PROVIDENCE, R.I. (WPRI) – The new PawSox stadium and its surrounding area will need to generate about $5 million a year in state and city tax revenue to cover borrowing for the ballpark under newly enacted legislation, according to a revised analysis.
In a memo issued Monday, General Treasurer Seth Magaziner’s staff said their current forecast indicates about $3.2 million in tax revenue will be needed to make debt payments on the tax-backed borrowing for the project. In addition, bondholders will want to see about $2 million more in tax revenue generated on top of that to ensure some cushion.
A bill approved by lawmakers last week calls for a new $83-million ballpark to be built on the Apex site in Pawtucket. Most of the money – $71 million – would be borrowed by the quasi-public Pawtucket Redevelopment Agency; $45 million of that debt would be repaid by the team, and $38 million would be repaid with state and city tax revenue.
Magaziner’s staff estimated the revised funding framework, which includes no taxpayer backstop for the debt, would cost $92 million in tax revenue over 30 years. That amount excludes the team-funded portion of the project.
However, the memo emphasized: “The total cost to taxpayers may be substantially less than this projection due to the Pawtucket Redevelopment Agency’s ability to use excess revenues to buy back the bonds – potentially saving millions in interest.”
The PawSox owners – who are also being wooed to Worcester – have yet to say whether they’ll take the deal approved by lawmakers. A team spokesman said Monday they have been reviewing the legislation since it emerged Friday, and plan to “meet promptly” with Pawtucket leaders “to begin the discussion of its contents.”
The treasury staff’s memo on the ballpark debt warned of “a wide margin for error” n their estimates due to “a high degree of uncertainty regarding several key variables which will impact the market’s appetite and, ultimately, the cost associated with these bonds.” House Speaker Nicholas Mattiello insisted on the bonds being backed only by revenue from the stadium and its surroundings, whereas an earlier Senate draft had included a taxpayer backstop to lower the cost of the debt.
The memo said the “single most important fact to make this transaction successful and cost effective” is how much of the area around the stadium is included in the district where locally generated tax revenue is dedicated to ballpark debt payments.