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Worcester Ballpark Bonds Earn High Quality Rating

New Worcester ballpark concept

Moody’s Investors Service is giving a high quality rating to $27.5 million in bonds the City of Worcester, MA is set to issue for a new Pawtucket Red Sox (Class AAA; International League) ballpark. 

Worcester will build a six-acre ballpark, tentatively named Polar Park, that is slated to open for the relocating PawSox in 2021 and serve as the centerpiece of a 650,000-square-foot mixed-use development. As part of the funding formula for the $86 million-to-$90 million ballpark, the city of Worcester will borrow $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 estimated at a little over a million dollars annually, for a total of $30.2 million over 30 years.

A $27.5 million bond sale will act as the first part of the $100.8 million bond issuance for the ballpark project, and it is receiving a high quality rating from Moody’s, a credit rating agency. More from the Telegram & Gazette:

The $27.5 million bond sale, according to Moody’s, is the first installment of a $100.8 million bond issuance to finance the ballpark, and part of a $240 million redevelopment effort in Worcester.

“We project the new ballpark and other capital funding will increase Worcester’s already large amount of debt outstanding by an average of 6 percent annually over the next three years. The increase, however, comes as the city’s economy and tax base continue to grow — factors that contributed to the Red Sox affiliate’s decision to move to Worcester from Rhode Island,” Moody’s senior analyst Nick Lehman said in a statement. “Assuming tax base growth continues at or near the current rate, the city’s leverage will remain manageable and the ballpark issuance will not strain its credit profile.”

The Aa3 rating affirmed to the bonds is Moody’s fourth-highest rating, and ratings at this level are considered high quality and subject to very low credit risk.

Moody’s said maintaining a strong economy and continued tax base growth will help keep city debt manageable, and concluded the ballpark borrowing adds risks to the city’s credit profile, “including a diminished capacity to issue debt for other infrastructure projects and potential need to divert general fund revenues to repay debt.”

Current plans call for ballpark construction to begin in July 2019, and conclude in March 2021–in time for Opening Day of that season. It is tentatively named Polar Park, as naming rights will come from Worcester’s Polar Beverages. The PawSox will remain at Pawtucket’s McCoy Stadium for the 2019 and 2020 seasons.

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