2017 -- S 0989 SUBSTITUTE A

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LC002857/SUB A

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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 AND A N   A C T

AUTHORIZING THE STATE TO ENTER INTO FINANCING LEASE AND PAYMENT

AGREEMENTS IN CONNECTION WITH 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" or the

"Team") has proposed the constructing, 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 downtown area of the City has been economically depressed and has

seen very limited new infrastructure, development, or investment in decades; and

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

and in the Blackstone Valley and create new jobs in the State of Rhode Island (the "State"); 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 Ballpark will operate and be utilized as a public park and will create

public recreational, social, and communal benefits; and

     WHEREAS, The Pawtucket Redevelopment Agency (the "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 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 Downtown Redevelopment Project may generate additional State and

City revenues that exceed the revenues required to finance public payments on the bonds; 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

upfront equity contributions from PawSox owners to the total project cost, which equity

contributions shall be the first funds expended toward the construction project, and $33,000,000

to be financed by lease revenue bonds issued by the Agency (the "Series A Bonds"), with the debt

service payments on the Series A Bonds to be paid from sublease rental payments by the PawSox

supported by rents, fifty percent (50%) of annual naming right payments, and any and all other

sources in order to cover the Team's absolute and unconditional obligation on the Series A Bonds;

and

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

bonds issued by the Agency (the "Series B Bonds"), with the debt service payments on the Series

B Bonds to be paid from the State's revenues, which are expected to include taxes generated by

Ballpark users, visitors, the PawSox, and ancillary development subject to annual appropriation

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of such amounts by the General Assembly; and

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

bonds issued by the Agency (the "Series C Bonds"), with the debt service payments on the Series

C Bonds to be paid from the City's revenues, which are expected to include 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, premium ticket surcharge, fifty

percent (50%) of annual naming right payments, and State Aid (as defined herein). "Ticket"

means any physical, electronic, or other form of certificate, document, or token showing that a

fare, admission, or license fee for a right to enter the ballpark has been paid; and

     WHEREAS, Any cost savings will be shared pro rata among the Team, the State, and the

City. In the event that the actual construction and land acquisition costs are less than the projected

$83,000,000 or in the event that not all of the bond proceeds are used to carry out the specified

project, any unused bond proceeds shall be used to pay the debt service on the Series A, B, and C

Bonds in a pro rata share as follows: 46.5% of the cost savings or unused bond proceeds to the

debt service of the Series A Bonds, 32.4% to the debt service of the Series B Bonds, and 21.l% to

the debt service of the Series C Bonds; and

     WHEREAS, In the event that the actual construction and land acquisition costs of the

projects exceed the projected $83,000,000, the Team will solely be responsible for those cost

overruns. In no event, shall the State be obligated to pay more than a principal amount of

$23,000,000 for Ballpark and Lands Costs. In no event, shall the City be obligated to pay more

than a principal amount of $15,000,000 for Ballpark and Land costs; and

     WHEREAS, Energy costs for public buildings are skyrocketing and will likely continue

to increase; energy use by public buildings contributes substantially to the problems of pollution

and global warming; public buildings can be built and renovated using high-performance methods

that save energy, reduce water consumption, improve indoor air quality, preserve the

environment, and make workers and students more productive; and

     WHEREAS, The use of green and sustainable infrastructure in the development and

construction of the Ballpark will address stormwater runoff and reduce flooding, reduce pollutant

levels in nearby waterways, and may reduce long-term operating costs of the Ballpark; and

     WHEREAS, The Agency will purchase and own the Ballpark; and

     WHEREAS, The Agency will lease the Ballpark to the State; and

     WHEREAS, The State will not be a tenant of or occupy the Ballpark, and instead will

sublease the Ballpark to the PawSox; and

     WHEREAS, The lease for the proposed Ballpark has not yet been drafted, but shall be

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negotiated and executed forthwith upon passage of this joint resolution; and

     WHEREAS, The General Assembly has determined that certain provisions and

conditions shall be present in the lease; and

     WHEREAS, Any person working at the Ballpark during the planning, construction, or

operational phases, including, but not limited to concessions, the box office, or custodial services,

shall be employed with the protections of both federal and state labor standards, including fair

pay, health and safety, anti-discrimination, and provisions that prevent labor misclassification by

incorrectly designating workers as "independent contractors"; and

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

hereby finds that the finance, construction, and development of a Ballpark in the City of

Pawtucket to be used primarily as a venue for Minor League Baseball and also as a public park,

as well as the redevelopment of the surrounding depressed neighborhood, are public uses that are

in the interest of, and for benefit of, the citizens of the State of Rhode Island, and will contribute

substantially to the social and economic well-being of the citizens of the State and significantly

enhance the economic development and employment opportunities within the City and the State;

and be it further

     RESOLVED and ENACTED, That the General Assembly hereby finds and declares that

government support in facilitating the presence of Minor League Baseball and the development of

a public park in the City provides to the State and its citizens highly-valued intangible benefits

that increase the quality of life and civic relationships of their citizens; and be it further

     RESOLVED and ENACTED, That the General Assembly hereby finds and declares that

the expenditure of public money for these purposes is necessary and serves a public purpose; and

be it further

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

enter into a financing lease (the "Lease") with the 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

Series A Bonds may be issued on a tax-exempt or taxable basis or any combination thereof, and

may be issued in one or more sub-series. The aggregate principal amount of the Series A Bonds

shall be not more than $41,000,000 including financing costs. Total annual debt service payments

on the Series A Bonds will be not more than $2,800,000 over a repayment period of not more

than thirty (30) years. The PawSox shall make sublease payments to the State under the Lease in

an amount not less than the total annual debt service payment on the Series A Bonds, with the

PawSox sublease payments to be paid from team rentals, fifty percent (50%) of annual naming

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rights payments, and any and all other sources in order to cover the Team's absolute and

unconditional obligation on the Series A Bonds; 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 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 may be

issued on a tax-exempt or taxable basis or any combination thereof, and may be issued in one or

more sub-series. The aggregate principal amount of the Series B Bonds shall be not more than

$26,000,000 including financing costs. Total annual debt service payments on the Series B Bonds

will be not more than $1,800,000 over a repayment period of not more than thirty (30) years. The

State's maximum possible financial obligation relating to the Series B Payment Agreement shall

be its payments under such agreement, which shall be in an amount sufficient to pay the debt

service on the Series B Bonds. Such payments are to be made from the State's revenues which are

expected to include taxes generated by Ballpark users, visitors, the PawSox, and ancillary

development; 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 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 may be issued on a tax-exempt or taxable basis or any

combination thereof, and may be issued in one or more sub-series. The aggregate principal

amount of the Series C Bonds shall be not more than $18,000,000 including financing costs. Total

annual debt service payments on the Series C Bonds will be not more than $1,400,000 over a

repayment period of a not more than thirty (30) years. The City's payments under the Series C

Payment Agreement shall be in an amount sufficient to pay the debt service on the Series C

Bonds. Such payments are to be made from the City's revenues, which are expected to include

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 from such

other City revenues, including, but not limited to, premium ticket surcharge, fifty percent (50%)

of annual naming right payments, and 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

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

chapter 44-34.1 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 Governor shall include in the proposed State

budget for each of the fiscal years during which any Series A Bonds are outstanding, amounts

equal to the projected annual rental payments due under the Lease securing the Series A Bonds.

The State's maximum possible financial obligation relating to the Lease shall not exceed the

amount sufficient to pay the debt service payments on the Series A Bonds; and be it further

     RESOLVED and ENACTED, That the Governor shall include in the proposed 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 payments 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 Lease setting forth or

otherwise determining the mechanisms, terms, conditions, and procedures for submission of

appropriation requests for the purpose of making the State's rental payments under the Lease

securing the Series A Bonds, and the amount, timing, and manner of payment of all amounts

available from the State to the Agency for such rental payments. The Lease 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 A Bonds are outstanding the amount required for rental payments;

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 Agency

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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. The State's maximum possible financial obligation relating to the Series C

Payment Agreement shall not exceed the amount sufficient to pay the debt service on the Series C

Bonds; and be it further

     RESOLVED and ENACTED, That one hundred percent (100%) of available bond

proceeds must be spent on qualifying purposes within five (5) years of the date of issue, and that

a binding commitment shall be made to spend at least ten percent (10%) of such proceeds within

ten (10) months of the issue date. If project proceeds are not spent within five (5) years of the

issue date, the unused proceeds must be applied to redeem bonds within ninety (90) days; and be

it further

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

Series C Bonds, the Lease, or 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. The State's obligation to make rental payments under the Lease and to

make payments under the Payment Agreements shall be subject to the annual appropriations of

funds, if any, made available and appropriated by the General Assembly of the State for such

purpose; and be it further

     RESOLVED and ENACTED, That the General Assembly, encourages (i) the use of

green and sustainable building materials, techniques and standards, including those enacted by the

General Assembly in the Rhode Island Green Buildings Act, and (ii) the use of highly efficient

energy systems, the use of water conservation measures, and the potential use of on-site

renewable energy generation in the development and construction of the Ballpark; and be it

further

     RESOLVED and ENACTED, That in furtherance of building an energy efficient and

sustainable Ballpark, the General Assembly encourages the use of financing programs available

through Rhode Island Infrastructure Bank, including, to the extent practicable, the State

Revolving Funds and the Efficient Buildings Fund, which provide low-cost financing for eligible

renewable and energy efficiency, stormwater abatement, water conservation, and other

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sustainable infrastructure projects; and be it further

     RESOLVED and ENACTED, That the Lease securing the Series A Bonds shall be

negotiated and executed forthwith upon the passage of this joint resolution and such Lease shall

include, but shall not be limited to, the following terms:

     (1) The lease period shall be for a term not fewer than thirty (30) years, which term shall

commence upon the completion of the construction of the Ballpark and shall not be subject to any

escape clause;

     (2) The Team shall be responsible for the daily operational maintenance of the Ballpark,

including, but not limited to, keeping the facility in good condition and repair, maintaining the

office areas, furnishings, fixtures, and equipment, and maintaining the general cleanliness of the

Ballpark, and shall be responsible for the financial costs associated with such maintenance;·

     (3) The City shall provide planning and operational assistance with respect to the "public

park" aspect of the Ballpark, which will operate year-round in and around the Ballpark separate

and apart from the Ballpark's baseball-related uses;

     (4) The State shall have no legal obligation for the operational maintenance of the

Ballpark or public park area;

     (5) The Team shall be responsible for a minimum of fifty percent (50%) of the costs of

annual capital expenditures for structural repairs including, but not limited to, repairs and

improvements to the roof and exterior walls of the facility, protective coatings, ramps, plumbing,

and all repairs, replacements, and improvements, whether capital or ordinary, needed to preserve

the Ballpark. The parties shall establish and maintain a Ballpark capital reserve fund for the long-

term capital needs of the Ballpark to ensure that the Ballpark remains a first class AAA minor

league facility and an asset to the Agency and the surrounding community for the term of the

lease and sublease. The parties shall contribute a minimum of $150,000 per year in total to the

fund for use to finance capital expenditures. The Team shall contribute a minimum of $75,000 of

the $150,000. Under no condition, shall monies in the Ballpark capital reserve fund be utilized for

operational maintenance of the Ballpark or public park. The parties shall jointly develop a capital

reserve plan between every two (2) to five (5) years, which plan shall include directives to the

parties to make contributions to the Ballpark capital reserve fund in order to carry out the capital

improvements set forth in the plan.

     (6) The Team shall be solely responsible for any costs of construction that exceed the

projected $83,000,000 total project and land cost·

     (7) Any cost savings shall be shared among the Team, the State, and the City on a pro

rata basis. In the event that the actual total construction and land costs are less than the projected

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$83,000,000 or in the event that not all of the bond proceeds are needed to complete the specified

project, any unused bond proceeds shall be used to pay the debt service on the Series A, B, and C

Bonds as follows: 46.5% of the cost savings or unused bond proceeds to the debt service of the

Series A Bonds, 32.4% to the debt service of the Series B Bonds and 21.1% to the debt service of

the Series C Bonds.

     (8) Members of the Team ownership shall develop independently, or with partners,

secure the development of a minimum of 50,000 square feet of real estate on the Ballpark site or

in the ancillary redevelopment area, without seeking public tax subsidy offsets, and which

development shall align contemporaneously with the construction of the Ballpark. Failure to

reach substantial completion of 50,000 square feet of real estate at the time of the opening of the

Ballpark will require payment by the Team to the City in an amount of two hundred seventy-five

dollars ($275) per day until such time as a level of substantial completion is reached;

     (9) Advance ticket prices for children, senior citizens, and general admission will not

increase from the cost of those tickets in the 2017 regular and post-season for a minimum period

of five (5) years from the opening of the Ballpark; and be it further

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

the Series C Bonds shall issue until such time as the Lease securing the Series A Bonds is

approved by the State Properties Committee; and be it further

     RESOLVED and ENACTED, That any person working at the Ballpark during the

planning, construction, or operational phases, including, but not limited to, concessions, the box

office, or custodial services, shall be employed with the protections of both federal and state labor

standards, including fair pay, health and safety, anti-discrimination, and provisions that prevent

labor misclassification by incorrectly designating workers as "independent contractors"; 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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