PawSox would need change in state law to get tax break from Providence

PROVIDENCE, R.I. (WPRI) – The new owners of the Pawtucket Red Sox would need a change in state law in order to obtain a tax break from the city of Providence for a proposed downtown stadium, according to the city’s law department.

The owners have said they want to move the team from McCoy Stadium to Providence by 2018, but current state law prohibits municipalities from offering a tax-stabilization agreement to “any manufacturing or commercial concern relocating from one city or town within the state of Rhode Island to another.”

“Unless amended by the General Assembly, RIGL Section 44-3-9(f) would preclude the city of Providence’s offer of tax stabilization to the new PawSox owners to incentivize the construction of a new ballpark,” Adrienne Southgate, Providence’s deputy city solicitor, told WPRI.com.

Tax stabilization agreements have historically functioned as an economic-development initiative designed to allow developers to gradually increase their property tax payments over the course of 10, 15 and sometimes 20 years in exchange for creating jobs and filling vacant buildings – often in downtown Providence. With few exceptions, each deal was negotiated separately with the City Council.

While the state law around tax breaks is designed to prevent one city from poaching business from another by offering incentives, the state has stepped in to help at least one major corporation move to Providence in the past. In 2003, GTECH moved its West Greenwich corporate headquarters from downtown and received a tax deal from the city.

PawSox President James Skeffington has not indicated what type of tax incentive package the team would seek for a 10,000-seat stadium in downtown, but City Council President Luis Aponte has said he believes the owners would need a tax-stabilization agreement.

Aponte said this week he plans to appoint a “working group” to study what type of incentives the city could offer the PawSox if they were to move to Providence. He said he wants former Council President Michael Solomon to serve on the panel.

Skeffington has said the ownership group still needs to do its “due diligence” when it comes to releasing a proposal for the stadium, but he has indicated the group wants to privately finance the construction of the park. During a taping of WPRI 12’s Newsmakers last weekm he said he’d like to explore a deal with the state that would involve public support in the form of lease payments. Skeffington said his ownership group would not seek taxpayer-backed bonds to pay for the park.

Along with Skeffington and Boston Red Sox President Larry Lucchino, the new ownership group includes former CVS CEO Tom Ryan; former Fleet CEO Terry Murray; TJX Companies Chairman Bernard Cammarata; William P. Egan, founder of Alta Communications and Marion Equity Partners; Habib Gorgi, managing director of Nautic Partners; Arthur E. Nichols and Frank Resnek, partners with the Boson Red Sox; and the Fenway Sports Group, which owns the Boston team.

The PawSox currently have a lease agreement with the state to use McCoy Stadium until 2021, but Skeffington has said he wants the team to move into its Providence ballpark as early as the beginning of the 2017 season if possible. He said the stadium could cost between $60 million and $70 million.

While the team will likely need to clear a number of hurdles with the state – including changing the law around tax-stabilization agreements – before entering into negotiation with Providence, Aponte has said he wants the city to be prepared for the conversation. Mayor Jorge Elorza said he is committed to keeping the team in Rhode Island.

“I look forward to reviewing proposals by the new owners to build a stadium in Providence and I am committed to ensuring that the team remains in Rhode Island,” Elorza said. “I look forward to working with all stakeholders to make this idea a reality.”

Dan McGowan ( dmcgowan@wpri.com ) covers politics, education and the city of Providence for WPRI.com. Follow him on Facebook and Twitter: @danmcgowan

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