McKee made his brief comments as he left a private Rhode Island Commerce Corporation session.
The Commerce Corporation, chaired by McKee, is currently reviewing a request from the town of Pawtucket and the developer to inject an additional $30 million to help bring the project to fruition after cost overruns were blamed on inflation. The company did it almost entirely behind closed doors, including Wednesday’s session.
Commerce board member Vanessa Toledo said afterward that the board had discussed the deal and talked about it in detail, including everyone’s shared belief in having an investment in Pawtucket and this. area in particular.
“At this point, I think we’re discussing all the options,” Toledo said.
When the funding deal was first announced in February 2021, the first phase of the project was expected to cost $284 million, which would include the stadium itself, housing, commercial, residential and retail space at the detail, as well as other improvements in the area.
That cost has now climbed to a total of $344 million, according to Dylan Zelazo, chief administrative officer for the town of Pawtucket. Of that increase, more than $40 million is the stadium itself, rising from about $83 million to $124 million.
The developer, Fortuitous Partners, founded by Brett Johnson, a Brown University graduate and owner of lower-tier English soccer team Ipswich Town, has already injected an additional $25 million in private equity and $31 million in private debt investment to help fill the shortfall. , say the city and the promoter.
This still leaves a significant void that the city and developer are asking the state to fill. It could mean the deal would break with previous assurances that public partners — the state and the city — wouldn’t have to step in if there were cost overruns. It could also mean direct public funding for the stadium itself, which the parties have previously stressed would not be the case, with public funds only going to associated infrastructure.
For Zelazo and Pawtucket town officials, the alternative would mean the deal would fall apart.
“We have to make this a success for Rhode Island and Pawtucket,” Zelazo said.
Under previous terms of the agreement, the state of Rhode Island and the city would provide what’s called tax increment funding totaling $36.2 million for costs around the stadium, but not the stadium itself. -same. A TIF, as it is called, would involve the state and city borrowing money and then repaying those bonds with revenue generated from the project. The city envisions transformational development, with football fans filling the 10,000-seat USL Championship Stadium, eating in restaurants and shopping in stores.
Work on the site is already underway.
The developer could also get $10 million net in tax credits to rebuild Rhode Island, bringing total public funding for the project to about $46.2 million when announced in February 2021.
The additional $30 million the city hopes the state will approve would come from adding to the tax increase funding — in other words, borrowing more and paying it back from revenue generated by the area. The Commerce Corporation said it was evaluating different options, but another board member previously called the request “great”.
The city itself, Zelazo said, has also contributed more in recent months: In December 2021, the city reached a tax stabilization agreement for the stadium, which would be privately owned. Tax stabilization agreements are agreements in which the promoter of a complex project agrees to pay a certain amount in property taxes over a certain number of years, generally considerably less than what it would have been assessed. under normal circumstances.
That certain amount for the Tidewater Landing stadium is $0 over 20 years, a deal that Zelazo says would save the developer tens of millions in taxes, further adding to the incentives for building the stadium.