Where the Stone Rolls in PawSox Deal

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So in between all I’ve been doing today, I took a look at the new legislation to authorize debt for a new stadium for the Pawtucket RedSox, and my biggest question is how anybody could say that the state isn’t on the hook for the city’s portion of the debt.  This one piece of legislation authorizes both the $23 million assigned to the state and the $15 million assigned to the city (for $38 million total):

RESOLVED and ENACTED, That the General Assembly hereby authorizes the State to 10 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 …

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 …

Note that both enactments authorize the state to enter into debt.  The difference is that the first portion is “expected to be paid” through state revenues, while the “are to be paid” out of city sources of revenue, including (get this) state aid.  Does anybody believe that the state will stand by hard-nosed while the city struggles to make a payment it can’t afford if the stadium flops?

Moreover, the deal wouldn’t include this multi-step arrangement — with the Pawtucket Redevelopment Agency owning the stadium, which the state leases, which the team leases from the state — if the intent weren’t to rope in all parties.

If this process is going to play out during the summer and fall, the odds are that it will move forward.  Enough insiders want the deal that it will take some unexpected and organized opposition to stop it.  If that opposition doesn’t materialize, let’s hope it’s as sure a thing as the insiders promise, because otherwise all of their assurances — right down to the lie that revenue bonds aren’t really debt obligations of the state, but “moral obligations” — will be worthless.



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