PROVIDENCE – House Speaker Nicholas A. Mattiello released a draft of newly proposed legislation put forth on a new Pawtucket Red Sox stadium designed to lessen the state’s financial liability in the building of a new stadium along the Pawtucket River.
The legislation would create a “Downtown Pawtucket Redevelopment Activity Taxes Fund,” based on a tax increment financing district, which allows the state to separate city and state taxes from the area of the district from the rest of general revenue. The funds, which would be filled by several taxes, including hotel tax, food and beverage tax, income tax and sales tax, would not be distributed to the state’s general revenue fund. Instead, the money will be used to fund debt service on bonds associated with the project. Only money from the fund will be allowed to service the debt, with the intention of protecting the state from being forced to use general revenue in the case of a project failure, or lack of tax revenue in the redevelopment district.
The funds may also be used toward costs of infrastructure improvements in and around the area of the Downtown Pawtucket Redevelopment Project and toward a redevelopment revolving fund.
In the proposal, the project would be financed through the Pawtucket Redevelopment Agency, which would finance $71 million in tax-exempt revenue bonds.
The proposed project would split the costs of the projected $83 million, with the PawSox responsible for $45 million through a $12 million equity contribution and $33 million from the bonds, $23 million in bonds that state revenue from the district would pay for, and $15 million in bonds that Pawtucket revenue would cover the cost of. These funding breakdowns are in line with the bill passed in the Senate in January.
The redevelopment agency would own the property and lease its use to the team. The property, like McCoy Stadium, would be used for public events in addition to hosting PawSox games.
As a contingency in the bill, the PawSox would be responsible for any construction or development cost beyond the $83 million estimate. If the project did not reach the estimate, none of the team’s $12 million in equity could or would be refunded.
The bill also provides that the team would be responsible for 50 percent of the annual capital expenditures for structural repairs. The team, state and city would contribute a minimum of $150,000 a year to the Renewal and Replacement Reserve Fund, of which $75,000 will be contributed by the team.
The bill also states that the General Assembly finds the project “in the interest of, and for the benefit of, the citizens of the state, and will contribute substantially to the social and economic well-being of citizens of the state and significantly enhance the economic development and employment opportunities with the city and the state.”
It also cited “intangible benefits that increase the quality of life and civic relationship of … citizens,” declaring the use of public money for the stadium necessary and in the service of public purpose.
The proposed bill also clarifies the ability to use eminent domain for the project, clarifying that properties that would be acquired in relation for the project would not need to be blighted or substandard for the agency to decide it necessary to be taken for the stadium or surrounding project infrastructure.
The House Committee on Finance is scheduled to meet Thursday evening to hear testimony on the proposed legislation.
Chris Bergenheim is the PBN web editor.