Worcester Business Journal

wbjournal.com | February 22, 2021 | Worcester Business Journal 9 Polar Park cost changes The cost to acquire the land, prep the site and build the Polar Park baseball stadium for the Worcester Red Sox has risen 58% since the project was first announced in August 2018. The City of Worcester, which is paying for the bulk of the project through bond borrowing, updated the original estimate twice, each time when it asked the City Council to approve more borrowing for the stadium. Here's how and why those estimates have changed. Original Aug. Jan. 2020 Jan. 2021 2018 estimate estimate estimate Construction & design costs $90 million $99.4 million $118.2 million Land acquisition & site prep costs $10.8 million $29.2 million $41.3 million Total cost estimate $100.8 million $132 million* $159.5 million Main reasons for 5% rise in Design changes, construction cost changes construction rising construction prices; new costs, COVID complexities in shutdown design impact Main reasons for land & site Increased business Moving of $9.4 prep cost changes relocation costs, million from need for retaining the construction wall cost segment to the site prep segment *Includes $3.5 million in interest for borrowing money Source: City of Worcester At the time these underestimates were realized, construction was already a few months underway. at meant while construction was ongoing, planners were making what Augustus described as significant design changes to fit within the project's budget. Because planning documents were rushed, some were incomplete according to state construction document guidelines, pushing up costs yet further, Augustus said. A delayed design also pushed back the process for obtaining construction materials. Later into the process, high costs forced engineers to redesign the project once construction was underway. "e further on into the project you go, the more expensive changes become. Because you're invariably doing things that cost more money now," Brehm, the Drexel professor, said. Wish-list design e WooSox initial design plan for Polar Park was more of a wish list that had to be pared down, said Peter Dunn, the city's chief development officer, in an interview with WBJ. e early-stage cost estimate from the city was based on the information available to officials at the time, Dunn said. In one example, soil tests for environmental remediation typically need to be done over longer periods of time than the city and team had. "at's just the nature of construction in some cases," Dunn said. Philip Barlow, a construction management professor at California Polytechnic State University who reviewed the Polar Park project for WBJ, said basing costs off of similar construction in other locations is a precarious way of doing initial estimates and leads to overruns. "at is a very risky, and very rudimentary and a very quick broad- brush way of creating initial estimates," Barlow said. Even factoring in aspects out of the control of project leaders like the coronavirus pandemic, having the costs rise $58.7 million is not typical of projects, even one of this scale, he said. "ose cost overruns are inexcusable," Barlow said. e WooSox goal is to create a world- class stadium equal to the best facilities in minor league baseball. In the team's finalized 35-year lease agreement with the city, the deal calls for Polar Park's quality to be on par with minor league stadiums in El Paso, Texas; Charlotte, N.C.; and Columbus, Ohio, whose construction costs range from $59 million to $84 million in 2021 dollars. "We are confident the experienced team of architects, engineers and construction professionals will complete this with a quality crasmanship and attention to design that will make Worcester proud," said Janet Marie Smith, the renowned stadium architect who designed Camden Yards in Baltimore and advised the Polar Park team on the project. e 31-month timeline for project completion was a challenge, similar to all projects of this scale, Smith said. "We admire the city's leadership, particularly with the challenges of this global pandemic, and are excited about our 35 years ahead together," she said. e city hasn't detailed what ballpark design features were changed for cost savings, and officials maintain Polar Park will be a world-class ballpark. Polar Park's capacity was reduced slightly to 9,508 from 10,000, making the stadium the smallest in the 14-team International League, and 5% smaller than the team's McCoy Stadium in Pawtucket. At the total cost of $159.5 million for land acquisition, site preparation and construction, Polar Park is the most expensive minor league ballpark ever built, even adjusting for inflation. Augustus called the city-built project more expensive than if the team had built a private stadium, because public projects are more expensive due to use of higher-wage union labor. Per the requirements of the construction contracts, 95% of the project used union labor, and the construction workforce is 22% Worcester residents, 22% people of color, and 6% women. "Public construction projects almost always yield a higher cost than private projects," Augustus said. "is structure is one reason why Polar Park will be more expensive than other privately constructed minor league ballparks across the country." Paying for itself Despite the increases, city officials still believe the stadium will pay for itself over 35 years, Dunn said, with taxes from a special district around the ballpark and revenues from stadium activities covering the $88.2 million in expenses the city is responsible for. In announcing the cost overruns on Jan. 8, Augustus did not provide the City Council with an updated pro forma of how those expenses would be offset, as he did in January 2020 when the cost estimate increased from its initial $100.8 million to $132 million. In that instance, the city expanded the size of the special taxing district, among other measures, to make up the difference. A new pro forma is being created. Yet, despite the latest estimate rising to $159.5 million, the city's cost responsibilities remained relatively the same as they were in January 2020. With the new expenses, the WooSox are picking up the construction expense increase, and state and federal grants offset other aspects of the project. Building Polar Park was made costlier by a hilly site with contaminated soil, which runs up against a raised railroad line at right. Note from WBJ on the cost of Polar Park Worcester City Manager Edward Augustus last updated the cost of Polar Park in a Jan. 8 memo, which said the cost of the stadium construction would be $116.7 million and the cost of land acquisition and site preparation for the stadium would be $41 million. Based on this memo and conversations with city officials, WBJ wrote the story "WooSox stadium costs rise to $157M, becomes most expensive minor league stadium" on Jan. 8, which was later reprinted in the Jan. 25 magazine. Upon WBJ's closer examination of Augustus's memo and the lease contract with the Worcester Red Sox, some rounding and $1.5 million in federal CARES Act funding were omitted from the original total in the Jan. 8 story by WBJ. The estimate for the total cost of Polar Park now stands at $159.5 million, and the City of Worcester has confirmed this figure. Even as the project costs have risen over the past two years, the City Council and the Worcester Redevelopment Authority, which technically owns the ballpark site, have been overwhelmingly supportive of Polar Park, unanimously approving contracts and updated financing deals. "Some people stress just the finances," City Councilor Gary Rosen said in the Jan. 12 City Council meeting, comparing the monetary costs against the feel-good and intangible benefits the team will bring. "ey don't like the finances, so we can't have baseball." Because of the initial decision on where to build, Dunn said costs would have likely remained consistent with their final total no matter what. "I don't know that the costs could have been mitigated," he said. W PHOTO/GRANT WELKER

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