In a key step, the Worcester City Council voted on Tuesday to create a District Improvement Financing area to help fund a new ballpark for the relocating Pawtucket Red Sox (Class AAA; International League).
The new ballpark, named Polar Park, is scheduled open for the 2021 season 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, with 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.
Private investment in the surrounding area is a major part of the funding plan, as Worcester officials say increased tax payments generated from the project, including additional development, will cover the remaining costs beyond those covered by team’s rent. To leverage that revenue, Worcester had to approve a District Improvement Financing (DIF) area, the Massachusetts equivalent of tax-increment financing. On Tuesday, the city council unanimously signed off on a plan to create 28.6-acre district surrounding the new ballpark. With this approval in place, Worcester can now proceed with the first in a series of bond sales for the project. More from the Telegram & Gazette:
“This is the next piece for us to put together for the ballpark,” said Candy Mero-Carlson, chairwoman of the City Council Economic Development Committee, which had endorsed the plan.
The district to be created – the Canal District Ballpark DIF Development District and Invested Revenue District – encompasses 16 taxable real estate properties in the Canal District. It includes the ballpark parcel and the development sites around the ballpark.
Within that area, the city will use what is known as District Improvement Financing, under a state law that allows municipalities to use tax revenues generated within a targeted area for the purpose of economic development.
A so-called DIF is generally enacted with an Invested Revenue District, where the city can collect and designate future incremental real and personal property tax revenues to support infrastructure investment and economic development within the proposed district.
Surrounding development has been a crucial part of funding models for numerous new ballparks, including those at the major league and minor league levels. In this case, Worcester officials are hoping that the new ballpark can be a catalyst for development in the city’s Kelley Square/Canal District area.
Under the current plans, the PawSox will spend the 2019 and 2020 seasons at Pawtucket’s McCoy Stadium before relocating to Worcester. Construction on the new Worcester ballpark is slated to begin next July, and wrap up in March 2021. Naming rights for Polar Park will come from Worcester’s Polar Beverages.
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