It’s The Economy, Stupid: Forget Worcester Ballpark Cost Overruns And Focus On The Surrounding Growth
Massachusetts’ second city has its critics over recent cost overruns at the ongoing construction of Polar Park, the future home of the Worcester Red Sox. But city officials say the greater real estate prize makes it all worth it.
Worcester officials and leaders from the city’s new Minor League Baseball team have worked a new financing deal to account for nearly $30M in cost overruns at Polar Park, originally expected to cost about $90M.
The Worcester Red Sox will cover the $9.4M in increased construction costs at the ballpark, while the city will pick up the $20M tab for higher-than-expected site prep and land acquisition costs at the planned 18-acre ballpark-anchored neighborhood spread across the city’s Kelley Square and Canal District.
Field of Schemes author and stadium finance expert Neil deMause criticized the move last month for diverting funds that would otherwise go directly to the city.
But city development and business leaders maintain Worcester is still on track to significantly benefit from the project, which includes a mixed-use component beyond the ballpark, and that no existing city tax revenue will be used to fund ballpark construction.
“Besides the practical achievement of generating the revenues to pay for the ballpark construction, the development transforms over 10 acres of brownfields that have sat fallow for over a generation,” Worcester Chief Development Officer Michael Traynor and Assistant Chief Development Officer Peter Dunn said in a joint statement to Bisnow.
“This private development provides new productive uses and density to enhance the district as a place to live, work and play. The development will enable job creation, tax base expansion, housing opportunities and new amenities for the district.”
Economists often caution against cities throwing public funds at stadiums, even if they net early success.
Leaders of the Chicago suburb of Bridgeview, Illinois, approved in 2005 a $110M loan to finance a 20,000-seat stadium that eventually became home to the Chicago Red Stars National Women’s Soccer League team and hosted summer concerts for entertainers like Jimmy Buffett, Kelly Clarkson and the Dave Matthews Band.
Boston-based Madison Downtown Holdings will now build the mixed-use component outside Polar Park in one phase rather than an earlier two-part plan. The project includes the 10,000-seat Polar Park, a 120K SF office building, 350 residential units, two hotels with about 260 rooms combined, 60K SF of retail and a 60K SF mixed-use building the developer plans to market to life sciences companies.
Leaders said they see the stadium less as an economic revitalization silver bullet and more as a complement to an economic surge already underway.
Developers replaced a failed downtown shopping mall with CitySquare, a $565M mixed-use project that includes hundreds of units of housing, a hotel and a new local office for insurance provider Unum. MassPort continues to focus resources on growing service at Worcester Regional Airport, which has added flights from JetBlue, Delta and American Airlines since the quasi-public agency invested $100M in infrastructure upgrades to the airport.
Home to 12 colleges and universities, the Worcester area is home to a similar, albeit smaller, higher education population, similar to Boston and Cambridge. Worcester also has more than 60 biotech companies, including AbbVie and Charles River Laboratories, according to Massachusetts Biomedical Initiatives.
“Many of the things driving Boston’s growth have a significant presence here,” Worcester Regional Chamber of Commerce CEO Tim Murray said. “The ballpark coming in really just accelerates the development. Sure, there’s the Polar Park piece but there are other neighborhoods seeing action, too.”
Boston and Cambridge in Eastern Massachusetts combine to make up the world’s largest life sciences cluster, garnering the most venture capital and National Institutes of Health funding as well as lab space. But Worcester leaders say they have the right ingredients to tap into the life sciences success seen an hour train ride to the east, at a significant value to potential tenants.
Labs in East Cambridge range between $100 and $135/SF, according to Cushman & Wakefield Director of Business Intelligence Brendan Carroll. In Worcester, labs go for around $20/SF.
“I don’t think Worcester views itself as being a relief valve to Boston,” said Finard Properties CEO Todd Finard, whose firm acquired the Greendale Mall in Worcester in December and is planning a mixed-use redevelopment in its place. “The city has happily let Boston do its thing, and folks are starting to realize, with its lower cost of living and all the same services, Worcester is now this place for investors and developers to come to and have a chance to thrive.”
By placing less emphasis on the stadium and more around what its surrounding area could be is key to launching a successful sports-anchored district, said JLL National Director of Sports and Entertainment James Renne. But having the stadium and mixed-use development deliver at the same time can be also be key to promoting a new district with the right amount of foot traffic on day one.
“I’m personally very bullish on sports-anchored mixed-use developments because I’ve seen a lot of success on this kind of model,” Renne said about the concept as a whole. “It’s not necessarily a model you can take and repeat in every market, but there are many cases it’s a win-win.”
Bad models of publicly financed stadiums are often ones without an experiential retail element attached or if the project is removed from an urban area, Renne added. Successful ones like L.A. Live, adjacent to the Staples Center in Los Angeles, or Providence Park Stadium, in the Goose Hollow neighborhood of Portland, Oregon, blend stadium and neighborhood and can swiftly move people to and from the area with public transportation.
With 20 round-trip commuter rail trains between Boston and Worcester, leaders in the Central Massachusetts city want even more service but think they are heading in the right direction for a successful ballpark and further economic expansion.
“I think the most important thing is people,” Murray said. “We’ll continue to add density downtown and the surrounding neighborhood that creates an 18-hour/day feel. It’ll be a real destination.”