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The planned $125-million mixed-use development surrounding the Polar Park baseball stadium in the Canal District will be smaller than anticipated and be realized about two years later than initially scheduled, according to a report to the Worcester City Council from City Manager Edward Augustus released on Friday.
This hotel-apartment-office-retail development from Boston-based Madison Properties has been planned as key to the city paying for the 30-year financing on the $132-million public baseball stadium for the minor league Worcester Red Sox without having to tap the city's pre-existing tax revenue streams. According to Augustus' report, the stadium development will still pay for itself through the tax collections on the specially created district surrounding the ballpark, as the city has restructured its debt repayment schedule and will realize revenues from other developments on the site.
The report on Madison's development on Friday detailed the changes to the five aspects of the property. Other than a downsized hotel, other parts of the project have not been changed in scope, although the city has lowered the anticipated assessed value on the project, based on more conservative estimates of what the development will generate in taxable value. Completion dates have been delayed until September 2022 or later, with the last aspect completed in December 2024:
The report included anticipated assessed values of individual components of the project but did not update the anticipated total investment by Madison. When originally announced in 2018, Madison was due to invest $140 million into the properties. In January, Augustus reported private development investment on the ballpark site had been reduced to $125 million.
In terms of assessed value, the value of four projects detailed in the report on Friday now totals $49.3 million, compared to the $73.7 million in anticipated assessed value for the same buildings in January.
Many of the markets slated to make up the Madison development — hotel, office space and retail — have been adversely impacted by the coronavirus pandemic.
As the Worcester Business Journal reported Monday, the parking garage being built by the city and leased to Madison properties development's parking garage will also be delayed. The garage, which is relied upon in large part to provide parking for fans for Worcester Red Sox games, will now be ready by next fall instead of the spring.
The number of planned parking spaces in the garage has been reduced from 525 to 340. Because of the lower number of spaces, the amount in lease payments Madison is paying for the garage has dropped from $275,000 annually to $178,000. Those amounts are fixed for five years; in the following years, the lease payment is dropping from $300,000 annually to $194,000.
Neither Augustus nor Madison President Denis Dowdle were available for comment on Friday evening.
The city said it will increase the amount it waives in permitting fees for Madison Properties, from $2 million from $2.25 million, because of rising construction costs. As part of his report, Augustus is asking the City Council to approve modified tax breaks on the Madison developments, some of which require Madison to make tax payments regardless of if the developments are open.
In exchange for these tax breaks, waiving of fees and the development's role in financing the $132-million ballpark, Madison is due to convey the land for the ballpark to the Worcester Redevelopment Authority at the next WRA meeting on Sept. 25. The original deadline for that conveyance was April 1, 2019.
In his report, Augustus said the Polar Park stadium will still open in April as planned, describing a Herculean effort by the construction team to overcome a two-month stoppage on the work in the spring due to the coronavirus pandemic. The report did not give an updated cost for the baseball stadium. In April, Augustus told WBJ the effort to make up for lost time would likely cause the project's cost to rise above $132 million, as more crews are needed to complete the project on time.
Additional developments in the ballpark district
Augustus' report unveils a potential second development next to the ballpark: the four-acre site where a Table Talk Pies manufacturing building now stands, for which Table Talk is in what Augustus called advanced talks with an unidentified developer for a new project. Table Talk broke ground this summer on a new industrial site on Gardner Street.
The report also said the city has found a buyer for five adjoined small parcels between Green Street and the ballpark site, a planned deal officials previously announced. The buyer is Churchill James, a limited liability corporation registered to Thomas Keane of Charlestown and Harry DiLeo of Worcester.
Churchill James is looking to build a candlepin bowling alley at the site, along with roughly 80 residential units in a five-story building, according to the city. The pair operates Flatbread Company Brighton and Brighton Bowl in the Brighton area of Boston.
Churchill James is buying the site for $3 million, the city said, which offsets what the city paid for the properties. The city bought those properties — at 85 Green St., 2 Plymouth St., and 5, 7 and 8 Gold St. — as part of a deal to acquire an adjacent site needed to build the ballpark.
The city is planning on using the $3 million from the sale to help cover the first few years of payments on the bonds for the $132-million ballpark, since the delays in the Madison developments will delay the tax collections on those properties.
Because of the additional Table Talk and Churchill James developments, along with the planned Madison developments, Augustus said the city anticipates the ballpark district will generate more in taxes throughout its 30-year life than it will need to pay off the ballpark construction. He recommended the City Council create a new capital fund to use the anticipated excess funds over the life of the ballpark district to assist in paying for the South and Doherty High Schools and other school improvements, public safety buildings and a new Department of Public Works facility.
CORRECTION: A previous version of this story compared the updated anticipated assessed value of four buildings from Madison Properties vs. the investment value of those building, as anticipated by the city in January. This updated version compares anticipated assessed values from January vs. anticipated assessed values from Friday.