2017 -- S 0989

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LC002857

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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: Senators Conley, Nesselbush, Crowley, and Doyle

     Date Introduced: June 27, 2017

     Referred To: Senate Finance

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

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

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

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

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

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

development surrounding McCoy Stadium; and

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

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

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

Boston; and

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

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

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

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

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

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

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

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

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

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

Redevelopment Project"); and

     WHEREAS, The Downtown Redevelopment Project may generate substantial additional

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

bonds; and

     WHEREAS, The Pawtucket Redevelopment Agency, established in accordance with

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

Costs; and

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

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

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

or other agreements; and

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

Rhode Island Public Corporation Debt Management Act; and

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

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

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

and Land Costs; and

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

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

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

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

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

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

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

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

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

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

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

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

revenues and State Aid (as defined herein);

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

well as a premium ticket surcharge; and be it further

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

it further

     RESOLVED and ENACTED, That the Pawtucket Redevelopment Agency shall request

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

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

securing the Series A Bonds; and be it further

     RESOLVED and ENACTED, That the Pawtucket Redevelopment Agency shall request

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

immediately upon its passage by the General Assembly.

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LC002857

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