Worcester officials say the incentive package they assembled to bring the Pawtucket Red Sox to town won’t draw money from the city’s existing tax revenue.
But it’s still a generous offer, adding up to one of the biggest economic development packages in Massachusetts since Governor Charlie Baker took office nearly four years ago.
The baseball team’s payroll isn’t particularly large: about 40 people. But the ballpark, scheduled to open in 2021, will bring thousands of fans to Worcester on game days and is likely to spur private development on adjacent properties. Worcester city councilors began their review of the deal on Tuesday. Here’s a closer look:
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■ City bonds: Worcester would issue about $70 million in tax-exempt bonds and $30 million in taxable bonds to cover stadium construction and $8.5 million in land costs, city consultant Andrew Zimbalist said. The team’s rent payments for the city-owned ballpark would cover the debt service on the taxable bonds, Zimbalist said, and the team would contribute $6 million upfront.
The rest would be funded by new revenue generated within an 18-acre taxation district that includes the ballpark – such as from parking fees, advertising, and hotel taxes. The team’s estimates show the new revenue easily exceeding the $3 million in annual debt payments, but some economists aren’t so sure. Worcester would be on the hook for any debt costs not covered by the new revenue.
The team was unable to secure enough support in Rhode Island’s General Assembly for a bonding package that included a state guarantee, to stay in Pawtucket. In Worcester, the city provides that guarantee.
■ State assistance: The Baker administration pledged $32.5 million in infrastructure money, including at least $15 million for a new parking garage with at least 350 spaces, Zimbalist said. This would be the second-most-generous MassWorks grant package under Baker’s leadership, after the $125 million awarded for General Electric’s headquarters project.
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Zimbalist said the state Department of Transportation also plans to spend at least $10 million on nearby road improvements, such as bike lanes and upgrades to the notorious Kelley Square intersection.
And developer Madison Downtown Holdings will benefit from $2.5 million in state tax credits for 250 apartments that it plans to build within the taxation zone.
■ Other incentives: The city is offering property tax breaks on new construction worth about $3.7 million over time for two hotels that Madison will build there, with a combined 250 rooms, and a total of $1.9 million in property tax breaks for the new apartment building. An added sweetener for Madison: The city also is willing to waive $2 million in permit and utility connection fees.
Correction: An earlier version of this story mischaracterized the role of Andrew Zimbalist. He is a consultant for the city.
Jon Chesto can be reached at jon.chesto@globe.com. Follow him on Twitter @jonchesto.