Rhode Island's Senate finance committee Tuesday night overwhelmingly approved an $83 million financing package for a minor-league baseball park in Pawtucket to replace 75-year-old McCoy Stadium.

Nicholas Kettle, R-Coventry, cast the lone no vote as the bill moves to the full Senate, which could hold a vote next Tuesday. Its fate in the House of Representatives is unclear.

Artist's rendering of proposed Ballpark at Slater Mill. City of Pawtucket

The Pawtucket Red Sox, known locally as the "PawSox" and a Class AAA affiliate of the Boston Red Sox, want to build a 10,000-seat park and develop prime real estate adjacent to the stadium, on the site of the former Apex department store and nearby properties in the 71,000-population city along the Blackstone River, five miles north of capital city Providence.

Few people spoke at Tuesday's hearing in Room 313 of the state capitol.

The estimated cost is $83 million. Team owners would kick in $45 million -- $12 million in cash up front and $33 million through Series A bonds -- while the state and city would account for $23 million and $15 million through Series B and Series C bonds, respectively.

Revisions to the Pawtucket stadium bill, which the Senate finance panel made last year, included an increase of the city's share of naming-rights revenues to 50% of an estimated $250,000; the transfer of premium ticket surcharge revenue from the state to the city; and the use of $12 million in equity team owners have pledged as the initial funds toward construction costs.

The PawSox would absorb cost overruns while the team, city and state would split any savings.

Proponents, including the Senate's main sponsors, said called the deal sound and a needed economic boost to Pawtucket.

While the city has improved financially over the past few years -- its bond rating has risen from junk to A -- it received a blow in October when Care New England Health System announced it would close Memorial Hospital. In addition, toymaker Hasbro Inc. is weighing a move out of the city.

"We have lost a hospital. We do not want to lose the Red Sox," said state Sen. Elizabeth Crowley, D-Central Falls, whose district includes neighboring Pawtucket. She and Sen. Donna Nesselbush, D-Pawtucket, spoke in favor of the bill.

Ballpark supporters fear the team could relocate to Worcester, Mass.

Opponents said the financing component resembled moral-obligation debt akin to the failed 38 Studios deal that left the state stranded with debt that it backed,

Retired baseball pitcher Curt Schilling's video-game company 38 Studios received a $75 million loan in 2010 to move to downtown Providence from Maynard, Mass. The company filed bankruptcy and folded, leaving the state holding the bag.

Randall Rose from the advocacy group Operation Clean Government said moral obligation bonds enable supporters of pet projects to circumvent state referendum requirements for bond issuances.

"Moral obligation bonds are not a good way of borrowing money," Rose said Tuesday, citing higher interest rates. "They tend to be dubious prospects from a financial standpoint."

Committee Chairman William Conley, D-East Providence, said the bonds are essentially revenue and appropriation bonds, not moral obligation, with Series C essentially a contingency,

"As such they give us essentially a better rate when they go to the market," he said. "None of these Series A, B or C bonds are moral obligation. That testimony represents a misunderstanding of the structure of the financing for the project."

Subscribe Now

Independent and authoritative analysis and perspective for the bond buying industry.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.
Paul Burton

Paul Burton

Paul Burton is the Northeast Regional Editor for The Bond Buyer and the author of the book "Tales from the Newsrooms." He is a sought-after public speaker and has appeared on radio and TV shows, including former CBS News White House correspondent Sharyl Attkisson’s public-affairs program, “Full Measure.”