Worcester Business Journal

wbjournal.com | November 28, 2022 | Worcester Business Journal 13 Polar Park needs to pay for itself F L AS H P O L L How important is it to you that the Polar Park baseball stadium pays for itself? When City of Worcester officials announced in 2018 they would build a Canal District baseball stadium to get the Triple A minor league affiliate of the Boston Red Sox to move from Pawtucket to Worcester, they said the $160-million ballpark would pay for itself, as housing and commercial developments in the special taxing district around the stadium would generate enough tax revenues to cover the twice-annual bond payments, along with other revenues, such as parking fees and taxes on stadium concessions. Former City Manager Edward Augustus repeatedly said this pay-for- itself provision was the City's North Star in making financial decisions on the stadium. If the special tax district revenue falls significantly behind the bond payment amount, the City would have to figure out alternatives to make its bond payments, including raising taxes, cutting services from other departments, increased borrowing, or refinancing the bonds. When polled online, more than two out of three WBJ readers said it was extremely important to them the ballpark pay for itself. COMMENTS "Should have been at the 9/12/2018 council meeting." - Robert Anderson "The blame for this boon- doggle lies solely in the lap of the one that got out of Dodge and went to Franklin to a cushy job. Things that make you say, 'Hmmmmmmmmm.'" Not at all. The WooSox bring tangible and intangible benefits to Worcester. 4% L A W & A C C O U N T I N G F O C U S plan because the Madison buildings have been bolstered by two other proposals from separate developers: e Cove, a seven-story apartment-and-retail tower from Worcester developer Churchill James LLC; and a 400-unit housing complex called Table Talk Los from Boston Capital Development LLC, on the former site of the Table Talk Pies manufactur- ing facility. By adding those devel- opments into the projected revenue plan, Dunn said the city's assessor and chief finan- cial officer have determined the ballpark district will generate more revenue than is needed over the 30 years to cover the stadium debts, even using conservative estimates. Dunn didn't provide those calcula- tions or the figures showing the 30-year revenue generation estimates to WBJ. "We have actually been better off than we were four years ago because [proper- ty] values went up," Dunn said. "But now with interest rates [going up], I think it is good that we have taken a conser- vative approach to valuations since the beginning." Unlike last year, the City now has a method for keeping track of the revenue generated within the ballpark district improvement financ- ing (DIF) area, in order to ensure the stadium does pay for itself. Last year, before the stadium construction was completed and under the purview of the Worcester Redevelopment Authority, the City had to rely on what CFO Timothy McGourthy described as spreadsheet math to see how revenues were stacking up against expenses. "Now, the asset has been transferred to the City," the city manager's office said, "the DIF has been incorporated into the City budget, and all DIF revenues are and will continue to be tracked on a fiscal year [not baseball season] basis." Development fits and starts e pay-for-itself plan includes other ballpark district revenues as well, such as parking fees, taxes on stadium con- cessions, and the WooSox's annual lease payments, but the impact of those reve- nues toward the debt on the $160-million stadium is limited. e real solution to paying off the debt comes in the way of tax revenue through new developments. e original $125-mil- lion development plan from Madison Properties includ- ed two hotels, apartments, retail, restaurants, and of- fice space. at has shrunk in scope, including going Somewhat. The city should keep its promise, but the stadium expense is still worth it regardless. 28% W Extremely important. The stadium project was approved based on the promise it would pay for itself. 68% "If most people were paying attention, they at the time should have had a clear understanding that no other minor league team in the U.S. ever funded a project that paid for itself successfully. So, as much as I feel strongly that when leadership makes such a claim, they live up to it else they risk decreased support for future initiatives. Still, I'd pay a little extra in taxes to support the park, but frankly, I'd rather go see a game and spend money there having fun rather than just giving it to the city in the form of taxes." down to one hotel with the majority of the other buildings now anticipated to have a lower level of investment. All the buildings have been delayed multiple years; the hotel, for example, was slated for a 2022 opening but is now estimated to open in 2025. In Madison's agreement with the City, which includes property tax breaks and waiving of permitting fees, the developer is required to start making tax payments to the City on certain developments, regard- less of when they get built. Denis Dowdle, the president of Madison Properties, didn't return requests for comment. e Cove development, at the former site of e Lucky Dog musical hall, is more on schedule. e project, though, was supposed to cost $110 million and rise 13 stories but was reduced to its now planned seven stories because of permitting and regulations, Dunn said. "Some of that had to do with cost related but also because with a building of that size. It gets crazier in terms of code requirements and structural steel," Dunn said. e Cove is now under construction and expected to open in August 2024, said John Tocco, managing partner and COO for V10 Development in Boston, which is building the project with Churchill James. e Cove will have 16,000 square feet of commercial space and 171 residential units, and Flatbread Pizza and Bowling will operate out of the ground floor. e third proposed development in the ballpark district – the 400-unit, six-building complex from Boston Capital Development LLC – broke ground in late October on the first phase of Table Talk Los. e first phase includes 83 affordable units. Business turnover in the Canal District While largely not impacting the pay- for-itself plan, another issue facing the area around Polar Park is the exodus of businesses in the larger Canal District neighborhood. With the closure of Maddi's Cookery and Taphouse, Buck's Whiskey & Burger Bar, Smokestack Urban BBQ, e Hangover Pub and Broth, and PreGamers Sports Bar and Grill since August, the district has seen an upheaval of established restaurants. Batista, though, is con- vinced the neighborhood surrounding Polar Park will thrive. "I'm not too worried. ere are a lot of factors when people make decisions in the market," Batista said, citing labor shortages and costs as well as supply chain issues about why businesses may have closed. e larger problems voiced by busi- nesses in the neighborhood, namely parking issues, hasn't made the area any less enticing for investment, Batista said. "Some of the folks in the Canal Dis- trict have sold their business, have sold their properties," he said. "It's not like the parking and everything else was an issue. It is that they found a value in who they were, or they found value in their brand and they sold it; and they created a sense of value for that neighborhood, which could potentially bring another restau- rant or even the same restaurant with the same name and new ownership. "However, it does not preclude us from having conversations with the district and trying to figure out what we can do as a City to continue to support the neighborhood and make sure that growth continues," Batista said. Eric Batista, Worcester city manager Peter Dunn, Worcester chief development officer Construction on The Cove seven-story development began in November. This is a rendering of the project. IMAGE | COURTESY OF WORCESTER PLANNING BOARD

• Cover