Polar Park: Still Do Not Own The Land

Development Projects Around The Ballpark Agreements???

Link to the agreement

From Pages Page 7 & 8

Pro Forma Overview:

The construction of the ballpark is designed to be self-supporting. The City will create a District Improvement Financing (DIF) area around the ballpark to capture new revenue created by the project. New revenue within the boundaries of the DIF will be used to pay back the bond. For example, the City’s Pro Forma calculates the following new revenue for year 2022, the first year of full debt service payments: 

Sources Amount 
Ballpark Taxes $ 147,167.00 
Parking Revenue $ 845,650.00 
LF Boutique Hotel & Retail Taxes $ 313,060.00 
WG South Hotel, Apartments & Retail Taxes $ 1,628,067.00 
Personal Property Tax $ 11,526.00 
Use and Occupancy Tax $ 571,388.00 
Advertising $ 156,000.00 
8 City Revenue Events $ 40,000.00 
 Source Total $ 3,712,858.00 

Uses Amount 
Debt Service $ 2,733,000.00 
Operating Costs $ 96,920.00 
5% contingency $ 141,496.00 
 Use Total $ 2,971,416.00 

Surplus $ 741,442.0

In 2022, the City will owe $2,971,416 towards the bond payment and operating costs for the ballpark. Therefore, in 2022, the City is estimating a surplus of $741,442 which includes a 5% contingency. (The sources and uses will fluctuate from year to year.)

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Fiscal 2022 runs from July 2021 thru June 2022.
In other words it starts less then 24 months from today.

We feel the park will be down in time and can only assume that the projected revenues for the ballpark will be realized:

  1. Ball park taxes  147,167
  2. Advertising    156,000
  3. 8 City Revenue Events   40,000
  4. Parking Revenues    845,650
Total     1,188,817

The rest of the revenues are dependent on an awful lot of private developments over the next 24 months.   
  1. Hotel & Retail taxes    313,060
  2. Hotel, Apartment & Retail taxes    1,628,067
  3. Personal Property tax     11,526.00
  4. Use and occupancy tax     571,388
Total 2,524,041

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How are we doing on the public-private partnership agreements for the development projects around the ballpark.

Stay tuned...  





Comments

Unknown said…
I'm just curious if you counted the new revenue from the commercial building being built right next to the park. Also, I'm also worried about the two proposed hotels. The new one planned at Washington Square and maybe one at the Mt.Carmel site might be all our market can absorb. The GM at the new AC Marriott Hotel at Citysquare has stated that the occupancy rates so far have been disappointing. Most middle-class families have a limited budget for entertainment. I worry that the ballpark would take away business from the Hanover, Braveheart’s, shows at the Palladium and maybe Mechanics Hall. Hopefully,everything will work as planned, but some things are still up in the air.
Bill Randell said…
We copies the numbers from the report submitted to City Council note the link and page 7 & 8. These numbers were the projected numbers for the development around the new park. These are prtty big projections and we are less then 24 months away.
Common Sense said…
Hi Bill. What's your take on the many comprehensive studies that conclude that new ballparks really don't have a significant effect on the surrounding areas? I remember reading one that concluded their effect is about the same as a new Walmart store.
Bill Randell said…
Common Sense: It really make no sense to spend time on that since the project has already been approved. Our concerns now are that the projected revenues actually become a reality or the taxpayers will need to make up for the shortages. July 1st, 2021 is not that far away....
Common Sense said…
I don't think there is an out for the city (in the contract) if the projections don't measure up. So, considering that why talk about any revenue shortfalls. We're stuck with it either way. Economic spin-off might be a concern for someone that is going to invest $500,000 to open a bar or restaurant in the Canal District (based on the rosy predictions by the city or developers).
Victor Matheson said…
Victor Matheson here. I am a Holy Cross economics professor and nationally known as a leading critic of stadium subsidies. Just a couple of thoughts:

First, I am fairly bullish on Worcester and think that it is reasonably likely that the tax revenues generated in the neighborhood will be sufficient to cover the bond payments.

That being said, being able to cover your bills is not the same thing as being a sound investment. Kelley Sq. was rapidly gentrifying before the stadium, and therefore there is no reason to believe that the stadium is causing economic development in the area but is instead simply occurring at the same time. Furthermore, there is reason to believe that the stadium district will cannibalize business from other areas of the city. A person who goes to a new restaurant in the ballpark district instead of a restaurant on Shrewbury St. or downtown, or an out-of-towner who stays in one of the new hotels instead of another hotel in the city is down having their entire tax bill going to the stadium instead of the city.

Similarly, all of the residents of any new housing in the neighborhood are dedicating their property taxes towards the stadium instead of streets, police, fire, schools, etc. All of those apartment taxes that usually go towards providing services to the people who live there are now going to pad the pockets of the WooSox owners, millionaires and billionaires who didn't want to pay the full cost of running their own for-profit business. Instead, those services will be paid for by the residents in the rest of the city.

So again, the question of whether the city will be able to pay for their $75 million handout is a completely different one than whether the city should have just given $75 million to a group of mega-rich out-of-town businessmen.
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