PAWTUCKET – Monday morning’s Rhode Island Commerce meeting on financing for a new Pawtucket soccer stadium and surrounding development was productive, said those who participated, with all the stakeholders in one room for the first time to get the facts.
The first portion of the meeting was held publicly, but the board then went into closed executive session for more than two hours, getting into the detailed analysis on the application to modify a previous proposal on financing.
Gov. Dan McKee said the 8 a.m. meeting was called to gain a mutual understanding of what’s being asked amid rising costs for the proposed professional soccer stadium and related development. Rhode Island is currently situated with great economic momentum, he said, “something we’ve never really seen before,” with Moody’s naming the state second in the country for its post-pandemic recovery, so the goal is to determine how to best maintain that momentum.
The board’s work related to the stadium proposal would figure out how to maintain the project and determine what investments the state should make in its budgets, said McKee, while also protecting taxpayers.
Monday’s meeting allowed the R.I. Commerce board to hear directly from the city and team on the challenges being faced, which include skyrocketing costs related to materials, labor, gas and oil, and others. There were no votes taken.
The Breeze reported last week on the significant increases for the development from original projections, from $83 million to some $124 million, due to unprecedented cost inflation.
Pawtucket Mayor Donald Grebien told board members that now is a critical point in Pawtucket’s renaissance. This is the most important economic development project in the city’s history, he said, and is also critical to the state in terms of revitalizing downtown Pawtucket as the gateway to Rhode Island.
Grebien reminded board members of the emotional and economic “gut punch” of the Pawtucket Red Sox leaving, as well as the request for proposals that saw Fortuitous Partners come aboard with an “ambitious transformational project,” and also saw a tax incremental financing (TIF) tool get approved by the General Assembly.
No one could have seen the challenges that would arise with a pandemic, Grebien said, including supply chain issues and ballooning materials costs. The site of the future stadium is already being transformed, he said, after being cleaned of pollution and graded, and has amazing views of the river. He said visitors will find an imprint of the stadium, where it will one day rise.
Officials need to use all tools available, said the mayor, including the TIF and private investment. No developer before has pledged $250 million in private investment here, he said, and $10 million of private investment has already gone into it.
There appears to be some disagreement among state and city officials behind the scenes on how the process of potential additional financing should go, with some saying that Rhode Island Commerce could act on its own within the parameters of previously-approved TIF legislation, and some wanting the matter to go to the General Assembly.
Speaking to press members in a virtual session after Monday’s meeting, Grebien and Brett Johnson of Fortuitous Partners sounded their usual optimistic selves. Johnson said he’s as confident as ever that the demand for soccer here will lead to sellouts, and that there’s a lot of enthusiasm for what will be an affordable product despite concerns over people’s discretionary spending habits.
Answering a question on what happens if the state doesn’t pony up the $30 million ask to fill the remaining gap in rising costs, Johnson said he hasn’t even begun to contemplate that possibility, saying he thinks it would be a disservice to everyone to start thinking about plan B when they have the right project for Pawtucket and Rhode Island.
Answering questions comparing the situation here to what happened previously with the PawSox, Grebien said this is a “much better project and proposal,” with so much more ancillary development around the stadium. Commerce officials were asking a lot of the right questions, he said, focused on economic development and establishing appropriate protections.
WPRI’s Tim White then asked what happens if the state only provides a “half loaf” compared to what they’re looking for and whether that sinks the project. “I hope not,” Grebien responded, saying the state remains focused on economic development and the teams did a good job Monday convincing the board “that this is more than just the stadium” but a master development around it, including commercial and housing development. There was a $70 million gap, he said, but that amount is now down to $30 million. As for the response if all the money needed doesn’t come through, he said they would “have to digest it and see where we are” if that time came.
Asked if he feels the state owes it to the city on some level to provide financing after the failure of the PawSox stadium, Grebien said there might be “a little bit of ‘I owe you,’” but it’s not about them being obligated to anything but seeing that this is a great development.
Dan Kroeber, of Fortuitous, reminded everyone that there are 435 units of housing planned as part of phase one of this project, as well as retail and commercial development. The company’s commitment to the entire project still stands, he said, and it has been designed, permitted, and is ready to rise off the ground. Much of the “value engineering” that took place to find savings within the plans came in areas the consumer won’t see, noted Kroeber.
He said the site will be ready in about a month, with ground sleeves now in place, and spots for goal posts and light poles.
Grebien said the city’s stake in the project is now more than $20 million, with $6 million of that invested to this point, and officials have applied for grants to cover aspects of the project that have been taken out to cut costs for now, including a pedestrian bridge over the Pawtucket River. Pawtucket is contributing far more than nearby communities toward their economic development projects, he said, and the state should be fully committed to the city.
In the public portion of Monday’s meeting, Johnson conceded that he’s sometimes prone to hyperbole, but there’s no exaggeration when he says this project will transform the state of Rhode Island, and he is humbled to play any role in that. He said he views himself as a partner, not a developer, and there’s been a lot of great work put into this project to this point. The project is at a “pivotal crossroad,” he told board members, but has already transformed Pawtucket in terms of the site work that has been done over the past few months.
Johnson reiterated that he sees the future Tidewater stadium as a destination for soccer “and every rectangular sport,” as well as an entertainment hub for all of Southern New England with concerts and other events, and it’s his “absolute pleasure” to have invested significant personal capital into it. Additional amenities include a future year-round event center, he said.
Director of Administration Dylan Zelazo reminded the board that this project’s value is more than $400 million, with $344 million of that in phase one. He said the city felt the deep loss of the PawSox when the team left, and a subsequent request for proposals recommended a sports tenant as a replacement.
Zelazo was among those who emphasized the many protections for taxpayers with TIF financing, which sends new tax revenues to the project. He spoke of how there’s now another $25 million in private equity commitment to the project, as well as $15 million in found savings.