State had sole authority to condemn for River 
Relocation, that under the CPI/State Agreement the State was the condemning 
authority, and that the Company was not a party to the City/State Agreement 
or any other pertinent agreement with the City, the State now contends that 
the Company must proceed solely against the City to recover the judgment.  
The State also contends that the payment the Company made at the time of 
conveyance of Parcel 9 relieved the State of any further obligation under the
CPI/State Agreement to the Company for the condemnation.  Finally, the State 
contends that the Company waived its contract claims against the State.  The 
Company contends that the State breached the CPI/State Agreement by refusing 
to pay the judgment, by unilaterally reducing the interest rate payable under
the condemnation between the time the CPI/State Agreement was executed and 
the final judgment, by not conveying Parcel 9 to the Company in a timely 
fashion, and finally, if the City is correct as to the ownership of Parcel 9, 
the State has not fulfilled its portion of the CPI/State Agreement.  The 
Company also contends that the CPI/State 

<PAGE>

Agreement, at most, requires the Company to repay to the State one-half of 
the condemnation award, but not the interest.

In December 1998, the Rhode Island Supreme Court directed that the various 
disputes between the Company, City and State be consolidated before a single 
justice of the Superior Court, and final briefs under various Cross Motions 
for Summary Judgment are scheduled to be filed by March 23, 1999.  The 
Company expects a decision in these matters to be issued shortly thereafter.  
Any decision is subject to appeal to the Rhode Island Supreme Court.

The Company is also in dispute with Amtrak.  As part of the Capital Center 
Project, the parties (the Company, State, City and Amtrak) each conveyed 
parcels of land in Capital Center so that each party had the land it needed 
for its designated functions within Capital Center.  As part of this 
arrangement, the Company was conveyed approximately 1.9 acres of air rights 
over Amtrak's Northeast Corridor 19.3 feet above the top of rail within what 
is now designated as Parcel 6.  The Company was also conveyed Parcel 7A for 
the construction of an underground parking garage. The parking garage and the
railroad station were both constructed by the Federal Railroad 
Administration.  Many of the facilities needed to service the railroad 
station were built within the confines of Parcel 7A. Over the years, the 
Company did not charge Amtrak for this intrusion on its properties, and over 
the years Amtrak assumed the cost of electricity provided to the underground 
parking garage.  In 1997, Amtrak unilaterally refused to pay for the 
electricity and the Company brought suit in the Federal District Court 
seeking an Order requiring Amtrak to remove its facilities from Parcel 7A.

As previously mentioned, the Company has the right to remove the western 
portion of Parcel 6 from under the lease without any reduction in rent.  The 
western portion consists of land located east of the air rights, the air 
rights, and land located west of the air rights which the Company purchased 
from the State in 1990.  The Company is cooperating with Koffler to construct
an approximate 1,200 car parking garage to be located on the western portion 
of Parcel 6, including the air rights.  Recently, Amtrak erected towers 
within these air rights, the tops of which vary in height between 27 and 31 
feet above top of rail.  Additionally, Amtrak has notified the Company  that 
it will be erecting a signal bridge within the air rights, all as part of the 
electrification of the Northeast Corridor.  The Company is reviewing its 
options as to Amtrak's present and proposed intrusions upon the Company's 
properties.


CAPITAL TERMINAL COMPANY

Capital Terminal Company, a wholly-owned subsidiary, operates the Company's 
petroleum storage facilities.  In June 1998, the Company entered into a 
short-term agreement for the warehousing of product in three of its tanks 
with Global Companies L.L.C. (Global) of Waltham, Massachusetts, 51% of which
is owned by Yacimientos Petroliferos Fiscales SA (YPF), Argentina's largest 
company.  Fifteen percent of YPF was recently acquired by Repsol SA, a 
Spanish oil company. In mid-September the Company and Global entered into a 
new agreement under which the Company operates the entire terminal facility 
for Global.  The Company and Global are negotiating to extend the current 
arrangement for an additional three years plus options to extend on an annual 
basis.

In 1998, the tanks and associated piping were painted.  During 1999, the 
Company will erect a new expanded truck rack which will be fully automated 
and will have both top and bottom loading capabilities; the Company has 
received approval from the East Providence Zoning Board of Appeals for this 
expansion.

<PAGE>

TRI-STATE DISPLAYS, INC.

Tri-State Displays, Inc., another wholly-owned subsidiary, owns or controls 
various locations along interstate and primary highways in Rhode Island and 
Massachusetts which are leased for commercial advertising purposes to 
Chancellor Media Whiteco Outdoor Corporation (CMWO), a division of Chancellor
Media of Dallas, Texas. These locations contain a total of 45 billboard 
faces, all of which are the large painted bulletins normally seen along 
interstate and primary highways.  During 1998, CMWO erected two new billboard
structures with two faces each; these were the first billboards constructed 
in conjunction with the Company since 1989.  In addition, one billboard face 
was converted to a Tri-Vision board.

The Company and CMWO also identified five new billboard locations (ten faces)
in Worcester, Massachusetts adjacent to the proposed relocated Route 146.  
The Company has received approvals from the City's Zoning Board, Planning 
Board and Conservation Board.  Permit applications for these five locations 
have been submitted to the Commonwealth of Massachusetts Outdoor Advertising 
Board for approval.

                                							Sincerely,

                                       /s/ Ronald P. Chrzanowski               
                                							Ronald P. Chrzanowski
                                							President

March 18, 1999

<PAGE>

CAPITAL PROPERTIES, INC. AND SUBSIDIARIES

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS


Financial condition:

In 1988, in accordance with a plan of distribution, the Company transferred 
the ownership of Providence  and  Worcester  Railroad Company (Railroad) to 
the Company's shareholders.  The Company and Railroad have a common 
controlling shareholder.  As part of the plan, the Company received a 
promissory note in the amount of $9,377,000 payable over a period of twenty 
years with interest at 12% per year, (reduced to 10% in 1995) prepayable at 
any time without penalty.  In March 1998, Railroad prepaid the note in full.

The Company's principal assets consist of land, a public parking garage, 
petroleum storage facilities (the Facilities) and outdoor advertising sites. 
A significant portion of the land consists of approximately 20.5 acres, 
including 1.9 acres of air rights, in downtown Providence, Rhode Island, held
for development.  At December 31, 1998, the Company is earning revenue from
long-term land leases for three separate land parcels.  One lease was amended
in May 1997, extending the term thereof from 2092 to 2142, with no change in 
the rents due under the original term of the lease, and rents for the 
extended period to be calculated in accordance with the formulas set forth 
for the original term.  The tenants of each parcel have constructed buildings 
which are substantially occupied.

As of December 31, 1998, the Company had entered into land leases for three 
additional land parcels with terms of 95, 145 and 149 years.  Under the 95- 
year land lease, the developer proposes to construct a hotel containing 
approximately 265 suites with parking.  Under the 145-year land lease, the 
developer proposes to construct an apartment complex containing approximately
250 individual units with underground parking.  Under the 149-year land 
lease, the developer proposes to construct a building of approximately 
350,000 square feet of commercial space and a minimum of 200 public parking 
spaces.  All leases provide a period of time within which the developer may 
perform its due diligence, seek the approval of the plans for its complex 
from the Capital Center Commission and enter into a tax stabilization 
agreement with the City of Providence.  There can be no assurance that the 
developers, individually or collectively, will be able to satisfy the 
conditions precedent to proceeding with the developments.  Each developer's 
ability to obtain a tax stabilization agreement with the City of Providence 
may be adversely affected by the pending litigation between the City and 
the Company with respect to prior year taxes as discussed below.  The Company
is unable to determine at this time when construction will begin and 
therefore the time at which the term of each lease will commence.
The Company is engaged in discussions concerning the possible development of 
the remaining  parcels but is unable to predict when leases on these parcels 
will commence.  However, the Company will continue to lease all available 
parcels which are suitable for public surface parking under short-term 
cancelable leases.  The Company anticipates that future development of the 
remaining properties will consist primarily of long-term ground leases under 
which the significant portion of future rental income will not be earned 
until the buildings are completed by the developers and occupied.

The Company leases to one tenant locations along interstate and primary 
highways in Massachusetts and Rhode Island for outdoor advertising purposes. 
At December 31, 1998, these 

<PAGE>

locations contained a total of 45 billboard faces.  The lease currently 
expires in 2025; however, the term of the lease is extended two years for 
each additional location added.  

Certain of the Company's long-term land leases provide for scheduled rent 
increases over their terms which extend to the year 2142.  In accordance with
the provisions of Statement of Financial Accounting Standards (FAS) No. 13 
(Accounting for Leases) and certain of its interpretations, the Company 
recognizes the rental income on the straight-line basis over the term of each
lease; however, the Company does not report as income that portion of such 
straight-line rentals which management is unable to conclude is realizable 
(collectible) due to the length of the lease terms and other related 
uncertainties.  At December 31, 1998, the cumulative amount not reported as 
income is $11,152,000.

Effective September 1, 1998, the Company entered into a short-term 
arrangement with a petroleum company (Petroleum Company) under which the 
Company operates the entire Facilities for the Petroleum Company.  The 
Company currently receives a monthly fee of approximately $78,000 and is 
responsible for labor, insurance, property taxes and other operating 
expenses.  The Company and Petroleum Company are negotiating to extend the 
current arrangement for an additional three-year term plus options to extend 
on an annual basis with a minimum monthly fee of $67,000, increasing 4.5% 
annually during the extended term.

The Company manages its exposure to contamination, cleanup or similar costs 
associated with the Facilities through its adherence to established 
procedures for operations and equipment maintenance.  In addition, 
the Company maintains what it believes to be adequate levels of insurance.  

During 1999, the Company plans to construct a new expanded truck rack at the 
Facilities which will be fully automated and will have both top and bottom 
loading capabilities at an estimated cost of $1.5 million.  The Company 
anticipates paying for the construction from available cash.

In management's opinion, the Company will continue to be able to generate 
adequate amounts of cash to meet substantially all of its expenditures.

On January 16, 1987, the Company entered into an Agreement with the State of 
Rhode Island (CPI/State Agreement) relating to the State of Rhode Island's 
obligation with respect to the condemnation of a portion of the Company's 
property in connection with the proposed River Relocation in Providence, 
Rhode Island.  In November 1987, the State of Rhode Island (the State) 
condemned the property and paid the Company a condemnation award of 
$2,600,000.  Under the CPI/State Agreement, the Company purchased another 
parcel of land (Disputed Parcel) from the State and was required to return to
the State a portion of the condemnation award.

In April 1988, the Company filed a petition in the Rhode Island Superior 
Court (Superior Court) for an increased condemnation award alleging that the 
award paid in 1987 was inadequate.  In January 1992, the Superior Court 
awarded the Company an additional condemnation award of $401,000 plus 
interest from the date of the condemnation.  The Company had asserted in the 
Superior Court that it was entitled to an additional condemnation award in 
excess of $6,000,000 plus interest, and accordingly, in February 1992, the 
Company appealed the decision of the Superior Court to the Rhode Island 
Supreme Court (Supreme Court).  In January 1994, the Supreme Court overturned
the Superior Court decision and returned the matter to the Superior Court for a 
retrial of the case.  The case was retried in 1995.

<PAGE>

In May 1997, the Superior Court entered final judgment awarding condemnation 
proceeds of $6,101,000 in favor of the Company and interest on the judgment 
through that date of $4,552,000.  The State filed an appeal with the Supreme 
Court.  On April 17, 1998, the Supreme Court entered an order affirming the 
judgment of the Superior Court.  Interest continues to accrue on the judgment.  
The Supreme Court expressly stated that its decision was "without prejudice 
to any party seeking to enforce any contractual obligations that may be 
implicated by the enforcement of the Judgment."

The State filed several motions to prevent the Company from collecting the 
judgment, which now exceeds $11,500,000 including interest.  The Superior 
Court denied the State's motions and ordered the State to pay the judgment by
August 14, 1998.  The State filed an appeal with the Rhode Island Supreme 
Court.  In December 1998, the Supreme Court directed that this case, 
together with other disputes between the Company, the State and the City of 
Providence, be consolidated before a single justice of the Superior Court.  
This is more fully discussed below.

Under the CPI/State Agreement, the Company may be required to return to the 
State a portion of the award.  

During 1995, the Company received notice from the City of Providence (the 
City) of an increase in the assessed values of several of its parcels within 
Capital Center.  The increase in the assessed values was not the result of a 
city-wide revaluation, pertained to 1995 and subsequent years, and resulted 
in an annual increase in property taxes of $265,000.  The Company filed 
appeals for 1995 and 1996 but elected to make property tax payments as due 
pending the outcome of the appeals.  During the fourth quarter of 1996, the 
City reduced the assessed value of one of the parcels, resulting in an 
abatement of property taxes of $107,000 for 1995 and a reduction in the tax 
of $115,000 for 1996 and subsequent years.  The Company is unable to 
determine if the remaining appeals will result in an abatement of the property 
taxes for 1995 and subsequent years.

On August 18, 1997, the Company received from the City real property tax 
bills for taxes assessed as of December 31, 1996 reflecting an unexpected 
200% increase in the assessed values of a majority of the Company's parcels 
within Capital Center, resulting in an annual increase in property tax 
expense of approximately $1,370,000.  This increase was not part of a city-
wide revaluation.

On August 21, 1997, the Company received from the City real property tax 
bills purporting to assess taxes for assessment years ending December 31, 
1990 through December 31, 1995, based upon a $42,000,000 retroactive increase
in the assessed values of these same properties.  These increases were not 
part of a city-wide revaluation.  The aggregate amount of such taxes as billed 
was approximately $7,100,000, which amount did not include any interest.  The
Company believes that the change in the assessed values is related to the 
March 1997 Superior Court decision that determined a 1987 value for certain 
properties condemned by the State in 1987.

The Company believes that the increase in the assessed values for 1997 and 
prior periods are illegal and on August 27, 1997 filed a lawsuit against the 
City in the Superior Court.

On October 14, 1997, the Company received from the City real property tax 
bills for the second quarter of 1997 indicating interest due on the 1996 
assessment of $76,000 and interest due on the purported assessed taxes for 
the years 1990 through 1995 of $3,300,000.  The City asserts that the 
parcels subject to the retroactive assessment were under-assessed in the 
prior assessment periods.

<PAGE>

On November 14, 1997, the Company filed appeals of the 1997 real property tax
bills.

On August 5, 1998, the Company received from the City real property tax bills
for taxes assessed as of December 31, 1997, which taxes are based upon the 
assessed valuations as of December 31, 1996.  The Company has appealed these 
assessments and on October 16, 1998, filed a lawsuit against the City in the 
Superior Court claiming that the increased assessments for 1998 are illegal. 
In December 1998, the Supreme Court directed that the property tax disputes 
with the City, title to the Disputed Parcel, and the condemnation case 
previously discussed be heard by a single justice of the Superior Court.

The real property tax bills received by the Company in January 1999 from the 
City indicate that there remains unpaid taxes of $11,645,000 and interest 
thereon of $5,273,000 for assessment dates of December 31, 1990 through 1997.
Interest continues to accrue at the rate of 1 percent per month.

The Company, upon consultation with counsel, believes that its position with 
respect to these assessments will be sustained; however, such proceedings can
be protracted and costly, and there can be no assurance that the Company will
be successful in having the 1997 and 1998 increases or the retroactive 
assessments overturned.  The failure of the Company to prevail in the 
proceedings contesting the retroactive increase in assessed values would have
a material adverse effect on the Company's results of operations and 
financial condition and, while the Company believes, upon consultation with 
counsel, that the likelihood of such failure is remote, if a court were to 
require the Company to pay the retroactive assessments and related interest, 
the Company could be forced to seek the protection of the bankruptcy courts.

Pursuant to the terms of an agreement dated January 1987 between the City and
the State  (City/State Agreement), the City was obligated to convey the 
Disputed Parcel to the State.  As discussed above, pursuant to the CPI/State 
Agreement, the State was obligated to reconvey the Disputed Parcel to the 
Company.  In 1989, the City conveyed the Disputed Parcel to the State, and the 
State reconveyed the Disputed Parcel to the Company.  Contemporaneously, the 
Company purchased a title insurance policy in the amount of $1,600,000 
covering the Disputed Parcel. 

The City now claims that its execution of the City/State Agreement was
invalid, that its conveyance of the Disputed Parcel to the State was void, 
and hence the City is the true owner of the Disputed Parcel.  Moreover, in 
December 1998, the City adopted an ordinance authorizing the Providence 
Redevelopment Agency to condemn the Disputed Parcel.  The Company is 
contesting both the City's claim of ownership and the City's attempt to 
condemn the Disputed Parcel.

The Company, upon consultation with counsel, believes that its ownership of 
the Disputed Parcel will be affirmed and that the City will fail in any 
attempt to condemn this parcel.

This dispute with the City is included in the matters being heard by the 
single justice in the  Superior Court as directed by the Supreme Court.

The Company's carrying value of the Disputed Parcel is $57,000.  The Disputed
Parcel's assessed value was increased to $7,909,000 by the City as more fully
discussed above.   The real property tax bill relating to the Disputed Parcel
received in January 1999 from the City indicates that the  unpaid taxes and 
interest total approximately $2,315,000 through that date.

<PAGE>

In the consolidated case of all of the various disputes between the Company, 
City and State before a single justice of the Superior Court, final briefs 
under various Cross Motions for Summary Judgment are scheduled to be filed by
March 23, 1999.  The Company expects a decision in these matters to be issued 
shortly thereafter.  Any decision is subject to appeal to the Supreme Court.

In both 1997 and 1998, the Company paid dividends of $.10 per share on the 
Company's outstanding common stock.  The Company expects to be in a position 
to continue dividend payments on a semi-annual basis; however, the 
declaration of any dividend and the amount thereof will depend on the 
Company's future earnings, financial condition and other relevant factors.

In prior years, the Company had been classified as a personal holding company
(PHC) for federal income tax purposes.  A PHC is subject to an additional tax
of 39.6% on amounts classified as undistributed PHC income. This 
classification did not affect the Company's federal income tax liability 
because the Company made sufficient dividend distributions to shareholders.  
The Company is no longer classified as a PHC due principally to the present 
sources of the Company's revenue and does not expect to be classified as a 
PHC in future years.

Future cash outlays for income taxes will be a more significant portion of 
total tax expense and presently exceeds total tax expense for financial 
reporting purposes.  This results principally from the recognition of rental 
income on a contractual basis for tax reporting purposes and additional 
depreciation claimed for financial reporting purposes.

The Company has determined that the "Year 2000" issue will not materially 
affect its business, financial condition or results of operations.  The 
Company employs nine people.  Substantially all of the leasing revenue is in 
the form of fixed monthly payments, and the operation of the Facilities is 
not dependent upon date-sensitive equipment.  Should the Company experience a
problem, it is entirely feasible to maintain its systems in a non-computer 
environment and continue to operate the Facilities.

Certain portions of this Annual Report to Shareholders, and particularly the 
Management's Discussion and Analysis of Financial Condition and Results of 
Operations and the Notes to Consolidated Financial Statements, contain 
forward-looking statements which represent the Company's expectations or 
beliefs concerning future events.  The Company cautions that these statements
are further qualified by important factors that could cause actual results to
differ materially from those in the forward-looking statements, including, 
without limitation, the following:  the ability of the Company to generate 
adequate amounts of cash; the collectibility of the accrued rental income 
when due over the terms of the long-term land leases; changes in economic 
conditions that may affect either the current or future development on the 
Company's parcels; the final outcome of the condemnation and property tax 
litigation and the dispute over the ownership of a parcel in the Capital 
Center Project area; the extension of the current arrangement for the 
Facilities; and exposure to contamination, cleanup or similar costs associated 
with the operation of the Facilities.

Results of operations:

The Company's total income for 1998 increased 2% from the 1997 level.

The Company has adopted the provisions of FAS No. 131 (Disclosures about 
Segments of an Enterprise and Related Information) and has reported its 
revenues and expenses applicable to two operating segments--Leasing and 
Petroleum Storage Facilities.  

<PAGE>

Leasing revenue and expenses applicable to leasing decreased principally due 
to the fact that in 1998 revenues from the operation of the public parking 
garage were in the form of rental payments as opposed to customer receipts, 
and the Company no longer incurred the direct payroll and other expenses of 
operating the garage.  The decrease in expenses was offset in part by 
increased legal fees in connection with the condemnation case and the 
property tax dispute with the City of Providence.

The increase in revenue from petroleum storage facilities resulted 
principally from fees received under the Company's agreement with an oil 
company in connection with the Wilkesbarre Pier and income from a short-term 
arrangement to operate the Facilities which commenced September 1, 1998.  The
increase in expenses applicable to petroleum storage facilities resulted 
principally from increased insurance costs and repairs and maintenance 
relating to the exterior painting of the entire terminal facilities.

The decrease in total interest income in 1998 from 1997 results from 
Railroad's prepaying its note in full in March 1998, which note provided for 
a 10% rate.  The Company was not able to invest the proceeds at comparable 
rates.

The General and Administrative expenses for 1998 increased approximately 19% 
from the 1997 level due principally to payroll and related costs as a result 
of an increased number of employees and legal fees in connection with 
corporate planning matters.

<PAGE>

Lefkowitz, Garfinkel, Champi & Derienzo P.C.
Certified Public Accountants/Business Consultants





INDEPENDENT AUDITORS' REPORT






Board of Directors
Capital Properties, Inc.
Providence, Rhode Island

We have audited the accompanying consolidated balance sheet of Capital 
Properties, Inc. and subsidiaries as of December 31, 1998, and the 
related consolidated statements of income (loss) and retained earnings 
and cash flows for the years ended December 31, 1998 and 1997.  These 
financial statements are the responsibility of the Company's management.  
Our responsibility is to express an opinion on these financial statements 
based on our audits.

We conducted our audits in accordance with generally accepted auditing 
standards.  Those standards require that we plan and perform the audit to 
obtain reasonable assurance  about whether the financial statements are free 
of material misstatement.  An audit includes examining, on a test basis, 
evidence supporting the amounts and disclosures in the financial statements.  
An audit also includes assessing the accounting principles used and 
significant estimates made by management, as well as evaluating the overall 
financial statement presentation.  We believe that our audits provide a 
reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, 
in all material respects, the financial position of Capital Properties, Inc. 
and subsidiaries as of December 31, 1998, and the results of their operations
and their cash flows for the years ended December 31, 1998 and 1997, in 
conformity with generally accepted accounting principles.


                            /s/ Lefkowitz, Garfinkel, Champi & DeRienzo P.C.

March 18, 1999




10 Weybosset Street * Providence, Rhode Island 02903 * Tel (401) 421-4800
              1-800-927-LGCD * Fax (401) 421-0643

<PAGE>


CAPITAL PROPERTIES, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET
DECEMBER 31, 1998


ASSETS

<TABLE>

<S>                                                         <C>

Properties and equipment (net of accumulated depreciation)		$	8,461,000
Cash and cash equivalents		                                 	 4,743,000
Receivables:
  Tenant property tax reimbursements	                    	     	214,000
  Income taxes		                                               	175,000
Accrued rental income		                                       	 499,000
Prepaid and other			                                            189,000
                                                           	$14,281,000
        
LIABILITIES AND SHAREHOLDERS' EQUITY

Liabilities:
  Accounts payable and accrued expenses: 
     Property taxes                                       		$  	600,000
     Other		                                                   	125,000
 	Deferred income taxes	                                  	  	1,173,000
                                                    	        	1,898,000

Contingencies (Note 2)

Shareholders' equity: 
  Common stock, $1 par; authorized, issued and
    and outstanding 3,000,000 shares		                       	3,000,000
  Capital in excess of par		                                	 8,828,000
  Retained earnings                                            	555,000
                                               	            	12,383,000
                                                           	$14,281,000

</TABLE>


See notes to consolidated financial statements.

<PAGE>

CAPITAL PROPERTIES, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME (LOSS) AND RETAINED EARNINGS
YEARS ENDED DECEMBER 31, 1998 AND 1997

<TABLE>

<S>                                               <C>           <C>       
                                                     1998 	        1997       
Income:
  Revenues:
		  Leasing                                     		$1,908,000   	$2,081,000
  		Petroleum storage facilities, net of cost 
     of product sold of $240,000 and $586,000 
     in 1998 and	1997, respectively		                620,000        86,000
                                                			2,528,000	   	2,167,000
  Interest:
   	Providence and Worcester Railroad Company		       98,000      	409,000
  		Other		                                          167,000      	 35,000
  Arbitration award			                                           		120,000
                                                			2,793,000    	2,731,000
Expenses:
  Expenses applicable to:
   	Leasing		                                      1,148,000    	1,213,000
  		Petroleum storage facilities		                   948,000  	    533,000
  General and administrative	                  	  	1,033,000    	 	864,000
                                                	 	3,129,000     2,610,000
Income (loss) before income taxes		  	              (336,000)      121,000

Income tax expense (benefit):
  Current		                                          (22,000)     	138,000
  Deferred		                                      	 (113,000)      (74,000)
                                              	    	(135,000)       64,000

Net income (loss)		                                 (201,000)     	 57,000

Retained earnings, beginning		                     1,056,000   	 1,299,000

Dividends on common stock		                        	(300,000) 	  	(300,000)

Retained earnings, ending		                       $	 555,000   	$1,056,000

Basic earnings (loss) per share	                    	$(.07)        	$.02

</TABLE>

See notes to consolidated financial statements.

<PAGE>

CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1998 AND 1997

<TABLE>
			 
<S>                                              <C>             <C>
           	                                         1998      	     1997     

Cash flows from operating activities:
   Net income (loss)                            		$	(201,000)    	$ 	57,000
   Adjustments to reconcile net income (loss) 
    to net cash provided by (used in) 
    operating activities:
     Depreciation	                                 	 347,000      		363,000
     Accrued rental income		                         (47,000)     		(82,000)
     Deferred income taxes		                        (113,000)    		 (74,000)
     Changes in assets and liabilities:
      Increase in:
       Receivables		   	                                          	(205,000)	 
	     	Prepaid and other		    	                                   	(301,000)
       Accounts payable and accrued expenses	        	39,000       		93,000    
	     Decrease in:
	      Receivables                                 		133,000	         
      	Prepaid and other	                           	243,000              	
	     	Income taxes payable			         	                          	(128,000)
  Net cash provided by (used in) operating 
    activities		 	                                   401,000  	   	(277,000)

Cash flows from investing activities:
  Purchase of properties and equipment		            (144,000)		
 	Proceeds from:
    Collection of note receivable, Providence
     and Worcester Railroad Company	              	3,993,000       	219,000
    Maturities of temporary cash investments		                 	  		203,000
  Net cash provided by investing activities		     	3,849,000    	  	422,000

Cash used in financing activities, payment of
  dividends		                                      	(300,000)   	 	(300,000)

Increase (decrease) in cash and cash equivalents	 	3,950,000     	 (155,000)
Cash and cash equivalents, beginning		             	 793,000     	  948,000
Cash and cash equivalents, ending	               	$4,743,000     	$ 793,000


Supplemental disclosures, cash paid for 
 income taxes	                                   	$  107,000	     $ 285,000

</TABLE>

See notes to consolidated financial statements.

<PAGE>

CAPITAL PROPERTIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1998 AND 1997


1. Basis of presentation and summary of significant accounting policies:

Basis of presentation and principles of consolidation:

The accompanying consolidated financial statements include the accounts 
of Capital Properties, Inc. (the Company) and its wholly-owned subsidiaries, 
Tri-State Displays, Inc. and Capital Terminal Company.  All significant 
intercompany accounts and transactions between the Company and its 
subsidiaries have been eliminated in consolidation.

Description of business:

The Company has adopted the provisions of Statement of Financial Accounting 
Standards (FAS) No. 131 (Disclosures about Segments of an Enterprise and 
Related Information) which changes the manner in which the Company determines
its operating business segments. FAS No. 131 defines operating segments as 
components of an enterprise about which separate financial information is 
available that is evaluated regularly by the chief operating decision maker 
in deciding how to allocate resources and in assessing performance.

The provisions of FAS No. 131 result in the Company's reporting two operating
segments:

     *  the leasing of certain of its real estate interests in 
        downtown Providence, Rhode Island, and locations along 
        interstate and primary highways in Rhode Island and 
        Massachusetts for outdoor advertising purposes; and
 
     *  the operation of its petroleum storage facilities (the 
        Facilities) in East Providence, Rhode Island.

Use of estimates:

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions 
that affect the reported amounts of assets and liabilities and disclosure of 
contingent assets and liabilities at the date of the financial statements.  
Estimates also affect the reported amounts of income and expenses during the 
reporting period.  Actual results could differ from those estimates.

Cash and cash equivalents:

The Company considers all highly liquid investments with a maturity of three 
months or less when purchased to be cash equivalents.  Cash equivalents, 
which consist of a certificate of deposit and a short-term uninsured 
repurchase agreement which the Company routinely purchases, totaled 
$4,632,000 at December 31, 1998.

Properties and equipment:

Properties and equipment are stated at cost.  Depreciation is being provided 
by the straight-line method over the estimated useful lives of the 
respective assets.

<PAGE>

The Company follows the provisions of FAS No. 121 (Accounting for the 
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of) 
which requires that property and equipment held and used by the Company be 
reviewed for impairment whenever events or changes in circumstances indicate 
that the net book value of the asset may not be recoverable.  An impairment 
loss will be recognized if the sum of the expected future cash flows 
(undiscounted and before interest) from the use of the asset is less than the 
net book value of the asset.  Generally, the amount of the impairment loss is
measured as the difference between the net book value and the estimated fair 
value of the asset.  

Income taxes:

The Company and its subsidiaries file a consolidated Federal income tax 
return.  

Income taxes are provided based on income reported for financial statement 
purposes.  The provision for income taxes differs from the amounts currently 
payable because of temporary differences in the recognition of certain income 
and expense items for financial reporting and tax reporting purposes.

Leasing revenue:

The Company's properties leased to others are under operating leases.  The 
Company reports leasing revenue when earned under the operating method.

Certain of the Company's long-term land leases provide for scheduled rent 
increases over their remaining terms (30 to 145 years).  In  accordance with 
the provisions of FAS No. 13 (Accounting for Leases) and certain of its 
interpretations, the Company is recognizing leasing revenue on the straight-
line basis over the terms of the leases; however, the Company does not 
report as income that portion of such straight-line rentals which management 
is unable to conclude is realizable (collectible) due to the length of the 
lease terms and other related uncertainties.


2.	Litigation with the State of Rhode Island and the City of Providence:

Condemnation case:

On January 16, 1987, the Company entered into an Agreement with the State of 
Rhode Island (CPI/State Agreement) relating to the State of Rhode Island's 
obligation with respect to the condemnation of a portion of the Company's 
property in connection with the proposed River Relocation in Providence, 
Rhode Island.  In November 1987, the State of Rhode Island (the State) 
condemned the property and paid the Company a condemnation award of 
$2,600,000.  Under the CPI/State Agreement, the Company purchased another 
parcel of land (Disputed Parcel) from the State and was required to return 
to the State a portion of the condemnation award.

In April 1988, the Company filed a petition in the Rhode Island Superior 
Court (Superior Court) for an increased condemnation award alleging that the 
award paid in 1987 was inadequate.   In 

<PAGE>

CAPITAL PROPERTIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1998 AND 1997


2.	Litigation with the State of Rhode Island and the City of Providence 
   (continued):

Condemnation case (continued):

January 1992, the Superior Court awarded the Company an additional 
condemnation award of $401,000 plus interest from the date of the 
condemnation.  The Company had asserted in the Superior Court that it was 
entitled to an additional condemnation award in excess of $6,000,000 plus 
interest, and accordingly, in February 1992, the Company appealed the 
decision of the Superior Court to the Rhode Island Supreme Court (Supreme 
Court).  In January 1994, the Supreme Court overturned the Superior Court 
decision and returned the matter to the Superior Court for a retrial of the 
case.  The case was retried in 1995.

In May 1997, the Superior Court entered final judgment awarding condemnation 
proceeds of $6,101,000 in favor of the Company and interest on the judgment 
through that date of $4,552,000.  The State filed an appeal with the Supreme 
Court.  On April 17, 1998, the Supreme Court entered an order affirming the 
judgment of the Superior Court.  Interest continues to accrue on the 
judgment.  The Supreme Court expressly stated that its decision was "without 
prejudice to any party seeking to enforce any contractual obligations that 
may be implicated by the enforcement of the Judgment."

The State filed several motions to prevent the Company from collecting the 
judgment, which now exceeds $11,500,000 including interest.  The Superior 
Court denied the State's motions and ordered the State to pay the judgment 
by August 14, 1998.  The State filed an appeal with the Supreme Court.  
In December 1998, the Supreme Court directed that this case, together with 
other disputes between the Company, the State and the City of Providence, be 
consolidated before a single justice of the Superior Court.  This is more 
fully discussed below.

Under the CPI/State Agreement, the Company may be required to return to the 
State a portion of the award.  

Property tax dispute with the City of Providence:

During 1995, the Company received notice from the City of Providence (the 
City) of an increase in the assessed values of several of its parcels within 
Capital Center.  The increase in the assessed values was not the result of a 
city-wide revaluation, pertained to 1995 and subsequent years, and resulted 
in an annual increase in property taxes of $265,000.  The Company filed 
appeals for 1995 and 1996 but elected to make property tax payments as due 
pending the outcome of the appeals.  During the fourth quarter of 1996, the 
City reduced the assessed value of one of the parcels, resulting in an 
abatement of property taxes of $107,000 for 1995 and a reduction in the tax 
of $115,000 for 1996 and subsequent years.  The Company is unable to 
determine if the remaining appeals will result in an abatement of the 
property taxes for 1995 and subsequent years.

On August 18, 1997, the Company received from the City real property tax 
bills for taxes assessed as of December 31, 1996 reflecting an unexpected 
200% increase in the assessed values of a majority of the Company's parcels 
within Capital Center, resulting in an annual 

<PAGE>

increase in property tax expense of approximately $1,370,000.  This increase 
was not part of a city-wide revaluation.

On August 21, 1997, the Company received from the City real property tax 
bills purporting to assess taxes for assessment years ending December 31, 
1990 through December 31, 1995, based upon a $42,000,000 retroactive increase
in the assessed values of these same properties.  These increases were not 
part of a city-wide revaluation.  The aggregate amount of such taxes as 
billed was approximately $7,100,000, which amount did not include any 
interest.  The Company believes that the change in the assessed values is 
related to the March 1997 Superior Court decision that determined a 1987 
value for certain properties condemned by the State in 1987.

The Company believes that the increase in the assessed values for 1997 and 
prior periods are illegal and on August 27, 1997 filed a lawsuit against the 
City in the Superior Court.

On October 14, 1997, the Company received from the City real property tax 
bills for the second quarter of 1997 indicating interest due on the 1996 
assessment of $76,000 and interest due on the purported assessed taxes for 
the years 1990 through 1995 of $3,300,000.  The City asserts that the 
parcels subject to the retroactive assessment were under-assessed in the 
prior assessment periods.

On November 14, 1997, the Company filed appeals of the 1997 real property 
tax bills.

On August 5, 1998, the Company received from the City real property tax bills
for taxes assessed as of December 31, 1997, which taxes are based upon the 
assessed valuations as of December 31, 1996.  The Company has appealed these 
assessments and on October 16, 1998, filed a lawsuit against the City in the 
Superior Court claiming that the increased assessments for 1998 are illegal. 
In December 1998, the Supreme Court directed that the property tax disputes 
with the City, title to the Disputed Parcel, and the condemnation case 
previously discussed be heard by a single justice of the Superior Court.

The real property tax bills received by the Company in January 1999 from the 
City indicate that there remains unpaid taxes of $11,645,000 and interest 
thereon of $5,273,000 for assessment dates of December 31, 1990 through 1997.
Interest continues to accrue at the rate of 1 percent per month.

The Company is reporting for financial statement purposes (and paying)
property taxes based on the 1994 and 1995 assessed valuations while it 
pursues its lawsuits and its administrative appeals.  City of Providence 
property tax expense reported on the accompanying consolidated statements 
of income (loss) and retained earnings totaled $782,000 for both 1998 and 
1997.

The Company, upon consultation with counsel, believes that its position with 
respect to these assessments will be sustained; however, such proceedings can
be protracted and costly, and there can be no assurance that the Company will 
be successful in having the 1997 and 1998 increases or the retroactive 
assessments overturned.  The failure of the Company to prevail in the 
proceedings contesting the retroactive increase in assessed values would have
a material adverse effect on the Company's results of operations and 
financial condition and, while the Company believes, upon consultation with 
counsel, that the likelihood of such failure is remote, 

<PAGE>

CAPITAL PROPERTIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1998 AND 1997


2. 	Litigation with the State of Rhode Island and City of Providence
    (continued):

Property tax dispute with the City of Providence (continued):

if a court were to require the Company to pay the retroactive assessments and
related interest, the Company could be forced to seek the protection of the 
bankruptcy courts.
	
Dispute over ownership of Disputed Parcel:

Pursuant to the terms of an agreement dated January 1987 between the City and
the State (City/State Agreement), the City was obligated to convey the 
Disputed Parcel to the State.  As discussed above under the heading 
"Condemnation Case," pursuant to the CPI/State Agreement, the State was 
obligated to reconvey the Disputed Parcel to the Company.  In 1989, the City 
conveyed the Disputed Parcel to the State, and the State reconveyed the 
Disputed Parcel to the Company.  Contemporaneously, the Company purchased a 
title insurance policy in the amount of $1,600,000 covering the Disputed 
Parcel. 

The City now claims that its execution of the City/State Agreement was 
invalid, that its conveyance of the Disputed Parcel to the State was void, 
and hence the City is the true owner of the Disputed Parcel.  Moreover, in 
December 1998, the City adopted an ordinance authorizing the Providence 
Redevelopment Agency to condemn the Disputed Parcel.  The Company is 
contesting both the City's claim of ownership and the City's attempt to 
condemn the Disputed Parcel.

The Company, upon consultation with counsel, believes that its ownership of 
the Disputed Parcel will be affirmed and that the City will fail in any 
attempt to condemn this parcel.

This dispute with the City is included in the matters being heard by the 
single justice of the Superior Court as directed by the Supreme Court.

The Company's carrying value of the Disputed Parcel is $57,000.  The Disputed
Parcel's assessed value was increased to $7,909,000 by the City as more fully
discussed above under the heading "Property Tax Dispute with the City of 
Providence."   The real property tax bill relating to the Disputed Parcel 
received in January 1999 from the City indicates that the unpaid taxes and 
interest total approximately $2,315,000 through that date.

Consolidated case:

In the consolidated case of all of the various disputes between the Company, 
City and State before a single justice of the Superior Court, final briefs 
under various Cross Motions for Summary Judgment are scheduled to be filed by 
March 23, 1999.  The Company expects a decision in these matters to be issued
shortly thereafter.  Any decision is subject to appeal to the Supreme Court.

<PAGE>

3. Properties and equipment:

<TABLE>
     <S>                                           <C>

    	Properties on lease or held for lease:
    	  Land and land improvements	                	$ 4,206,000
    	  Parking garage		                          	   2,500,000
                                               			   6,706,000
				
    	Petroleum storage facilities:
       Land	                                     	   2,175,000
   	   Buildings and structures		                     	386,000
   	   Tanks and equipment	                        		4,203,000 
                                                 	  	6,764,000
    	
    	Office equipment		                               	 89,000
                                                 		 13,559,000
    	Less accumulated depreciation:
   	   Properties on lease or held for lease		        	675,000
   	   Petroleum storage facilities	               		4,342,000
   	   Office equipment		                           	   81,000
                                                  		 5,098,000
                                                  	$ 8,461,000	
</TABLE>

4.  Note receivable, Providence and Worcester Railroad Company:

In 1988, in accordance with a plan of distribution, the Company transferred 
the ownership of Providence  and  Worcester  Railroad Company (Railroad) to 
the Company's shareholders.  The Company and Railroad have a common 
controlling shareholder. As part of the plan, the Company received a 
promissory note in the amount of $9,377,000 payable over a period of twenty 
years with interest at 12% per year, (reduced to 10% in 1995) prepayable at 
any time without penalty.  In March 1998, Railroad prepaid the note in full.


5.    Description of leasing arrangements:

As lessor:

At December 31, 1998, the Company had entered into long-term land leases for 
six separate land parcels, three of which will not commence until 
construction begins.  One lease was amended in May 1997, extending the term 
thereof from 2092 to 2142, with no change in the rents due under the original
term of the lease, and rents for the extended period to be calculated in 
accordance with the formulas set forth for the original term. The Company 
also leases various parcels of land for outdoor advertising purposes for 
remaining terms of up to 30 years and for public parking purposes under 
short-term cancelable leases.

For those leases with scheduled rent increases, the cumulative excess of 
straight-line over contractual rentals (considering scheduled rent increases 
over the 30 to 149 year terms of the leases) amounted to $11,651,000 through 
December 31, 1998.  Management has concluded that a portion of the excess of 
straight-line over contractual rentals ($499,000 at December 31, 1998) is 
realizable when payable over the terms of the leases.

<PAGE>

CAPITAL PROPERTIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1998 AND 1997


5.  	Description of leasing arrangements (continued):

As lessor (continued):

Minimum future contractual rental payments to be received from noncancellable
leases as of December 31, 1998 are:

<TABLE>
     	 	Year ending December 31,
                <S>                      <C>
               	1999		                   $ 	1,321,000
               	2000		                     	1,411,000
               	2001		                     	1,433,000
               	2002		                     	1,464,000
               	2003		                     	1,486,000
              		2004 to 2142		           	185,166,000
                                       		$192,281,000	
</TABLE>

In the event of tenant default, the Company has the right to reclaim its 
leased land together with any improvements thereon.

Several leases provide that the tenants reimburse the Company for property 
taxes, which amounts are excluded from leasing revenues and expenses
applicable to leasing on the accompanying consolidated statements of income 
(loss) and retained earnings.  These reimbursements totaled  $377,000 
and $348,000 in 1998 and 1997, respectively.

As lessee:

The Company leases certain properties for outdoor advertising purposes under 
noncancellable leases which expire at various dates to 2005.  In most cases, 
management expects that in the normal course of business, leases that expire 
will be renewed or replaced by other leases.  Rent expense (including the 
Company's corporate offices through February 1998) amounted to $51,000 and 
$96,000 in 1998 and 1997, respectively.  Future minimum lease payments under 
noncancellable leases at December 31, 1998 are as follows: 1999, $40,000; 
2000, $26,000; 2001, $17,000; 2002, $12,000; 2003, $13,000 and thereafter, 
$30,000.


6. Income taxes:

A reconciliation of the income tax provision as computed by applying the 
United States income tax rate (34%) to income (loss) before income taxes is 
as follows:

<TABLE>

    <S>                                            <C>          <C>   
                                                      1998         1997        
   	Computed "expected" tax expense (benefit)	 	   $(114,000)  	$	41,000
   	Increase (decrease) in taxes  resulting from:
  	   State income tax, net of Federal income 
       tax benefit		                                  (2,000)    	11,000
   	  Other		                                        (19,000)    	12,000	
                                                  	$(135,000)	  $	64,000
</TABLE>

<PAGE>

Deferred income taxes are recorded based upon differences between financial 
statement and tax carrying amounts of assets and liabilities.  The tax 
effects of temporary differences which give rise to deferred tax assets and 
liabilities at December 31, 1998 were as follows:

<TABLE>

    <S>                                                      <C>   
  		Gross deferred tax liabilities:
 		   Property having a financial statement basis
		     in excess of its tax basis	                         	 $1,195,000
 		   Accrued rental income	                             	      199,000
	                                                             1,394,000
	  	Gross deferred tax assets, principally professional  
      fees in connection with condemnation case
      (see Note 2)	                                   	        (221,000)
                                                 	           $1,173,000
</TABLE>


7. Petroleum storage facilities:

Environmental incident:

In 1994, a leak was discovered in a 25,000 barrel storage tank at the 
Facilities which allowed the escape of a small amount of fuel oil.  All 
required notices were made to the appropriate environmental agency (the 
Agency).  To date, monitoring wells have shown no ground water contamination, 
and the leak has been contained in the soil under the tank.  The Company's 
engineering consultants (the Consultants) are working with the Agency to 
determine the extent of remediation.  The Consultants proposed several 
acceptable options and determined a range of estimated costs (including 
professional fees) to be $40,000 (for the capping of the contaminated area) 
to $405,000 (for the complete removal of the contaminated soil and its 
off-site disposal).  The Agency has advised the Company that it will accept 
the capping of the contaminated area as an appropriate remediation measure, 
subject to the placement of a notice on the Company's deed describing the 
location of the contaminated area. The Company has provided for the estimated
costs to remediate the contaminated soil by reporting a liability of $40,000,
which amount is included in accrued expenses, other on the accompanying 
consolidated balance sheet. 

Arbitration award:

The Company's Facilities were leased to an operator (the Operator) from 
October 1, 1991 through September 30, 1996.  At the termination of the lease,
there were several disputes between the Operator and the Company as to 
amounts owed by the Operator.  In accordance with the provisions of the 
lease, the matter was submitted to arbitration. In August 1997, the 
arbitrator awarded the Company $184,000 with respect to all claims.  The 
Company recorded the arbitration award in the accompanying consolidated 
statement of income and retained earnings for 1997 as follows:

<TABLE>

      <S>                                                 <C>
     	Award		                                             $184,000
     	Application against receivable from Operator	       	(42,000)
    		Amount payable to Operator for refund of 1996
   		   property tax paid in advance		                     (22,000)
                                                       	  $120,000
</TABLE>

<PAGE>

CAPITAL PROPERTIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1998 AND 1997


7.	Petroleum storage facilities (continued):

Wilkesbarre Pier:

The Wilkesbarre Pier (the Pier) is a deep-water pier in East Providence, 
Rhode Island, which is integral to the operation of the Facilities.  The Pier
and the Facilities are connected by two petroleum pipelines.  In 1995, the 
Company and Railroad (the owner of the Pier) entered into an agreement which,
among other provisions, gave the Company the right to acquire the Pier for $1. 

Effective January 1, 1998, Railroad and a company which uses the Pier to off-
load product (Oil Company) entered into an agreement (the Agreement) whereby 
Oil Company agreed to pay annual fees for five years, which range from 
$185,000 to $235,000.  Under the terms of the Agreement, the owner of the 
Pier is not required to make any repairs to the Pier.  The Agreement may be 
terminated by Oil Company upon ninety (90) days' notice only in the event of 
a failure of a component of the Pier that the owner does not repair.  

In January 1998, the Company exercised its right and acquired the Pier; and 
Railroad assigned its rights under the Agreement to the Company.

Included in revenues, petroleum storage facilities on the accompanying 
consolidated statement of loss and retained earnings for 1998 is $185,000 of 
fees paid by Oil Company.

Pipeline rights:

A trust for the benefit of the Company's controlling shareholder (the Trust) 
was party to an agreement (the Pipeline Agreement) with respect to the use of
the two petroleum pipelines which connect the Pier to the Facilities.  Since 
February 1983, the Company and any operator of its Facilities have had the 
right to use the pipelines for the transportation of petroleum products in 
consideration for which the Company assumed all of the Trust's obligations for 
repair and maintenance under the Pipeline Agreement and agreed to pay to the 
Trust a fee based upon the number of barrels of product transported through 
the pipelines. In 1997, the Company paid $20,000 to the Trust and was not 
required to make any payment with respect to maintenance and other expenses.  

In December 1997, the Trust entered into an agreement with the owner of the 
two petroleum pipelines (Pipeline Company), under which Pipeline Company 
released the Trust from liability in connection with the pipelines for any 
costs incurred by Pipeline Company prior to the date of the agreement.  
Further, under the agreement the Trust is responsible for its proportionate 
share of any future repair or replacement to the pipelines in excess of 
$25,000. 

The Company had the option to purchase the rights of the Trust under the 
Pipeline Agreement and exercised its option in January 1998, acquiring all 
rights of the Trust for $50,000, which amount is included in properties and 
equipment on the accompanying consolidated balance sheet.

<PAGE>

Current operations:

During 1997 and the first half of 1998, the Company purchased petroleum 
products which it stored and resold at the Facilities and leased storage 
tanks under short-term arrangements for the warehousing of petroleum products.  
Effective September 1, 1998, the Company entered into a short-term 
arrangement with a petroleum company (Petroleum Company) under which the 
Company operates the entire Facilities for the Petroleum Company.  The 
Company currently receives a monthly fee of approximately $78,000 and is 
responsible for labor, insurance, property taxes and other operating 
expenses.  The Company and the Petroleum Company are negotiating to extend 
the current arrangement for an additional three-year period plus options to 
extend on an annual basis.


8.	Operating segment disclosures:

The Company operates in two segments:  (1) Leasing and (2) Petroleum Storage 
Facilities.

The Leasing segment consists of the long-term leasing of certain of its real 
estate interests in downtown Providence, Rhode Island (to tenants that have 
constructed buildings thereon) and locations along interstate and primary 
highways in Rhode Island and Massachusetts (to a company which has 
constructed outdoor advertising boards thereon).  The Company anticipates 
that the future development of its remaining properties will consist 
primarily of long-term ground leases.  Pending this development, the Company 
leases these parcels and an adjacent parking garage for public parking purposes 
under short-term cancelable leasing arrangements.

The Petroleum Storage Facilities segment presently consists of operating the 
Facilities in East Providence under a short-term arrangement at a fixed 
monthly rate for the Petroleum Company which stores and distributes petroleum
products.  The Company and the Petroleum Company are negotiating to extend 
the current arrangement for an additional three-year period plus options to 
extend on an annual basis.

The principal difference between the two segments relates to the nature of 
the operations.  The tenants in the Leasing segment incur substantially all 
of the development and operating costs of the asset constructed on the 
Company's land, whereas the Company is responsible for the operating 
and maintenance expenditures of the Facilities.

The Company makes decisions relative to the allocation of resources and 
evaluates performance based on income before income taxes, excluding 
interest and other income, and certain corporate expenses. The accounting 
policies of the segments are the same as those described in the Summary of 
Significant Accounting Policies (see Note 1).  

There are no inter-segment revenues.  The Company did not incur interest 
expense during the two years ended December 31, 1998.

<PAGE>

CAPITAL PROPERTIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1998 AND 1997


8.	Operating segment disclosures (continued):

The following financial information is used by the chief operating decision 
maker for making operating decisions and assessing performance of the
Company's segments:

<TABLE>
	                                     
                                                     Petroleum
                                  									           Storage    
                                    	   Leasing 	   Facilities	    Total	 
Year ended December 31, 1998:
<S>                                    <C>          <C>          <C>
Revenues:
  Contractual	                        	$1,861,000  	$ 	620,000  	$2,481,000	
 	Noncash, excess of straight-line
   over contractual rentals			             47,000		                  47,000	
                                     		$1,908,000	  $  620,000	  $2,528,000	

Interest income	                      	$   ---		    $  ---	     	$   ---		

Depreciation	                         	$	  63,000  	$	 276,000  	$ 	339,000	

Income (loss) before income taxes		    $	 760,000	  $	(328,000) 	$	 432,000	

Assets	                               	$6,866,000	  $2,562,000  	$9,428,000	

Expenditures for properties and 
  equipment                          		$   ---	    	$	 136,000  	$ 	136,000	

	
Year ended December 31, 1997:
Revenues:
  Contractual	                        	$1,999,000	  $	  86,000  	$2,085,000		
 	Noncash, excess of straight-line
   over contractual rentals	             		82,000	                			82,000	
                                       $2,081,000	  $   86,000	  $2,167,000	

Interest income                      		$   ---	    	$   ---	    	$   ---		

Depreciation                         		$	  63,000  	$ 	292,000	  $	 355,000	

Income (loss) before income taxes	    	$ 	868,000  	$	(447,000) 	$ 	421,000	

Assets		                               $6,954,000	  $3,014,000	  $9,968,000	

Expenditures for properties and 
  equipment                          		$   ---		    $   ---	    	$   ---		

</TABLE>

<PAGE>

The following is a reconciliation of the segment information to the amounts 
reported in the accompanying consolidated financial statements:

<TABLE>

<S>                                          <C>           <C>
                                         	       1998		       1997	
Income:						
		Revenues for operating segments	          	$	2,528,000  	$	2,167,000
		Interest income                             			265,000     		444,000
		Arbitration award				                                       	120,000
			Total consolidated income	               	$	2,793,000  	$	2,731,000

Depreciation:
		Depreciation for operating segments      		$	  339,000  	$	  355,000
		Unallocated corporate depreciation		            	8,000	       	8,000
			Total consolidated depreciation		         $  	347,000  	$  	363,000

Income (loss) before income taxes:
		Income for operating segments            		$	  432,000  	$  	421,000
		Interest income		                              265,000	     	444,000
		Arbitration award				                                       	120,000
		Unallocated corporate expenses			           (1,033,000)    	(864,000)
			Total consolidated income (loss)
	   before income taxes	                    	$ 	(336,000) 	$	  121,000

Assets:
 	Assets for operating segments	            	$	9,428,000  	$	9,968,000
		Corporate cash and cash equivalents		       	4,632,000	     	568,000
		Note and interest receivable, Providence
			and Worcester Railroad Company				                       	4,026,000
		Income tax receivable		                       	175,000	     	152,000
		Arbitration award receivable				                            	110,000
		Other unallocated amounts			                    46,000	      	32,000
			Total consolidated assets	               	$14,281,000	  $14,856,000

Expenditures for properties and equipment:
		Expenditures for operating segments	      	$  	136,000  	$    ---
		Unallocated corporate expenditures			            8,000	
			Total consolidated expenditures		         $	  144,000  	$    ---	
		
</TABLE>

<PAGE>

CAPITAL PROPERTIES, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
YEARS ENDED DECEMBER 31, 1998 AND 1997


8.	Operating segment disclosures (continued):


The following table sets forth the percentage of revenue from major customers
to total consolidated revenue:

<TABLE>
      <S>                                     <C>           <C>
                                    			       1998		        1997	
     	Leasing segment:
		       A                                    23.9%	        15.3%
       		B	                                  	21.9	         22.5
       		C                                  		11.9	         13.9
       		D                                  		11.4         	13.3
                                             	69.1	         65.0
     	Petroleum Storage Facilities 
       segment (one	customer)	               	18.7	        
       		    Total                          		87.8%	        65.0%
</TABLE>
	     	

9.	Fair value of financial instruments:

The carrying amounts of the Company's financial instruments approximate their
fair values at December 31, 1998, due to the short maturities of cash and 
cash equivalents, receivables and accounts payable and accrued expenses. 

<PAGE>

                          DIRECTORS AND OFFICERS

                        OF CAPITAL PROPERTIES, INC.     
<TABLE>
<S>                                <C>

Robert H. Eder, Director          	Chairman of Capital Properties, Inc.
	Chairman  


Ronald P. Chrzanowski, Director   	President of Capital Properties, Inc.
  	President


Barbara J. Dreyer, Treasurer      	Treasurer of Capital Properties, Inc.


Stephen J. Carlotti, Secretary	    Attorney, Hinckley, Allen & Snyder
                                 		Providence, Rhode Island


James H. Dodge, Director	          Chairman of  Providence Energy 
                                			Corporation
                                  	Providence, Rhode Island


Harold J. Harris, Director	        President of Wm. H. Harris, Inc.
                                			(Retailer)
                                 		Providence, Rhode Island
  

Henry S. Woodbridge, Jr., Director	Consultant
                                  	Pomfret, Connecticut




TRANSFER AGENT	                    INDEPENDENT AUDITORS

American Stock Transfer &         	Lefkowitz, Garfinkel, Champi &
& Trust Company                   	DeRienzo P.C.
40 Wall Street                    	10 Weybosset Street
New York, New York  10005         	Providence, Rhode Island  02903

</TABLE>

<PAGE>


                  MARKET FOR THE COMPANY'S COMMON STOCK


                                  AND


                    RELATED SECURITY HOLDER MATTERS




Since June 1997, the Company's common stock has been traded on the American 
Stock Exchange, symbol "CPI."  Prior to that date, the Company's common stock
was traded on the Boston Stock Exchange.  The following table shows the high 
and low trading prices for the Company's common stock during the quarterly 
periods indicated, as obtained from the American Stock Exchange and the 
Boston Stock Exchange, together with dividends paid per share during such 
periods.  The prices have been restated to reflect the 3-for-1 stock split 
in June 1997.

<TABLE>
                                                                               
                                  Trading Prices       Dividends
      <S>                      <C>             <C>        <C>             
                               High            Low        Paid    

	     1998
     	1st Quarter		            8  5/8          7	          .00
     	2nd Quarter		            8  7/8		        8  1/8    	 .05
     	3rd Quarter            		8 13/16       		6 13/16	    .00
     	4th Quarter            		7  1/4        		5  7/8    	 .05

     	1997
     	1st Quarter	            	4  1/4	        	2  7/8     	.00
     	2nd Quarter            		6  1/4	        	3 15/16    	.05
     	3rd Quarter	            	6  5/8	        	5  1/2	     .00
     	4th Quarter            		6  7/8	        	6          	.05

</TABLE>

At March 1, 1999 there were 457 holders of record of the Company's common 
stock.

<PAGE>

                            EXHIBIT 21




            CAPITAL PROPERTIES, INC. AND SUBSIDIARIES

                   SUBSIDIARIES OF THE ISSUER

                     (AS OF MARCH 1, 1999)

<TABLE>
     <S>                               <C>

     Subsidiary                         		State of 
                                       Incorporation

     Tri-State Displays, Inc.          	Rhode Island

     Capital Terminal Company           Rhode Island

</TABLE>
                               III-8

<PAGE>
                              EXHIBIT 22

                          MAP IN ANNUAL REPORT

The map in the Annual Report to Shareholders is a plan of a portion of 
downtown Providence, Rhode Island, which indicates those parcels owned by 
the Issuer in that area known as "Capital Center" and immediately adjacent 
thereto.  A legend contains the Parcel Number, the Parcel Size and the 
Development on the Parcels as follows:

<TABLE>

<S>         <C>                        <C>

Parcel No. 	Square Feet
CAPITAL	    PARCEL SIZE               		DEVELOPMENT ON PARCELS
CENTER
	  2	         92,000
 	3S	         48,000		                  13 Story Office Building -
                                          235,000 gross square feet
	 3W         	35,000
 	3E	         24,000
	 4W	         46,000
	 4E         	22,000
	  5	         54,000     	             	8 Story Luxury Apartment Building -
		                                     	  454,000 gross square feet
  	6        	386,000 (Land, 303,000; Air Rights, 83,000)
 	7A	         76,000	                  	360 Car Public Parking Garage
   8          36,000                  		4 Story Office Building - 114,000 
                                          gross square feet             
  	9	         72,000


OUTSIDE
CAPITAL
CENTER
 	21	          3,000
	 22	         15,000

</TABLE>

(See President's Report, pages 2 and 3, for discussion of the development 
on the parcels.)

<PAGE>


                                  SIGNATURES

     In accordance with Section 13 or15(d) of the Exchange Act, the Issuer 
caused this report to be signed on its behalf by the undersigned, thereunto 
duly authorized.

                                                                       
                                         CAPITAL PROPERTIES, INC.

                                         By /s/ Ronald P. Chrzanowski 
                                         Ronald P. Chrzanowski
                                         President and Principal
                                         Executive Officer

Dated:  March 23, 1999




     In accordance with the Exchange Act, this report has been signed below 
by the following persons on behalf of the Issuer and in the capacities and on
the dates indicated.

<TABLE>
<S>                                     <C>

Signature		

/s/ Robert H. Eder                      March 24, 1999
Robert H. Eder                       
Chairman and Director


/s/Ronald P. Chrzanowski                March 23, 1999
Ronald P. Chrzanowski    
President and Director 
(Principal Executive Officer)


/s/ Barbara J. Dreyer				               March 23, 1999
Barbara J. Dreyer
Treasurer, Principal Financial Officer
and Principal Accounting Officer
                          

/s/ James H. Dodge                      March 23, 1999
James H. Dodge, Director                 


<PAGE>


</TABLE>