'It's paying for itself': Batista addresses current Polar Park finances

WORCESTER — In a presentation before the City Council's Standing Committee on Finance Tuesday, City Manager Eric Batista and city officials said Polar Park's District Improvement Financing is on track to raise revenue over 30 years following the publication of a skeptical economic study and some questions from city councilors.

"Right now I can't speak for the future - 10, 20 years," Batista said. "What I can speak for is based on our projections and based on what we are seeing right now, it's paying for itself."

By the end of the 30-year lifespan of the District Improvement Financing (DIF), the city projects over $50 million being returned to the general fund.

The city borrowed about nearly $146 million to pay for construction and has to pay back that debt over 30 years.

In May, Robert W. Baumann, a Holy Cross professor of economics, and John Charles Bradbury, a professor at Kennesaw State University in Georgia published a study looking at the model the city commissioned to assess the finances of the ballpark.

Based on their analysis of that model, they found the ballpark could produce between a $40 to $60 million deficit when taking into account reasonable assumptions.

Seeking transparency

During the May 23 City Council meeting, some councilors asked for more transparency on ballpark management, finances and the planning of community events at Polar Park.

When asked about headlines around the ballpark's finances by District 3 City Councilor George Russell, Timothy McGourthy, the city's chief financial officer, said the economic study used data from 2018, when the pro forma model was provided, and did not include some of the planned developments and other contributing factors that came onto the district in the following years.

"It focused on that economic analysis which had a 2018 view of the world," McGourthy said. "It wasn't necessarily looking at the city's financial returns specifically as it relates to the DIF as it is today."

A few projects in the ballpark district are scheduled to finish by the end of 2024, Batista said.

The city manager said the first of developer Madison Properties' residential buildings will be finished this year and Boston Capital's apartment project at the former Table Talk Pies factory and the construction of Spruce Street, the Cove apartment project at the former Sir Morgan's Cove would be done by 2024.

The Left Field Building, a mixed-use space next to the ballpark; Madison Properties' proposed hotel; its second residential project; Quarterra Multifamily Communities' planned apartment project; planned lofts at 153 Green St. and a lab building are slated for after 2024.

McGourthy said the city issued six bonds between 2018 and 2022 that totaled almost $146 million to pay for the ballpark and DIF obligations. The bonds each have a 30-year debt service obligation and are planned to be paid out by 2051.

Early going

The city projects the early years to be the hardest years for the ballpark, McGourthy said, with money going out exceeding money coming in between the years of 2020 and 2022. A $3-million property sale from 2021, where the proceeds were placed into the DIF reserve, carried the ballpark through those rough years, the city CFO said.

McGourthy said the DIF reserve should begin to grow in the coming years as new projects come underway and additional revenue streams are activated. He said fiscal 2024 is expected to be the tightest year as it will be before they can collect revenue from some of the new developments, expenses are also expected to outpace revenues this fiscal year.

According to city figures, the reserve started fiscal 2023 with $2.7 million. The district made around $3.4 million in revenue and paid $5.2 million in debt service expenses. At the end of fiscal 2023, the city projected about $954,487 in the reserve.

For fiscal 2024, the city projects revenues of about $5.5 million and debt service expenses of about $6.2 million leaving around $310,179 in the reserve.

Batista said the ballpark has also brought on several public improvements in the district: the redesign of Kelley Square, the construction of a 350-space parking garage operated by Madison Properties and the WooSox, lights added to the tunnel connecting Green Street and Franklin Street and new green space at Rockland Trust Plaza.

If the administration felt at any point that Polar Park was not paying for itself, Batista said the City Council and public would be aware.

"We would be required to come to you with an appropriation of additional tax levy from anywhere in the general fund to move into this DIF reserve to cover any cost," Batista said.

This article originally appeared on Telegram & Gazette: Worcester officials detail Polar Park finances