PawSox bill calls for city agency to borrow $71M for ballpark

PAWTUCKET, R.I. (WPRI) – Draft legislation put forward Wednesday by Pawtucket Mayor Don Grebien calls for a city agency to borrow the vast majority of the money for a proposed $83-million new Pawtucket Red Sox stadium, with the state backstopping much of that debt.

Grebien unveiled the legislation during a State House news conference Wednesday where he pleaded with state leaders to take up the ballpark proposal before the end of the legislative session next month, just 24 hours after Senate President Dominick Ruggerio – with Gov. Gina Raimondo’s backing – ruled that out.

Under Grebien’s bill, $12 million would be contributed to the ballpark project upfront by the team owners. The remaining $71 million would be borrowed by the Pawtucket Redevelopment Agency, a city agency authorized in 1956 by the General Assembly “to assist in revitalizing Pawtucket’s neighborhood and commercial areas,” according to its website.

That $71 million would be split into three sets of bonds, called Series A, Series B and Series C: $33 million in Series A bonds that would be paid off by the team through stadium rent payments and naming rights; $23 million in Series B bonds that would be paid off by state tax revenue generated in and around the stadium; and $15 million in Series C bonds that would be paid off by city tax revenue.

As is currently the case with McCoy Stadium, the ballpark would be owned by the city of Pawtucket and leased by the state, which would then sublease it to the PawSox. Under the draft legislation, the state would technically pay for all three sets of bonds in the annual state budget, tapping revenue from the team for the Series A bonds and from the city for the Series C bonds.

The legislation says the state would enter into payment agreements for each bond series, and that the governor would provide “for submission of appropriation requests to assure repayment” of the $38 million in state and city stadium debt, including “the amount, timing, and manner of payment of all amounts available from the State to the Pawtucket Redevelopment Agency.”

According to the bill, the governor might also promise bondholders that she will include money in her annual budget proposals to ensure full payment of the state and city shares of the stadium debt.

While the bill emphasizes that the stadium bonds and payment agreements will not be backed by “the full faith and credit” of the state, the language would make clear to bondholders that the governor stands behind both the $23 million state share and the $15 million city share of the ballpark debt – though not, notably, the $33 million team share. The state backstop would likely reduce the cost of borrowing for Pawtucket, which was nearly bankrupt only a few years ago.

Raimondo, however, now appears concerned about including the state guarantee for Pawtucket’s stadium debt. After Grebien criticized her Wednesday for refusing to endorse the ballpark plan despite her aides’ close involvement in crafting it, Raimondo spokesman David Ortiz hinted at hesitation about the backstop.

“The administration understands Mayor Grebien’s frustration and gives him credit for working hard to keep the PawSox in Pawtucket – an outcome the governor still hopes can ultimately be achieved,” Ortiz said in a statement. “However, over the weekend and up until the time the Senate president said time had run out, the city expressed concern about its ability to make such a large financial commitment.”

Ortiz declined to elaborate. Dylan Zelazo, Grebien’s chief of staff, also declined to discuss details about the bond structure, saying only: “The legislation released today almost mirrors where we were six weeks ago.”

Meanwhile, there was no sign Wednesday that Ruggerio, Raimondo or House Speaker Nicholas Mattiello were reopening the possibility of taking up the stadium plan in the coming weeks. Ruggerio has, however, floated the possibility of lawmakers returning in the fall to consider it – though Mattiello has said he will only do that if Raimondo endorses it in full.

Ted Nesi (tnesi@wpri.com) covers politics and the economy for WPRI.com. He writes Nesi’s Notes on Saturdays and hosts Executive Suite. Follow him on Twitter and Facebook