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How the $400M Pawtucket soccer plan compares to the PawSox deal

Blackstone Valley

PAWTUCKET, R.I. (WPRI) – In many ways, the $400 million development plan unveiled in Pawtucket this week looks similar to the deal proposed two years ago by the Pawtucket Red Sox.

It focuses on the same parts of the city. It’s anchored by a professional sports stadium. And it will require both private and public money.

But unlike the PawSox proposal, which became a political controversy that ended with the minor league baseball team relocating to Worcester, city and state leadership are showing solidarity in their support for the new development anchored by a professional soccer stadium.

The collaborative spirit likely comes in part because there’s not much to debate among the state’s top lawmakers.

The R.I. General Assembly last session approved a special program for Pawtucket called Tax Increment Financing, which allows the state and city to enter into such a deal, to be funded by future tax revenue from the development. And if the private developer, Fortuitous Partners, reaches a final agreement with the state in the next 120 days, no additional legislative approval is required, according to state officials.  

But local and state leaders are also adamant that the new project — dubbed Tidewater Landing — will be better for Pawtucket and Rhode Island compared to the one proposed by the PawSox, despite actually costing taxpayers more money. Commerce Secretary Stefan Pryor, who negotiated with Fortuitous, called the new deal “far superior.”

“We believe there will be a catalytic effect that far exceeds what the PawSox proposal would have yielded,” Pryor added.

So, how does Tidewater Landing compare? It’s much bigger, but some of the underlying details look similar.

The $400 million plan includes the construction of a new 7,500-seat stadium on the west bank of the Seekonk River, which would become home turf for a new United Soccer League Championship team.  

Across the river, the plan is to build a mixed-use development with 200 housing units, a riverside park and retail shops. The two areas would be connected by a new pedestrian bridge.

And if the city and state are successful in acquiring the Apex land just a stone’s throw north of Interstate 95, the plan includes the construction of a new sports events center, a hotel and commercial space.

In total, the three sites are supposed to create an estimated 2,500 direct and indirect construction jobs and 1,200 permanent jobs once completed, according to the state. Taxpayers are expected to contribute between $70 million and $90 million – equaling about 20% of the $400 million investment – but public officials promise the plan will pay for itself with the tax revenue generated from the ensuing economic activity.

“Absolutely, the city is in a much better position today,” said Pawtucket Mayor Don Grebien, who lobbied hard to keep the PawSox from leaving the city where they’ve played home games at McCoy Stadium since it was built in the 1940s. (A plan for the future of McCoy is still being discussed.)

Two years ago, the PawSox ownership group proposed a similar, albeit smaller, version of the same vision. The Triple-A baseball team, which announced last week it would change its name to the Worcester WooSox after moving to Massachusetts, proposed an $83 million plan to build a new 9,500-capacity baseball stadium on the Apex site.

While less specific than Fortuitous, the ownership group promised the stadium would jumpstart new investments in the area, and promised to develop at least 50,000 square feet of retail or mixed-use development without any public subsidy to get the ball rolling.

A consulting firm, B&D Ventures, estimated the PawSox ballpark plus ancillary development on the Apex and Tidewater sites would have created 1,560 direct and indirect construction jobs and 1,288 permanent jobs.

Like public officials now, the PawSox ownership group promised the stadium would pay for itself with tax revenue generated from the additional economic activity. And taxpayers were asked to chip in $38 million for the stadium, representing about 46% of the $83 million cost.

Graphic created by Lisa Mandarini

Democratic House Speaker Nicholas Mattiello, who was against the PawSox proposal during an election year when his Cranston constituents opposed the deal, feels differently about the new development in part because Fortuitous is expected to pay for the new soccer stadium.

“It’s amazing. It’s exciting. And when it’s all done, the soccer stadium is going to be 100% funded with private investment – no public investment,” Mattiello said during a press conference Monday where he celebrated the announcement with fellow Democrats Gov. Gina Raimondo and Senate President Dominick Ruggerio.

The PawSox proposal would have made the ballpark publicly owned. The team would then have leased it over multiple decades, similar to the current structure for McCoy Stadium. Under the new plan, Fortuitous will own the soccer stadium, which could benefit taxpayers in part because the company will be responsible for covering upkeep costs at the facility; deferred maintenance contributed to the deterioration at McCoy.

But Mattiello’s claim that no public investment will go into the soccer stadium is somewhat muddled by the fact that the city will own rights to the underlying land, meaning it’s possible Fortuitous will get a break on property taxes. (A Commerce spokesperson said those details are still under negotiation.)

And while no money is expected to go directly into the construction of the stadium, the $70 million to $90 million in taxpayer funding – representing double the amount sought for the PawSox stadium – will go toward infrastructure improvements to make the stadium possible.

Rhode Islanders will also likely cover those costs using revenue bonds, somewhat similarly to the PawSox deal, which often put taxpayers on the hook to pay back investors should the development fail to generate enough revenue.

But state officials said the state would raise the money using a special type of revenue bond backstopped only by tax revenue collected from the new development. Mattiello pitched a similar type of financing structure in a revised PawSox proposal last year.

State officials are promising “strong taxpayer protections for both the state of Rhode Island and the city of Pawtucket,” according to a news release. “Provisions will ensure the public pays for performance according to agreed-upon project milestones.”

Specific details of those safeguards are expected to come out in the next few months, but similar performance-based stipulations are baked into other public subsidy programs offered by Commerce.  

Regardless, the new development has already drawn skepticism in some quarters.

University of Rhode Island economist Leonard Lardaro questioned whether the investment would be worth the return.

“If history is any guide, the figure that both the state and the developers are assuming, $400 million, will turn out to be far closer to $200 million,” he wrote in an email. “In light of that, it is reasonable at this point to expect that the $90 million public subsidy that is being discussed will end up accounting for about 45% of the actual economic benefits that will occur.”

Steven Frias, Rhode Island’s Republican national committeeman and a two-time Mattiello opponent, was critical of the PawSox deal and in an email indicated he isn’t convinced about this idea, either.

“I don’t see why this project will have a positive economic impact. Sports stadiums essentially never do,” Frias wrote.

Perhaps the starkest contrast between the two deals, however, is that the new one has the support of the state’s most powerful decision-makers, which offers Fortuitous a much clearer path forward than the PawSox owners ever had.

And for Grebien, who’s long struggled to attract significant development to the state’s fourth largest city, the possible influx of so much new economic activity helps make up for the impending departure of the ballclub.

“It’s not where anybody wanted to be, but as we look at this, we wish them well,” Grebien said of the PawSox. “We are going to move forward.”  

Eli Sherman (esherman@wpri.com) is a Target 12 investigative reporter for WPRI 12. Follow him on Twitter and on Facebook.

Copyright 2019 Nexstar Broadcasting, Inc. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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