EXCLUSIVE: Cost of Pawtucket Soccer Stadium Borrowing Explodes, Bonds Scheduled to Close Today
Thursday, February 08, 2024
The cost of public borrowing for Tidewater Landing, the minor league soccer stadium in Pawtucket, has exploded. The Pawtucket bonds that are expected to close Thursday to cover the $27 million of funding will now cost $54,285,000 in borrowing.
The costs have increased by more than $5 million in less than three months.
The stadium is the pet project of Pawtucket Mayor Don Grebien, Governor Dan McKee and the Laborers International Union.
GET THE LATEST BREAKING NEWS HERE -- SIGN UP FOR GOLOCAL FREE DAILY EBLASTIn November, GoLocal secured a copy of the preliminary bond documents and reported:
The City of Pawtucket is poised to borrow $48,450,000 to fund a minor league soccer stadium. Under the financing scheme, Pawtucket will not own the stadium -- it will be owned by a group led by California-based businessman Brett Johnson.
GoLocal has secured a copy of the final bond documents for the Tidewater Landing, and these documents unveil how the risk of the bonds are characterized, the bond’s ratings, and the cost to taxpayers — which have dramatically increased in just the past few months.
Under ‘Risk Factors” investors are warned, “No rating has been applied for from any rating service…there can be no assurance that such a rating will be obtained, in any specific rating category or at all.”
Further, another portion of the 332-page document states that there is “no assurance regarding the financial condition of the parties,” including the developer and Fortuitous, Brett Johnson’s firm.
Rhode Island taxpayers are pouring tens of millions of dollars into the stadium and will have no ownership in the property and there are major gaps in ensuring that a team plays in the facility if this investor team fails.
Who is Investing and How Much?
According to the use of Estimated Sources and Funds, the stadium owners -- Brett Johnson and his team -- are investing $43 million of the total cost, which exceeds $128 million.
The costs to Rhode Island and Pawtucket taxpayers exceed $64 million -- the $54,285,000 million in bond funds and a $10 million appropriation from the city of Pawtucket.
Underwriters Receive a Mega-fee
Another big winner in the financing scheme are the underwriters to the bonds -- Stifel and Citigroup.
Those two firms split a fee of nearly $6 million and this does not include other legal fees incurred by the city of Pawtucket or the state of Rhode Island.
The stadium is scheduled to be completed for the 2025 season.
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