PawSox ballpark vote expected this month

PawSox ballpark vote expected this month

Exact tax zone a key component of final plan

PAWTUCKET – With the end of the General Assembly session fast approaching, possibly by June 22, local and state officials say they’re confident that the House of Representatives will have a chance to vote on a proposed new financing proposal for a downtown Pawtucket baseball stadium before lawmakers head home.

Last Thursday, officials started what they called “a vetting process for this new concept” during a House Finance Committee meeting.

Leaders at both the state and local level are emphasizing that this is the most critical juncture yet for a stadium proposal that will likely shape the future of Pawtucket, one way or the other. If no enabling legislation is passed before the end of the 2018 session, it’s anyone’s guess as to what will happen to the city’s minor league baseball team. According to officials, a preliminary proposal is on the table from officials in Massachusetts to move the team to Worcester.

Representatives for the Pawtucket Red Sox again declined to comment on whether they’ll find the newest proposal acceptable.

House Finance Chairman Marvin Abney said the risk to taxpayers in the latest proposal “has been greatly reduced,” though the overall cost may be higher due to how it is financed.

Specifics on exact costs were still in question as of press time, as there were still “a lot of moving parts” and ways to reduce or increase costs in a final proposal, according to Sharon Reynolds Ferland, fiscal adviser to the House of Representatives.

House Finance Committee member Antonio Giarrusso asked last Thursday if the responsibility for proposed special revenue bonds would fall on the state if revenues from the stadium project prove inadequate, but Reynolds Ferland clarified that these are “non-recourse” bonds, meaning the bondholders would bear all responsibility for losses if they came about.

District 62 Rep. Mary Duffy Messier, of Pawtucket, presented a revised bill to the House Finance Committee. She said it assures the “best development of the stadium, while keeping taxpayers clear of additional taxes going forward.” This ballpark would be the next piece in Pawtucket’s downtown renaissance and maintain an affordable entertainment venue in the city, she said.

Dylan Zelazo, deputy director of administration for the city, said last Thursday’s House Finance meeting was encouraging in that there was a lot of “openness and positivity to keeping the team in Pawtucket and Rhode Island,” as well as a recognition that the value here extends to “reactivating” Pawtucket’s riverfront area.

“It’s not just a local priority, but a statewide priority,” he said.

While the underlying principles and fundamentals of the $83 million stadium proposal ($23 million from the state, $45 million from the team and $15 million from the city) are the same, this latest approach favored by House Speaker Nicholas Mattiello takes a more conservative approach on the risk side, he said.

Steve Frias, a 2016 opponent of Mattiello in Cranston who has hinted that he could run again this year if the General Assembly approves a stadium deal, again criticized the plan last week, saying it’s become even more difficult to show that the project will pay for itself. He insisted that there is still risk to taxpayers, as well as a question about how a potentially larger tax incremental financing (TIF) zone in the area of the proposed stadium at the Apex Department Store site on Main Street could end up hurting the city due to limiting future money going toward the budget.

Zelazo this week disputed the assertion from Frias, saying it has “zero credibility.” Only new revenue would go toward the ballpark, he said, and the only way Frias would have a point is if the area around the stadium would see significant investment without the stadium, a point that is not supported by decades of data set forth by numerous experts.

“You have to accept the premise that city isn’t going to see a great deal of private investment in these downtown properties without this type of catalyst happening,” he said.

This proposal has never been about a “massive swath” of land, but a limited area of the downtown and riverfront that have stagnated over time, Zelazo said. Overall, he said, finance experts have agreed that Pawtucket will have more money in its coffers if the stadium is developed than if it isn’t. If the proposal doesn’t happen, the city loses the team and the dollars, he said.

“None of those new revenues are going to exist if the PawSox leave,” emphasized Zelazo.

The exact sizing of the TIF zone, where new tax revenues generated are targeted for the stadium, has become more important now under the new financing mechanism being considered, said Zelazo.

“Undoubtedly it can work, it just has to be set up for success,” he said.

The revised approach released by the House last week removes state backing of the bonds and taxpayer risk if the deal doesn’t pay for itself, according to leaders.

“I have been reluctant to move forward with prior versions of the deal because of the risk to the state’s taxpayers,” said Mattiello in a statement. “This alternative envisions segregating revenues generated in a new (TIF district) to ensure that revenues from the project will be directly tied to the debt payments, and the project will stand or fall on its own.”

The bonds issued by the Pawtucket Redevelopment Agency to support the project will be paid back from revenues generated in the district including the team’s lease payment, states the proposal. The state would contribute the same amount as it would have lost if the team moved out of state. But importantly, the state will not ultimately be responsible for these bonds if the deal doesn’t pay for itself, stated Mattiello and his aides. The debt will be more expensive without the state’s backing, but that is the trade-off to remove taxpayer risk.

The overall cost of the project could increase by as much as $25 million without the state backing the Pawtucket Redevelopment Agency, but that’s the tradeoff for removing the risk to taxpayers, according to some in state government.

Local members of the House of Representatives weren’t commenting this week on whether they believe the proposal will come to a successful vote.

Mayor Donald Grebien told House Finance Committee members he is “excited and hopeful now more than ever” about a project that is “so critical to the city of Pawtucket.” He thanked everyone involved in getting the stadium proposal to this point. He emphasized that the final numbers developed at the House level need to work, and bonds have to be able to be sold.

John Simmons, executive director of the Rhode Island Public Expenditure Council, testified last Thursday that he likes the idea of a “super TIF,” where all revenues go toward the cost of the project, as there’s no risk to it. Such a move is used often, he said.

Simmons urged lawmakers to implement a number of safeguards, including securing a 30-year commitment from the PawSox and getting more clarity on the pledged 50,000 square feet of development around the stadium by the team. Firming up those details will help in making the bonds for the project more secure, he said.

Stefan Pryor, Rhode Island secretary of commerce, thanked the PawSox for their patience during what has been a lengthy vetting process, as well as Grebien for his leadership.

“I hope we can arrive at a solution that works for them and Rhode Island,” he said, describing the latest proposal “a promising framework.”

“Pawtucket deserves our help,” said Pryor, and will only fulfill its potential in the downtown if “we provide the catalytic assistance to help get there.”

Officials said there are many ways of driving down interest rates without the state backing, and all will be explored by bond counsel and underwriters over the coming days.

Sen. Donna Nesselbush, whose District 15 encompasses the stadium site, said she’s happy to see what appears to be “a path forward” for the stadium after the House reworked the Senate version of the bill. Officials are working together to make this “immense opportunity” a reality both for the city and state, she said.

Comments

All the Politicians, labor leaders, media and Pawsox fans who have repeatedly said "there is no risk to the taxpayer" are going to be able to make a killing on the PRA bonds. Because the bonds aren't backed by the city or state the return is going to be fantastic. Let's go Grebien, Conley, Ruggerio, Raimondo, York, Achorn, Nesselbush etc. Buy these bonds.