Think of it as the Tale of Two Stadiums.
In Massachusetts, city and state officials marshalled considerable resources to bring the Pawtucket Red Sox to Worcester, offering the soon-to-be WooSox one of the most generous relocation packages in local history.
One of the biggest selling points: Worcester would back roughly $100 million in bonds to pay for the team’s new home, called Polar Park, which opens in 2021.
Drive an hour south, over the state line to Rhode Island. A much different approach was unveiled on Monday for a proposed soccer stadium aimed, in part, at filling the hole the PawSox will leave behind.
The City of Pawtucket will also issue debt to help make it happen, most likely $70 million to $90 million.
In both cities, tax revenue from new business activity would be used to pay off the bonds.
But there are two crucial differences: Unlike Worcester, Pawtucket will not guarantee the bonds, in case the new state and local tax revenue in downtown Pawtucket falls short of the debt payments. The lack of such a backstop is understandable in Rhode Island, particularly after the 38 Studios debacle. But it also means that bond investors will want higher interest rates to compensate for the missing guarantee.
The other difference? Pawtucket will use its bonds to pay for infrastructure, such as waterfront paths and a crucial footbridge over the Seekonk River. Developer Fortuitous Partners, meanwhile, will finance the $40 million soccer stadium with private funds. In Worcester, the bonds will cover the stadium construction costs, with the team’s lease payments contributing to the debt payments; the state, meanwhile, will pour tens of millions into infrastructure improvements around the ballpark.
Another bonus: The Worcester business community guaranteed the future Worcester Red Sox $3 million a year in sponsorship revenue.
Worcester rolled out the red carpet, after politicians in Rhode Island failed to offer a package attractive enough to keep the team there. The PawSox are a known commodity, drawing more than 5,000 people a night to McCoy Stadium home games during the baseball season. The team is owned by people with New England ties, including team chairman Larry Lucchino. A former Boston Red Sox CEO, Lucchino is a household name among local sports fans.
In Pawtucket, the soccer team doesn’t even exist yet. Fortuitous’s founder, Brett Johnson, said he’s just starting to seek investors. The selling point: The deal would include potentially significant tax benefits from a related development across the Seekonk River from the stadium, in a new “Opportunity Zone” made possible by the 2017 federal tax cuts.
Johnson said he needs additional development in Pawtucket to subsidize the 7,500-plus-seat arena that would be built on 17 acres owned by the city and National Grid on the west side of the river. (A spokesman for the utility said formal negotiations have not started.) The first phase would include an 11-acre site on the east side of the river that the city owns, and where Johnson would put 200-plus apartments as well as shops and restaurants. Moreover, Johnson intends to develop the 12-acre Apex site, north of Interstate 95, with offices and an indoor sports facility at some point in the future. Taken together, the projects could exceed $300 million in private-sector investment over time. (Fortuitous is still negotiating the precise deal with city leaders.)
With all that development envisioned, city and state leaders say the Fortuitous project could have a much bigger long-term effect than a new PawSox stadium would have had.
Johnson captured lightning in a bottle once before: He helped build an existing soccer team, now known as the Phoenix Rising Football Club, into a powerhouse after he invested in it and became cochairman.
Johnson wants to replicate that magic on the shores of the Seekonk. However, he needs to build a soccer team from scratch, unlike in Arizona.
He also faces competition from that Major League Soccer team just up the road, the Kraft Group’s New England Revolution — competition he doesn’t have in the Phoenix area.
The Pawtucket team would play in a league one step below MLS, the USL Championship league. (Adding to the fun: The Revs are launching their own farm team, but it would play in the league below Pawtucket.)
A Brown University graduate, Johnson said there’s more than enough room for everyone. Rhode Island is a strong market, he added, as evidenced by TV ratings there for soccer broadcasts. He approached the United Soccer League over a year ago for the rights to the Rhode Island market. The Pawtucket site, he said, has much potential for a stadium, with its waterfront views and high-visibility location.
Johnson said any doubts he might have had before Monday’s announcement have been erased by the overwhelming response he has received in Rhode Island.
But Johnson needs more than positive vibes: He needs private-sector partners.
Without a huge public subsidy, finding enough investors willing to bet on Pawtucket becomes even more crucial for Johnson to score this goal.