New documents detail city, developer responsibilities in Tidewater soccer stadium project

THE DEVELOPER of the Tidewater Landing soccer stadium project in Pawtucket has applied for a 20-year Tax Stabilization Agreement that, if approved, would shave off about $1.85 million annually from its city property tax bill for 20 years. /COURTESY FORTUITOUS PARTNERS

PAWTUCKET – New documents between the city and the developer of the proposed Tidewater Landing project paint a clear picture of when and how the first part of the development will be built – and who’s on the hook if things go awry.

The three documents  – a tax stabilization agreement, a master development agreement and amendments to an existing ground lease –  are slated to be voted on by the Pawtucket City Council at its Dec. 8 meeting, according to an agenda filed with the city. 

Together, the agreements work together to advance the $284 million waterfront project while adding protections for the public dollars that will cover a portion of the public improvement expenses.

We want to make sure taxpayers are protected,” said Dylan Zelazo, the city’s director of administration. “If for whatever reason the development can’t happen, we don’t just want to sit there with vacant land.”

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Previously approved agreements between the city, state and developer call for $36.2 million in city and state bonds to cover public infrastructure improvements for the 28-acre development, which will be paid back using tax revenue from the project. Developer Fortuitous Partners is responsible for the remaining project costs, estimated at $240 million.

The company has in previous interviews offered little detail on its efforts to secure investors. But Daniel Kroeber, the company’s director of development, said on Friday it is in the final stages of an initial capital fundraising round, which will help cover the estimated $84 million first phase. He declined to share any financial figures on how much money had been committed or when the capital round would close.

The first phase of the project, centered on the 17-acre Tidewater site west of the Seekonk River,  includes construction of the flagship, 15,000-seat United Soccer League stadium, an outdoor event plaza and a riverwalk connecting to the second property included in the project.

A MASTER PLAN for the Tidewater Landing project details the design of the project, which is split between two properties on either side of the Seekonk River. /COURTESY TIDEWATER LANDING

Critical to closing the fundraising round will be a proposed break on the city property taxes for the property. Fortuitous has applied for a 20-year Tax Stabilization Agreement for the stadium improvements that, if approved, would shave off about $1.85 million annually from its city property tax bill for the first 20 years after the stadium and related public improvements are completed.

While the city would lose out on a majority of the tax revenue from the property for this initial 20-year-period, it’s still a better deal than if the city owned the property – and made no tax money from it – which was the original plan, Zelazo said.

“It’s a very small ask for it not to be taxed in exchange for the city not having to finance the stadium,” Zelazo said.

Under the terms of a master development draft agreement, Fortuitous has a year after the document takes effect to provide the city with “written attestation accompanied by reasonable evidence,” that it has enough money to complete the first phase of the project. In two years, the developer must provide similar documentation for funding of the second phase, which includes mixed-use residential, retail and office space.

The final phase, which includes a hotel and indoor event center along Division Street east of the river, will be detailed in a subsequent agreement “subject to analysis at the time of market feasibility and the availability of public financing,” according to the draft agreement. Fortuitous in previously submitted master plans estimated the final phase of construction would not begin until 2025, citing disruptions in the post-pandemic market for hospitality and indoor event spaces.

If public financing is not available 18 months after the first two phases are finished or if the groups can’t agree on a plan to fund it within 48 months of the current document’s signing, plans for the second phase are terminated, according to the master development agreement.

The stadium, meanwhile, is on track to open for its first season of USL soccer in the spring of 2023, with National Grid in the midst of environmental remediation for the property that once housed the Pawtucket Gas Co, Kroeber said.

ENVIRONMENTAL REMEDIATION and preliminary site work on the Tidewater site slated to host a 15,000-seat United Soccer League stadium has begun. /PBN PHOTO/BILL HAMILTON

The project timeline laid out in the agreement is nonbinding. What is firm, however, are other dates related to project funding.

After the groups agree upon a “definitive phase plan,” the Pawtucket Redevelopment Agency will put out the $36.2 million in state and city bonds intended to pay for public infrastructure in the project. Once the bonds are sold, the bank will use a portion of the bond sale revenue to reimburse the developer for public improvement-related costs, which must be paid within five days after the city approves receipts. The city has agreed to cover 4% of total public improvement expenses as part of its bond sale.

Zelazo described this contribution as  a “small markup” for the expenses incurred by the developer taking on management of public infrastructure that the city would otherwise put out to bid.

The document includes a host of contingencies for both the developer or the city if problems arise in financing or construction deadlines. If, for example, the developer does not meet agreed-upon construction dates within 120 days of the original deadlines, the city can sue them for damages, take over construction of the project or even end its commitment to provide the tax-increment financing. Similar consequences face the city or the Pawtucket Redevelopment Agency if they don’t pay what they’ve agreed to the developer or issue the bonds.

The Pawtucket Redevelopment Agency on Nov. 30 gave its blessing to the master development agreement by a 5-0 vote. The City Council must also approve the agreement, as well as the TSA and amended ground lease, for them to take effect.

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