Pawtucket, Rhode Island, preps unrated deal for new minor league soccer stadium project

The city of Pawtucket, Rhode Island, lost its minor league baseball team, the PawSox — the triple-A affiliate of the Boston Red Sox — back in 2021 after an affiliation of more than 45 years.

The team moved to nearby Worcester, Massachusetts, after Pawtucket couldn’t manage to put a deal together to build a new stadium.

After some private funding delays, a city agency is set to move forward a financing to welcome a new minor league professional soccer team and help build its stadium, a portion of which will be funded by municipals.

The Pawtucket Redevelopment Agency is set to bring $48.45 million of designated baseline taxes appropriation revenue bonds (Tidewater Landing Phase 1A Project Series 2023A) as part of a $400 million project to build a stadium for a new minor league professional soccer team, to be called Rhode Island FC.

The bond issue — which is unrated — is scheduled to be priced Tuesday in a syndicate led by Stifel, Nicolaus & Co. Inc. and Citigroup Global Markets Inc. The proceeds from the bond issue, which includes $16.3 million of 20-year bonds and $32.2 million of 30-year bonds, represent the city’s financial investment in the project. The balance is being privately financed.

The Tidewater Landing project, situated on both sides of the city’s waterfront, is said to be the largest development project in Pawtucket’s history. In addition to the 10,000-seat stadium, the project calls for hundreds of thousands of square feet of residential and retail development, including an indoor sports complex, housing, a hotel and commercial office space. It also includes a riverwalk park and a pedestrian bridge.

The project is the brainchild of Brett M. Johnson, founder and partner of Fortuitous Partners, a private equity group, that also owns the Phoenix Rising Football Club. Both the Phoenix team and Rhode Island FC will play in the United Soccer League Championship, the second division of professional soccer in the U.S.

Johnson is also founder and CEO of Benevolent Capital Partners, which according to its website has varying levels of operational and ownership control over several professional soccer clubs and commercial real estate developments in the U.S. and U.K.

The Pawtucket team has signed a 30-year agreement with the USL. The stadium, which is expected to cost about $137 million, is designed as a multipurpose facility to accommodate other sporting events as well as cultural and civic events, such as concerts.

The stadium is slated to be ready for the 2025 soccer season. In the meantime, the team will play at Bryant University’s Beirne Stadium. 

Currently 24 teams play in USL Championship, a dozen each in its eastern and western divisions. Two expansion teams, one in Milwaukee and one in Des Moines, are slated to join the Rhode Island team in the league next year. OKC Energy, which last played in 2021 is on hiatus while a stadium is being constructed and is expected to return to the league in 2026. USL Championship, based in Tampa, Florida, began operation in 2011.

According to the bond issue’s preliminary official statement, construction on the first phase of the project, which includes the soccer stadium, began on Oct. 1, 2021, paused at the end of June 2023, then resumed in late August. Nearly $30 million has already been spent on the project, mostly from Johnson’s group.

Fortuitous Partners in August said it had secured the final needed equity investment and letters of commitment from lenders to provide the private financing for the project.

“Once complete, the private investment in Tidewater Landing will represent the largest investment of private capital in any development in Rhode Island in over a century,” the company said.

The bonds are backed by state economic activity taxes, or EATs, so they are not a general obligation of the state or the city. EATs include sales and use taxes, personal income taxes, and business corporation taxes imposed by the state collected in special districts, such as the one for the soccer stadium and the related development project.

Since the bonds are unrated, and therefore considered speculative, they are only being sold to qualified institutional buyers, meaning those managing at least $100 million of securities or registered broker-dealers with at least $10 million invested in non-affiliated securities.

The mayor’s office didn’t respond to requests for comment.

Lorde Lock LLP is bond counsel. MuniCap Inc. is the municipal advisor. The trustee is U.S. Bank Trust Co.