Some news about the $124 million USL soccer stadium that Pawtucket is putting more than $80 million into after being jilted by its minor-league baseball team when Worcester came calling with plans to build a $160 million stadium that looks like a shipping container: It now may not be built at all. And while you might hope that’s because Rhode Island officials came to their senses that trying to pay off $2.1 million a year in construction debt payments with $565,000 a year in tax revenues was a terrible idea, it’s actually more boring reasons like rising interest rates and the private developer partners turning out not to have the money they said they would have:
City officials are hitting the pause button on issuing $27 million in public bonds to help fund the 10,000-seat stadium, saying uncertain financial conditions have so far prevented them from pulling the trigger.
There is currently no timeline for when the deal will close, city officials said.
“The city’s top priority has always been protecting taxpayers,” Pawtucket spokesperson Grace Voll said in a statement, confirming the initial goal was to issue the bonds by February.
“Given the market challenges of the last year, including a global pandemic, rising interest rates, tighter market conditions, and a looming banking crisis, the state financing and private debt components of the capital stack have not made fiscal sense to close to the date,” she added.
That’s a long list of financial things, so let’s break it down a little. Interest rates are indeed soaring, because the Federal Reserve is trying to bring down the price of eggs by getting more people laid off. A bigger problem, though, appears to be that it turns out twin brothers Grant and Brett Johnson, the private developers who are supposed to put $50 million into the project, don’t actually have $50 million: As of last month they were still pitching potential investors on putting money into the project, and they just missed a deadline for ordering $25 million in steel that was needed to have the stadium open by next spring. (The developers issued a statement saying, “Like any startup venture, this project is in a perpetual investor raise,” which was presumably meant to be reassuring.) The Johnsons also have yet to propose what the project’s housing portion would look like, or how it would be paid for.
The Johnsons have put $25 million of their own money into the project, and have broken ground (which, according to WPRI-TV footage, mostly seems to involve moving lots of gravel around), so there is some momentum for something to get built, anyway. But bigger projects have been left started but unfinished, so one never knows. The traditional fallback, in the U.S. anyway, when private partners run short of cash is for the government to bail them out with even more public money, so it’s encouraging that Rhode Island and Pawtucket seem to be slamming on the brakes — it still won’t make up for all the work that has gone into backing this screwy project in the first place, but at least it’s better than throwing good money after bad.