Worcester Business Journal

4 Worcester Business Journal | January 20, 2020 | wbjournal.com BY BRAD KANE Worcester Business Journal Editor Public spending on WooSox projects to increase to $189M T he total public spending on all four Canal District proj- ects directly related to the August 2018 announcement by the Pawtucket Red Sox to relocate to Worcester has increased to $189 million, as the Worcester City Council is about to approve another $32 million in borrowing, according to a WBJ review of city and state documents. e Massachusetts state government is contributing $54 million toward those projects. e team – whose name will change to Worcester Red Sox when it moves in April 2021 – is expected to pay back the city government about $45 million. e city is planning on paying off the bulk of the remainder through a special taxing district surrounding the park, while it searches for other funding to limit its exposure. "No existing city tax will be used to fund the ballpark construction," said City Manager Edward Augustus, in his letter to the City Council on Jan. 10 detailing the $32-million cost increase. e council on Jan. 14 voted to review the matter with a public hearing, but the councilors' initial reactions indicated the extra spending would be approved. e $189-million public tab on the projects for the WooSox stadium – to be called Polar Park – does not include any of the city or state incentives for Boston developer Denis Dowdle's planned $125-million residential, retail, hotel and office projects surrounding the ballpark. For example, the Massachusetts Housing Development Incentive Program is awarding Dowdle $2.5 million, and the city has waived his first $2 million in building permit fees and offered him five separate property tax breaks; mean- while Dowdle's company Madison WG Holdings is paying the city $500,000 for site preparation work for one of his buildings and conveying the land for the ballpark to the city at no added cost. Four public projects e main public project is the stadi- um itself, which will total $137 million: $99 million for the stadium construc- tion, $29 million for the property acquisition, $3.5 million in interest from the 30-year loan bonds, and $5 million in estimated operating expenses to be borne by the city over the 30 years, according to its pro forma estimates. ose property acquisition costs could rise slightly, as the city remains in final negotiations with one property owner for the necessary ballpark land. Even without an increase, Polar Park is already the second most-expensive minor league baseball stadium ever built (adjusted for inflation) behind the $150-million Las Vegas Aviators stadium. On the ballpark site, the state government committed to spending $32.5 million through a MassWorks grant for infrastructure work and to build a 525-space parking garage. Just adjacent to the ballpark site on Green Street, the state government has provided a $3.5-million MassWorks grant to turn the General Pickett park- ing lot into an enhanced gateway to the Polar Park site, with the ability to host year-round events and retail. Lastly, the Massachusetts Depart- ment of Transportation is spending $16 million to remake Kelley Square, the troublesome entry point to the Canal District where a web of streets intersect. While Kelley Square was in need of improvement regardless of the PawSox coming to Worcester – the square had 403 accidents from 2013-2016 – Lt. Gov. Karyn Polito announced the project in the same 2018 press conference where the PawSox announced their inten- tions to come to Worcester, addressing concerns about new motorists coming to games and being unable to handle Kelley Square's unique traffic pattern. Paying off the bonds To pay off the bulk of its costs, the City of Worcester is borrowing $132 million in general obligation bonds, to be paid back over 30 years. e team is responsible for the annual payment for one of those bonds (estimated at $30.2 million in total for 30 years) and another $9.4 million in increased construction costs, to be paid off through a rising facility fee on tick- ets. e PawSox also have contributed $6 million in an upfront payment. Augustus told the City Council his office is searching for additional fund- ing to address the city's obligations for the remainder, having already received a $2-million MassWorks brownfields grant and a $500,000 U.S. Environmen- tal Protection Agency brownfields grant. e bulk of the city's bond obliga- tions, though, are riding on the special taxing district around the ballpark to generate enough revenue to cover its annual payments. ose estimated revenues include $6.2 million Dowdle is paying total over 20 years for use of the parking garage; taxes on his hotels, office buildings and apartment com- plexes; advertising on buildings; and city-run events. Even aer the increased costs Au- gustus announced on Jan. 10, the city is expecting all of the special district revenue over 30 years to cover its $137-million expense ($132 million in bonds and an estimated $5 million in additional operating expenses) and still generate an extra $23 million in additional revenue. A rendering of the proposed Polar Park Baseball stadium City of Worcester construction* $99.4 million & Worcester Red Sox General obligation bonds Ballpark property acquisition & site preparation** $29.19 million City of Worcester General obligation bonds Interest from City of Worcester borrowing money $3.5 million & Worcester Red Sox General obligation bonds Anticipated operating Taxes from the special development costs over 30 years $5 million City of Worcester district surrounding the ballpark On-site parking garage Mass. Executive Office of and other site infrastructure $32.5 million Housing & Economic Development MassWorks grant Remaking the Pickett parking Mass. Executive Office of lot into a Polar Park gateway $3.5 million Housing & Economic Development MassWorks grant Kelley Square realignment MassDOT 2020-2024 Capital $16 million Mass. Department of Transportatoin Investment Plan Polar Park projects and costs Projects Estimated costs Who is responsible for the cost Planned funding mechanism In its effort to remake the Canal District for the arrival of the Worcester Red Sox in 2021, the City of Worcester is spearheading a $189-million public spending effort, where the team will pick up about $45 million of the tab over the course of its 30-year lease. *Cost estimate increased $9.4 million on Jan. 10 **Cost estimate increased $20.69 million on Jan. 10 Sources: City of Worcester, Massachusetts Department of Transportation W RENDERING/COURTESY OF WORCESTER RED SOX

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