What’s Next for the PawSox?

Paws_-_PawSox_mascotIt has been a turbulent ride for the Pawtucket Red Sox organization in recent years. A few years after changing ownership, the team is struggling to solidify a place to play. McCoy Stadium, built in 1942 and dedicated in 1946 for use by the Pawtucket Slaters farm team of what was then the National League Boston Braves (soon to become the Milwaukee Braves and now the Atlanta Braves), then doing a short stint in the 1960s with the Pawtucket Indians farm team for the Cleveland Indians, since 1969 has housed the Pawtucket Red Sox affiliate of the Boston Red Sox.

McCoy Stadium is no longer fit to host minor league baseball… and maybe not even little league for that matter. The Rhode Island General Assembly did a study on the state of McCoy, finding it was fiscally irresponsible to make any renovations to the stadium. McCoy has already undergone two major renovations in its history and a third would cost nearly as much as the price of building a new stadium, without the economic advantages of building a new stadium.

The team is under contract to play there until 2021, and they will move on to a new stadium as soon as the contract ends. The next home for the team has been unknown since the current owners, led by former Red Sox President Larry Lucchino, bought the team in 2015. Providence was the first choice to be the team’s new home, but that proposal failed due to poor funding. With Pawtucket struggling to have a solid plan in place to keep the team, the organization has flirted with moving the team up Route 146 to Worcester. Finally, we may have a resolution to this question.

The state Senate has done their part, by moving the bill along back in January. Spokesman Greg Pare said on behalf of Senate President Dominick Ruggerio, “The Senate version of that legislation was passed in January and sent to the House of Representatives. Any amendments being considered or made… that’s all being made on the House side.”

The House was quiet for the past few months, but ultimately the proposal was pushed through. It was heard by the House Finance Committee on May 31 and came to a vote on June 22, passing the 75-member House 53-13, and Pawtucket is now on the the doorstep of keeping the team. This bill took years to put together, but finally lawmakers have a proposal they are happy with. Rhode Island State Representative Carlos Tobon stated, “This took three years of conversation until it was good enough for the people of Rhode Island.”

Getting the votes in both the Senate and the House was a big step, but not the end of the journey for the bill. It now moves on to the Rhode Island executive branch and, if Governor Gina Raimondo approves it as she is expected to do, then it will go as a binding offer on the table to the Pawtucket Red Sox organization to be considered. Representative Tobon discussed the importance of passing this bill: “This enables the city, the organization, and all parties to continue the conversation… The team owners and the city will talk about this and decide if they want to do it.”

With the PawSox having the bill in hand, it comes down to them wanting to stay. They’ve got their proposal, so now lawmakers need them to accept and keep the team at home.

Rhode Island State Representative Mary Messier made it very clear that the General Assembly is determined to keep the organization in Pawtucket. “We are 100% committed [to keeping the team]. It will revitalize Pawtucket, which is much-needed at this time.”

Pawtucket’s economy is in need of a major boost and this proposal might be a spark. Downtown Pawtucket has seen very little growth and it needs something that can add jobs and increase spending in the city. Pawtucket needs the PawSox to stay and continue to boost the city’s economy.

Representative Tobon, who represents Pawtucket, said, “If the PawSox leave and we lose the team, we’d lose out on the rebuild of Pawtucket.”

The current proposal is to build a destination ballpark at the old Apex complex, becoming the catalyst for Pawtucket’s economic rebuild. The term “destination stadium” describes a stadium that serves as more than a place to watch an event, but also could include restaurants, shopping centers and similar facilities — think Patriot Place surrounding Gillette Stadium. As we explained some years ago (motifri.com/pawsox2 “Opinion: Questions Surround the PawSox Sale” by Michael Bilow, Mar 2, 2015), the Buffalo Bisons, current Triple-A affiliate of the Toronto Blue Jays, created the prototype for this kind of “retro-classic” baseball-specific destination stadium. At a reported cost of $42 million, all government money, the Buffalo stadium was built in 1988 and offered patios, beer decks and places to enjoy while the game was being played.

That style stadium was different from the ordinary, cookie-cutter stadium where you spend the whole game sitting on steel bleachers, avoiding spilled beer and looking through obstructed views. Camden Yards, home of the Baltimore Orioles, by the same designer, used the Buffalo model a few years later and, in 1992, the Orioles opened their own destination ballpark featuring all kinds of attractions within the stadium. That has become the prototype for modern sporting venues, and would be a major step up for Pawtucket.

When the PawSox aren’t using the field, it will serve as a public park belonging to the state of Rhode Island and serving to benefit the entire community, with the PawSox being the main tenant.

The city is in the process of integrating a real estate development project that would add more restaurants, retailers, hotels, entertainment venues and office spaces near the park. This proposal would revamp downtown Pawtucket and make it a more inviting tourist location. The new ballpark could be the centerpiece of the new downtown.

The benefits of the new proposal are clear, but financing the project is where struggles arise. The proposal originally stated a cost of $83 million, with $73 million for the park and $10 million in land costs. The PawSox organization will pay $45 million, which would be the largest investment ever made in Pawtucket history. The State of Rhode Island would pay $25 million, and the city of Pawtucket would cover the $10 million in land cost and add $5 million to the stadium project, combining for a total investment of $15 million. The PawSox organization will cover any overrun costs from the project.

Those were the terms of the proposal at least, but the one voted for on the 22nd listed the project cost at $87 million. It is unclear at this point where the extra money came from.

Financing for the project will come through the sale of bonds from the Pawtucket Redevelopment Agency. These bonds are revenue bonds that will be sold via public offering. The Securities and Exchange Commission will certify the interest rates and ensure the bonds are placed at a fair market price. The other major issue with the deal as it stands is the bonds are not currently secured, meaning they are not collateralized: If the project failed, it is hard to say how the bonds will be paid back. In order for tax revenue to secure the bonds, it is generally understood that voters would have to approve issuance of the bonds by referendum, a dubious political prospect; without tax revenue guaranteeing the bonds, investors would perceive substantially increased risk of default and as a result, the interest rate paid to them would have to increase to compensate.

If Governor Raimundo is going to sign the deal, these questions will need to be answered and all remaining issues will need to be resolved.

While Pawtucket is debating how they are going to hang on to the team, others cities are attempting to pry it away. A handful of cities across Massachusetts have shown interest in acquiring the team, with the most passionate being Worcester — which has made itself the primary destination for the organization if they were to leave Rhode Island.

Worcester has a plan in place for the team, but it has only been shared with the Pawtucket Red Sox organization. Their proposal has been negotiated, but nothing has been made public at this point. The question remains whether Worcester actually have a realistic — and politically viable — proposal or if they are just being used by the PawSox to pressure Pawtucket.

Worcester announced a major downtown renovation project that will cost $565 million. With this project already in the works, it is difficult to imagine Worcester financing another $80+ million dollar project. Worcester’s economy is not much better than Pawtucket’s, and until their proposal is made public, it is hard to believe they have a deal that could work. Worcester city officials declined comment at this time.

With a proposal in place, Pawtucket controls the next location of the organization. With the Senate and House already on board, all eyes should be on the executive branch as they work to determine what’s next for the PawSox.