Borrowing $100.8 million for a proposed ballpark for the Pawtucket Red Sox (Class AAA; International League) will not hurt Worcester, MA‘s bond rating, according to a new assessment.
As first announced last month, the PawSox’s ownership and the city have agreed on a letter of intent to bring the team to a new Kelly Square ballpark. The six-acre ballpark, tentatively named Polar Park, would open for the 2021 season and serve as the centerpiece of an 18-acre, 650,000-square foot mixed-use development.
Under the financial terms of the proposal, the total cost of the ballpark is expected to be between $86 million and $90 million, with the city of Worcester borrowing $100.8 million ($70.6 million in general obligations bonds, $30.2 in bonds backed by team rent payments) to cover construction costs and the PawSox owners paying $6 million toward construction. Rent payments are pegged at a little over a million dollars annually, for a total of $30.2 million over 30 years. Worcester officials say increased tax payments generated from the project, including additional development, will cover the difference (a District Improvement Financing area — the Massachusetts equivalent of tax-increment financing — will be set up). Naming rights for Polar Park will come from Worcester’s Polar Beverages.
Worcester officials are still considering those terms, and on Wednesday discussed how borrowing for the ballpark could affect its bond rating. According to an assessment from Fitch Ratings, borrowing $100.8 million for the ballpark will not have a negative effect on the city’s bond rating. More from the Telegram & Gazette:
[Worcester’s chief financial officer Thomas F. Zidelis] said the city chose Fitch Ratings for the assessment because Worcester has its highest bond rating (AA) with that agency.
“At the request of the city manager, it was always our intention to go and get an assessment from the rating agencies,” Mr. Zidelis told the City Council Economic Development Committee Wednesday night.
“I am pleased to report that their assessment, which is similar to an appraisal on a house, has said this will not have any negative effect on the city’s bond rating,” he added. “The city shall maintain its current AA bond rating (with Fitch Ratings).”
Mr. Zidelis said there is even the possibility that the city’s bond rating can be upgraded in the future if the overall proposed $240 million redevelopment project for the Kelley Square area is expanded.
There are still some hurdles remaining for the ballpark project to move forward, and the PawSox to relocate from Pawtucket, RI. A city council committee backed the project earlier this week, but it still needs to be considered by the full Worcester City Council. The city council is expected to discuss the plan next Wednesday. Additionally, the plan still needs to be approved by the International League and Minor League Baseball, with Major League Baseball asked if it has any objections.
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