GoLocalProv | News | 5 Big Stories in Rhode Island This Week – December 9, 2023

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State of RI Has No Financial Protection If Pawtucket Soccer Team Folds

The State of Rhode Island has committed tens of millions of dollars and the City of Pawtucket is poised to issue $48,450,000 in bonds to support the construction of the minor league soccer stadium in Pawtucket, but if the proposed Rhode Island FC team folds, the state and Pawtucket could be left with an empty stadium.

The state and city would continue to be obligated to make bond payments for decades.

This fall, American soccer icon Landon Donovan’s team folded.

The San Diego Loyal, coached by Donovan, ceased operations after its fourth season in the United Soccer League (USL) — the same league in which the Pawtucket team is scheduled to play.

Brett Johnson, the owner of the minor league soccer team and the lead developer of the Pawtucket stadium, gave up the ownership of another USL franchise — that team then dropped out of the league and became an amateur team — which now plays in a community recreation area.

Johnson had promised to make that team into an economic powerhouse just like he has with Pawtucket – Listen to Interview Below.

McKee Administration

Rhode Island Governor Dan McKee’s administration could not provide any proof that there is any financial guarantee that owners of the team or the stadium have provided any guarantee.

First, RI Commerce Corporation’s spokesperson told GoLocal, “The provisions are laid out in the agreement presented to the Board on 07/25/22. It’s online for you to view and read through, but I attached them to this email for you.”

But that 86-page document provides for the authorization of the state’s funding. It does not bind Johnson to provide any personal guarantee, place any money in escrow, or provide any other financial protection for the team.

The funding approved by Commerce holds protections that the stadium must be completed before the state releases dollars — including millions of dollars in “Rebuild RI” monies, but there are no protections if the team folds.

Then, when GoLocal pressed Touchette, he issued a statement on behalf of the state and the city of Pawtucket stating:

The incentive agreement entered into by RI Commerce Corporation includes provisions aimed at keeping Rhode Island FC in the state for the long-term. The project Sponsors under that agreement committed to having a USL Championship Division team utilize the stadium as its primary playing venue each year for a period of thirty (30) years. Additionally, it is our understanding that the franchise agreement between the team owner and the USL mandates that the team owner may not relocate to a new or substitute home stadium while the Series 2023A Bonds or any bonds issued to refinance the Series 2023A Bonds are outstanding.

While the agreement between the USL and Johnson may, as presently drafted, restrict Johnson from moving the team, nothing protects that state or Pawtucket if the team folds like the San Diego team.

A review of the final 334-page bond documents outlines protections for the stadium, but no protections if the team ceases operation.

Of course, Pawtucket already has one vacant stadium. McCoy Stadium is poised for demolition after the Pawtucket Red Sox owners struck a deal with Worcester and, moved the team north. Now, that ownership group is set to sell the franchise to a minor league baseball corporation owned by the private equity firm.

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