2017 -- H 6366

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LC002951

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2017

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J O I N T   R E S O L U T I O N

A N D A N   A C T

AUTHORIZING THE STATE TO ENTER INTO A FINANCING LEASE AND PAYMENT

AGREEMENTS IN CONNECTION THE CONSTRUCTION OF A BALLPARK IN THE CITY

OF PAWTUCKET

     

     Introduced By: Representatives Messier, Coughlin, Johnston, Tobon, and Barros

     Date Introduced: June 27, 2017

     Referred To: House Finance

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     WHEREAS, McCoy Stadium was constructed 75 years ago in the City of Pawtucket (the

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"City") and has undergone two renovations since that time; and

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     WHEREAS, McCoy Stadium is near the end of its useful life and will not meet the

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standards for Triple-A baseball without major repairs and renovations; and

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     WHEREAS, The estimated cost to repair and renovate McCoy Stadium is approximately

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the same as the cost of constructing a new facility, with no expected catalytic impact on ancillary

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development surrounding McCoy Stadium; and

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     WHEREAS, Pawtucket Red Sox Baseball Club, LLC or an affiliate (the "PawSox") have

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proposed the construction, furnishing and equipping of a new ballpark and related parking in the

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City (the "Ballpark"), which would have playing dimensions similar to those of Fenway Park in

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Boston; and

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     WHEREAS, The Ballpark is anticipated to jumpstart new economic initiatives in the City

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and create new jobs in the State of Rhode Island (the "State"); and

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     WHEREAS, The State and City revenues to be generated by the Ballpark are projected

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by industry experts to be more than sufficient to cover the State's and the City's respective costs

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of financing the Ballpark, infrastructure and land acquisition costs, which shall include all related

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expenses of acquisition by purchase or through eminent domain ("Ballpark and Land Costs"); and

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     WHEREAS, The City is developing a redevelopment plan that contemplates public uses

 

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of the Ballpark and a mixed use real estate development in an adjacent area which may include

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retail, entertainment, restaurant, public park, civic space, hotel, office space and residential

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components as part of a larger redevelopment of downtown Pawtucket (the "Downtown

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Redevelopment Project"); and

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     WHEREAS, The Downtown Redevelopment Project may generate substantial additional

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State and City revenues that far exceed the revenues required to finance public payments on the

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bonds; and

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     WHEREAS, The Pawtucket Redevelopment Agency, established in accordance with

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Chapter 45-31 of the General Laws, will issue revenue bonds to finance the Ballpark and Land

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Costs; and

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     WHEREAS, The Rhode Island Public Corporation Debt Management Act (Rhode Island

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General Laws Section 35-18-1, et seq.) requires the General Assembly to provide its consent to

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the issuance or incurring by the State of certain obligations including financing leases, guarantees

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or other agreements; and

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     WHEREAS, This act shall serve as the concurrent resolution of approval required by the

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Rhode Island Public Corporation Debt Management Act; and

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     WHEREAS, The Ballpark and Land Costs are expected to be approximately

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$83,000,000, excluding financing costs; and

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     WHEREAS, The PawSox, the State and the City intend to share the cost of the Ballpark

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and Land Costs; and

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     WHEREAS, The PawSox propose to contribute $45,000,000, including $12,000,000 in

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up front equity contributions from PawSox owners, and $33,000,000 to be financed by a taxable

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lease revenue bond issued by the Pawtucket Redevelopment Agency (the "Series A Bonds") with

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sublease rental payments to be paid from PawSox rents and annual naming right payments; and

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     WHEREAS, The State proposes to contribute $23,000,000 by the issuance of revenue

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bonds issued by the Pawtucket Redevelopment Agency (the "Series B Bonds") with debt service

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projected to be funded from State taxes, including taxes generated by Ballpark users, visitors, the

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PawSox, and ancillary development, as well as a premium ticket surcharge; and

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     WHEREAS, The City proposes to contribute $15,000,000 by the issuance of revenue

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bonds issued by the Pawtucket Redevelopment Agency (the "Series C Bonds") to be paid from

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incremental real estate property tax, hotel tax, tangible asset tax, food and beverage tax revenues

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and assessments generated in and around the Downtown Redevelopment Project and other City

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revenues and State Aid (as defined herein);

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     NOW THEREFORE, BE IT RESOLVED and ENACTED, That the General Assembly

 

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hereby authorizes the State to enter into a financing lease (the "Lease") with the Pawtucket

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Redevelopment Agency, as lessor, the State as lessee, and the PawSox as sublessee, for the

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purpose of financing the Ballpark, and for costs associated with the Series A Bonds including

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capitalized interest, debt service reserves and costs of issuance. The Lease shall secure Series A

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Bonds, with an amount of net proceeds to finance the Ballpark totaling $33,000,000, excluding

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capitalized interest, debt service reserves and costs of issuance, at an assumed interest rate of four

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percent (4%) and a not to exceed taxable rate of five percent (5%), for a term not to exceed thirty

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(30) years. The Series A Bonds shall be payable from Lease rentals, and the PawSox will make

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sublease rental payments to the State in the same amount, with the PawSox sublease payments

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payable from team rentals and annual naming rights payments; and be it further

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     RESOLVED and ENACTED, That the General Assembly hereby authorizes the State to

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enter into a payment agreement (the "Series B Payment Agreement") with the Pawtucket

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Redevelopment Agency for the purposes of financing the Ballpark and for costs associated with

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the Series B Bonds, including capitalized interest, debt service reserves and costs of issuance. The

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Series B Bonds will be issued on a tax-exempt basis if permitted by federal tax law, and may be

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issued in one or more sub-series. The Series B Payment Agreement shall secure the Series B

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Bonds with an amount of net proceeds to finance the Ballpark totaling $23,000,000, excluding

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capitalized interest, debt service reserves and costs of issuance, at an assumed interest rate of four

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percent (4%) and a not to exceed taxable rate of five percent (5%) for a term not to exceed thirty

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(30) years. The State's obligations under the Series B Payment Agreement are expected to be paid

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from state revenues generated by Ballpark users, visitors, the team, and ancillary development, as

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well as a premium ticket surcharge; and be it further

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     RESOLVED and ENACTED, That the General Assembly hereby authorizes the State to

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enter into a payment agreement (the "Series C Payment Agreement") with the Pawtucket

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Redevelopment Agency and the City for the purposes of financing the Ballpark and Land Costs,

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including land acquired for ancillary development for the Downtown Redevelopment Project and

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related infrastructure and for costs associated with the Series C Bonds, including capitalized

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interest, debt service reserves and costs of issuance. The Series C Bonds will be issued on a tax-

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exempt basis if permitted by federal tax law, and may be issued in one or more sub-series. The

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Series C Payment Agreement shall secure the Series C Bonds with an amount of net proceeds to

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finance the Ballpark and Land Costs totaling $15,000,000, excluding capitalized interest, debt

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service reserves and costs of issuance, at an assumed interest rate of four percent (4%) and a not

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to exceed taxable rate of five percent (5%) for a term not to exceed thirty (30) years. The City's

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obligations under the Series C Payment Agreement are to be paid from incremental real estate

 

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property tax, hotel tax, tangible asset tax, food and beverage tax revenues and assessments

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generated in and around the Downtown Redevelopment Project, donations, and from such other

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City revenues, including, but not limited to State Aid, which State Aid shall be pledged by the

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City in an amount sufficient to fully cover debt service on the Series C Bonds. "State Aid" means

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the funds made available to the City (i) as state aid pursuant to chapter 45-13 of the general laws,

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but specifically excluding reimbursements to cities and towns for the cost of state mandates

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pursuant to section 45-13-9; (ii) in replacement of motor vehicle and trailer excise taxes pursuant

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to chapter 44-34 of the general laws; and (iii) from the public service corporation tax pursuant to

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chapter 44-13 of the general laws. The General Assembly hereby authorizes the City to pledge

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such State Aid and other City revenues to the payment of the City's obligations to the State under

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the Series C Payment Agreement in order to further secure the Series C Bonds, and said pledge

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shall be a condition precedent to the State's execution of the Series C Payment Agreement; and be

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it further

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     RESOLVED and ENACTED, That the Pawtucket Redevelopment Agency shall request

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the Governor to include in the State budget for each of the fiscal years during which any Series A

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Bonds are outstanding, amounts equal to the projected annual rentals due under the Lease

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securing the Series A Bonds; and be it further

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     RESOLVED and ENACTED, That the Pawtucket Redevelopment Agency shall request

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the Governor to include in the State budget for each of the fiscal years during which any Series B

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Bonds or any Series C Bonds are outstanding, amounts equal to the projected annual debt service

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on the Series B Bonds and Series C Bonds; and be it further

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     RESOLVED and ENACTED, That the State Director of the Department of

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Administration and the Governor shall enter into, execute, and deliver the Series B Payment

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Agreement and Series C Payment Agreement (collectively, the "Payment Agreements") setting

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forth or otherwise determining the mechanisms, terms, conditions, and procedures for submission

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of appropriation requests to assure repayment of the Series B Bonds and the Series C Bonds, and

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the amount, timing, and manner of payment of all amounts available from the State to the

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Pawtucket Redevelopment Agency for repayment of the Series B Bonds and the Series C Bonds.

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The Payment Agreements may include such covenants and undertakings of the State as the State

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Director of the Department of Administration and the Governor deem reasonable, including,

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without limitation, provisions requiring the Department of Administration and the Governor to

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include in each annual or supplemental proposed budget of revenues and appropriations

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submitted to the General Assembly for any fiscal year during which any Series B Bonds or Series

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C Bonds are outstanding the amount required for the payment of the projected annual debt service

 

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on the Series B Bonds and the Series C Bonds; and be it further

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     RESOLVED and ENACTED, That none of the Series A Bonds, the Series B Bonds or

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the Series C Bonds, nor the Lease, nor the Payment Agreements shall constitute indebtedness of

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the State or any of its subdivisions or a debt for which the full faith and credit of the State or any

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of its subdivisions is pledged except to the extent that the State appropriates funds for the rentals

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securing the Series A Bonds, or appropriates funds for the Payment Agreements securing the

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Series B Bonds and the Series C Bonds; and be it further

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     RESOLVED and ENACTED, That this Joint Resolution and Act shall take effect

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immediately upon its passage by the General Assembly.

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LC002951

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