Worcester seeking more tax breaks for WooSox-related development

Photo | Courtesy A rendering of the mixed-use development slated to rise across Madison Street from Polar Park.

Write a Comment

By Grant Welker

From the outset of planning for Polar Park stadium, the $132-million public commitment for the Worcester Red Sox ballpark was said to be a catalyst for a $125-million mixed-use development planned to rise next to the stadium.

But existing tax breaks and public financing for the development may now be joined by further tax breaks being requested by Worcester City Manager Edward Augustus in the City Council meeting on Tuesday, according to a filing he made on Friday in the council's agenda.

Augustus is requesting approval from the City Council for three additional tax breaks for the development: for an office building slated to rise beyond Polar Park’s left field wall, another for a residential building south of Madison Street, and a third for a building calling for office, laboratory and retail use.

The 121,000-square-foot left field building is proposed for a 15-year tax break set to start in fiscal 2022. The residential building is also set to receive a 15-year tax break. The 60,000-square-foot office, laboratory and retail building is proposed for a 10-year tax break.

Denis Dowdle, president of Madison Properties in Boston, who is developing the area around the new ballpark.

But the city is putting some pressure on Boston developer Denis Dowdle and his company Madison WG Holdings to complete some aspects of the project on-time. Dowdle would be required to begin paying property taxes as if the hotel and residential buildings were already open even if they're not open by the deadline: the start of 2022 for the hotels, and the end of 2022 for the residential buildings.

The hotels also have a previously announced 14-year tax break. The city has also previously agreed to waive $2 million in permitting fees for the project, and has said it will reconstruct Lamartine and Washington streets, which line the south and east sides of the project site.

Worcester has not been alone in giving subsidies to Dowdle’s project.

The state is paying $23 million for a parking garage on the site to accommodate the project's own tenants and visitors, along with those for the ballpark and surrounding businesses. Another $12 million will subsidize market-rate housing.

Two other state grants have gone to benefit projects just outside the development and the ballpark, but both given with the ballpark in mind: a $16-million overhaul of the Kelley Square intersection, and a $3.5-million rebuilding of the General Pickett city parking lot at 45 Green St. into a new plaza leading to the ballpark.

The city’s request for additional public support for the development — made public Friday, and going before the City Council on Tuesday — came the same day as the city administration disclosed costs for the city-funded ballpark have ballooned to $132 million.

Thanks to rising construction costs and some site challenges that the city said was unforeseen, the ballpark itself will cost an extra $9.4 million. Another $20.7 million has been spent by the city on buying businesses located on the site and helping them relocate, among other site preparation costs.

The requests also come as construction on the site south of Madison Street appears to be running behind schedule. The first phase of the development was originally said to open by Jan. 1, 2021 in an agreement reached in 2018 between the city and Dowdle.

A 225-unit resident building is now set to open by September 2021, and a second one, with 125 units by the end of 2022. Those buildings will also have approximately 3,000 and 20,000 square feet of retail space each.

Conjoined hotels of 140 and 122 rooms each are slated to open by May 2022. The building calling for office, laboratory and retail use is targeted to open, the city says, by the end of 2023.

The left field building isn’t targeted for completion until Sept. 1, 2021, but Augustus said in the update to the City Council that the “skin, shell and core” of the building will be completed at the same time at the ballpark, which is eyed for April 2021.

Dowdle’s project is critical to the Polar Park project paying for itself though new tax revenue, as city officials have argued. The development was slated in original contracts to bring in more than half of the $3.7 million the city says it needs annually for the debt service starting in 2022.

With approval of the latest agreement between the city and Dowdle, another key element will finally be complete. Dowdle owns the ballpark site, which he bought from longtime site owner Wyman-Gordon, and will with final approval convey the land to the city.

Original agreements stipulated the city obtaining the ballpark site by April 1, 2019.

Read more Worcester Business Journal coverage on Polar Park and related development: