Rhode Island
The state will ultimately pay $132m to build a soccer stadium in Pawtucket. How did it get so expensive?
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Fox – LA
The Tidewater Landing stadium in Pawtucket is on track to open early next year and, when it does, the 10,500-seat building is expected to be the most expensive minor league soccer stadium in the country.
That’s not a shock given the rising cost of construction, but even the state economic development officials who signed off on the project didn’t know just how steep the price of publicly financing the stadium would climb.
To channel $27 million to stadium developer Fortuitous Partners, Pawtucket earlier this month sold a $54.3 million tax-free bond. Under the terms of the bond, the state is projected to pay $132 million in total debt service over the next 30 years.
Those borrowing costs – which Bloomberg’s municipal bond reporter compared to the price of government debt in Pakistan – have triggered sticker shock in some quarters.
“My concern is how this got to be so expensive and such an enormous waste of taxpayer money,” said Michael McNally, a former member of the state Commerce Corporation Board who voted against the project in 2022.
But Rhode Island Commerce Secretary Liz Tanner, who has overseen the deal for the state for the last two years, on Monday defended the deal over the long term.
“Stadiums are expensive. We know that they’re expensive, and these dollars that we’re putting into it are going to have a nice infrastructure project for us when we’re done,” Tanner told The Journal Monday. “We know we’re going to have a stadium when we’re finished with a soccer team, and that’s good for Rhode Island.”
How did we get here? Shrinking project but expanding cost
The Tidewater Landing stadium plan first launched in December 2019, with the city still stinging from the loss of the Pawtucket Red Sox baseball team.
Initially the stadium was supposed to anchor a $400-million development spanning the Seekonk River and Interstate 95, containing hundreds of apartments plus shops, offices, a hotel and an event center.
The state first approved a $50-million public subsidy package for the development in February 2021 after the segment north of I-95 had been eliminated, slimming the project down to 25 acres.
But before work could begin, inflation spiked and the Federal Reserve hiked interest rates, sending the cost to complete the project soaring. The stadium is now expected to cost $137 million.
In the summer of 2022, Fortuitous shrank the project again, this time asking for the same public investment, but it would go to the stadium alone. On July 25, 2022, Gov. Dan McKee broke a tie on the Commerce Corporation Board to give almost all of the subsidy package to the stadium.
Public funds going to Fortuitous, once they finish the stadium, are made up of:
- $27 million from the bond
- $10 million in Pawtucket’s federal pandemic aid
- $10 million from state tax credits. (The state is issuing $14 million in Rebuild RI tax credits to net $10 million.)
But the cost of the borrowing keeps going up. When the deal was approved, the state planned to provide Fortuitous $27 million for the stadium from a $37-million bond. By October, with higher interest rates prompting investors to demand ever higher yield, the principal on the bond grew to $54 million, including reserves and administrative costs.
The deal allows the state to make interest-only payments on the bonds for the first 10 years. There’s a $5-million reserve in place to make payments in any year the General Assembly were to decide not to appropriate the required funding. And there is an $11-million “capitalized interest fund” that will fund payments in the early years.
Of the $54-million principal borrowed, $6 million is set aside to pay middlemen, lawyers and other administrative expenses, according to a breakdown from Commerce RI.
Why didn’t the state just pay less two years ago?
Why didn’t the state just appropriate $27 million for the stadium two years ago and save the tens of millions required by this exotic financing?
“When this project started a couple of years ago, this was the deal that was made, as far as how it was going to unfold, and all of those conversations were based on far lower interest rates,” Tanner said. “The $27 million, if it had been done upfront, would have to had been General Assembly approved.”
More: Soccer stadium bond adviser cited ‘concerns’ about project before quitting. What we know.
Since authorizing this type of state financing for a proposed new PawSox ballpark, legislative leaders have been cool to the idea of a direct investment into the soccer stadium.
Why not change the deal as economic conditions changed over the years?
“So we had committed to a deal at that point and we were in a contractual relationship to commit to following through with what we had done,” Tanner said. “And if you had changed the course of the transaction, there would’ve been a level of uncertainty without knowing whether the legislature was going to pass those dollars or not. So we continued on the path that we had set up originally.”
Although the Pawtucket Redevelopment Agency issued the stadium bonds, they are to be repaid with state tax revenue generated in Pawtucket, supplemented if need be by appropriations from the Assembly.
Because of the money set aside, state lawmakers won’t have to appropriate any money for the stadium until 2027.
Tanner said if interest rates rise again, the 8.24% rate the state is paying will end up looking like a bargain. If they fall, it is likely the state will be able refinancing after 10 years at a lower rate.
Is this 38 Studios all over again?
The complicated financing structure of the stadium bonds recall the $75-million 38 Studios deal.
Unlike the 38 Studios bonds, which were supposed to “pay for themselves” through revenue from the company that ended up folding, the stadium bonds are intended to be repaid by state tax dollars.
The risk to the state lies in what would happen if Rhode Island FC, the team slated to play in the stadium, folds, something not uncommon in professional soccer.
As it awaits the construction of the soccer stadium, Pawtucket is planning to tear down McCoy Stadium, which assumed negative value once the PawSox left.
More: Pawtucket soccer stadium’s financing is complete. Here’s what’s behind the $137M project
“[Rhode Island FC] did commit to a 30-year relationship with us,” Tanner said. “If they don’t, there’s liquidated damages that they would have to pay.”
Asked what those damages would be worth if the team goes bankrupt, Tanner said the state would get the stadium as an asset.
What would the empty stadium be worth?
“Again, we’re doing speculation on so many ifs,” she said.
To encourage Fortuitous to finish the residential and commercial development that initially attracted the state to the project, Commerce RI is providing the developer $1.5 million to start working on that next phase.
There is still no timeline on when any plans for stadium-adjacent development will be drawn up or cost estimates formulated.
Tanner said, if anything, she is “far more optimistic” about the residential/commercial development happening “because they have their investors all gathered to work on the stadium project and so we know there’s more people who have already committed the stadium that could be potentially partnering with them.”
Rhode Island
Are you owed back wages? Here’s where you can find out.
U.S. Labor Department is encouraging Rhode Islanders to use their online tool to find out if they’re among those owed more than $2.5M in back wages
PROVIDENCE – More than 1,500 Rhode Island workers are owed a total of $2.5 million in back wage, and just in time for Christmas, the U.S. Department of Labor wants to put it in their hands.
The money, $2,576,342, was recovered from employers in Labor Department investigations.
The Labor Department encourages anyone who believes they may be owed back wages or knows someone who may be owed wages use their Workers Owed Wages online tool. Anyone who uses the WOW search tool can simply input their current or former employer’s name to learn if the division is holding wages on their behalf.
“The laws enforced by the Wage and Hour Division provide the foundation for U.S. workers’ rights, including the rights to be paid legally required wages and other important protections,” the Labor Department said in announcing the effort.
The tool is available in both English and Spanish.
Rhode Island
McKee names new RI housing secretary. What we know.
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PROVIDENCE – Gov. Dan McKee has named a new housing secretary: Deborah J. Goddard.
Who is she? Goddard, the former managing director for policy and program development at MassHousing, currently leads the Massachusetts-based DJ Goddard Consulting, which has done consulting work for the Rhode Island Department of Housing among other public, quasi-public and nonprofit agencies, according to a press release from the McKee administration.
Prior to this role, Goddard served at the executive vice president for capital projects at the New York City Housing Authority from 2016 to 2019, where she oversaw $3 billion of construction builds and helped advance the agency’s energy and sustainability programs, the press release said.
She is scheduled to start her new $238,597 job on Dec. 2. In the interim, her name has been submitted to the Rhode Island Senate, which is in recess, for advice and consent after the legislature convenes in January.
“Deborah Goddard is a deeply committed and accomplished housing professional whose work has benefitted people from all backgrounds,” said McKee. “Housing affordability and availability in Rhode Island have never been more important than they are right now. I am confident Deborah’s knowledge and experience will guide the department to achieving our housing goals.”
Senate President Dominick Ruggerio said he “look[s] forward to the Senate’s thorough review of Ms. Goddard’s appointment through the advice and consent process.”
House Speaker K. Joseph Shekarchi said he met with Goddard for the first time a day earlier “and she was very impressive.”
In her own turn, Goddard said her career has been “dedicated to creating and preserving housing opportunities … for the unhoused, for renters and homeowners, alike, with attention to equity.” As such, she said, “I am very aware of the persistent headwinds that we face in this arena, but they are not unique to Rhode Island nor are they new.”
The Rhode Island Department of Housing has been run by an interim chief – former Senate Majority Leader Daniel Connors – since Housing Secretary Stefan Pryor’s last day in July in one of the state’s most critical jobs.
A former Senate majority leader, Connors – who quit a job as a top aide in the Raimondo administration after his arrest for driving under the influence – had most recently been chief of staff in the state Executive Office of Health and Human Services, making $184,000 annually.
On the day of his interim appointment, the governor’s office said: “He is not being considered for the permanent position and will return to his role at EOHHS at the end of this process.”
Pryor is now a partner in Palm Venture Studios, which “works to rescue and build companies that positively impact human and planetary health,” according to his LinkedIn profile..
How did we get here?
Spokesman Andrea Palagi told The Journal at that time that McKee’s office would interview local candidates for the permanent position over the coming weeks, and a national search would only be initiated if a qualified candidate could not be found. As it turned out, there was no national search.
Pryor announced that he was leaving in late June after close to a decade leading Rhode Island’s economic development efforts as its first commerce secretary and, for a year-and-a-half as head of its Department of Housing,
The hunt for his replacement stretched out over several months, amid significant jockeying between the many arms of Rhode Island’s housing community for advantage − and appointment.
The Department of Housing is responsible for managing hundreds of millions of previously dedicated state dollars and the newly approved $120-million housing bond.
But the picture that has emerged in the wake of Pryor’s departure was of an agency beset by employee infighting, leaks about end-runs in the award of contracts, and complaints to the governor’s office about the management styles of both Pryor and Assistant Secretary Hannah Moore, whom Pryor brought into the department with him.
More recently, Rhode Island’s deputy housing secretary, Deborah Flannery, resigned to take a job with the Vermont Housing Finance Agency. Her last day is imminent.
The Department of Housing was unable to pinpoint the amount Goddard and her firm have been paid as a consultant or promised. As for her role, spokeswoman Emily Marshall listed non-specific duties, such as: “drafting regulations for internal review, and co-authoring multiple grant applications, among other responsibilities.”
Rhode Island
Most, but not all, Rhode Island hospitals get good report cards from national ranking group • Rhode Island Current
Four Rhode Island hospitals — Newport, Miriam, South County and Westerly — received top marks in the fall report from Leapfrog Group, a nonprofit that grades hospitals on safety.
The Washington, D.C.-based Leapfrog assigns hospitals letter grades based on data from the Centers for Medicare & Medicaid Services (CMS) as well as Leapfrog’s own surveys. Rhode Island’s hospitals didn’t perform much differently than they did in spring 2024 (The Miriam and Newport have consistently earned A’s the past two years), with two notable exceptions. Westerly’s A is its first since 2022. Landmark Medical Center in Woonsocket, which has received nine consecutive A grades, dropped to a B.
Kent Hospital and Rhode Island Hospital also received B grades. The embattled Our Lady of Fatima Hospital and Roger Williams Medical Center both earned C grades.
Rhode Island’s hospitals collectively ranked seventh nationwide.
South County Hospital’s good report card was a boon to Dr. Kevin Charpentier, the vice president and chief medical officer at South County Health, the hospital’s parent company.
“It’s more than a score — it’s a promise to our community of prioritizing the highest level of patient care,” Charpentier wrote in an email.
The score was also a bit of good news amid an ongoing dispute between the hospital’s administration and its staff. A September letter sent by doctors and nurses to the South County Health’s board of trustees detailed escalating tensions between providers and management, with doctor resignations, service cuts and growing patient backlogs among the signatories’ concerns.
Landmark’s B left its CEO Mike Souza disappointed.
“We take quality very seriously and our team has already put plans in place to address the areas needing improvement,” Souza said in an emailed response to Rhode Island Current. “Our community will continue to receive great care and our expectation is that we will return to an ‘A’ grade in the near future.”
Leapfrog aggregates 30 metrics to assess how well hospitals care for patients as well as prevent bad outcomes, like infections and falls. The grades are given to roughly 3,000 hospitals, not including VA hospitals or children’s hospitals. Hospitals that lack enough data for multiple metrics are also excluded.
Lisa P. Tomasso, senior vice president of the Hospital Association of Rhode Island, said via email that the trade group was pleased with the state’s performance. But she added that the grades, while insightful, are “not comprehensive, as they exclude factors like social determinants of health, community-level health challenges, and systemic issues like Medicaid reimbursement rates.”
But grades still hold value. Robert Hackey, a professor of health sciences at Providence College, said that “hospitals that don’t do well tend to poke holes in whatever rating methodology that’s used.”
“If you look at the hospitals in Rhode Island, for the most part, we’re performing very well,” Hackey said. “Yeah, we obviously have two low performers. It’s Fatima and Roger Williams. And there’s a common thread there. They’re both owned by Prospect and they’re both for-profit institutions, yeah. And they both struggle.”
A representative for CharterCARE Health Partners, the Rhode Island subsidiary for Prospect Medical Holdings, which owns Roger Williams Medical Center and Our Lady of Fatima Hospital, did not respond to requests for comment. Facing growing debt, Prospect has sought to unload many of the hospitals in its portfolio, including the two safety net hospitals in Rhode Island. A proposal to sell Roger Williams and Fatima to a new, nonprofit owner, received conditional approval from state regulators in June, but the status of financing required to complete the transaction is unclear.
Hackey said it’s a bad sign when hospitals ignore questions on Leapfrog’s survey — something both Fatima and Roger Williams Medical Center did when it came to inquiries about nursing and leadership.
Meanwhile hospitals owned by the state’s largest health care system — Brown University Health, formerly Lifespan Corporation — all performed well. Rhode Island Hospital, the state’s flagship hospital, received a B grade despite demonstrating below-average prevention rates of blood and urinary tract infections and falls causing broken hips, as well as less-than-stellar marks for hospital leadership and communication about medicines with patients.
Since 2021, Rhode Island Hospital has received C grades more often than not. The B is evidence that things are improving, said Dr. Dean Roye, senior vice president for medical affairs and chief medical officer at the hospital. The Leapfrog grades “help us pinpoint areas” to work on, Roye said. He added that a reorganization of quality and safety departments across Brown Health’s properties was another factor in Rhode Island Hospital’s improved grade.
But Hackey is eyeing another Brown property, the A-graded Miriam, for a surgery he has scheduled for December. He explained with a laugh that checking the Leapfrog ratings was one of the first things he did when deciding where to have his surgery.
“The goal of this is to have a more educated healthcare consumer,” he said.
Above average results
Leapfrog uses the percentage of A grade hospitals in a state to determine a state’s national ranking. Almost 61% of Utah’s hospitals received A grades, giving it the top slot nationwide. The top 10 states all sported at least 40% A grade hospitals.
An A grade indicates hospitals that prioritize safety, said Alex Campione, program analyst for the Leapfrog Group, who noted that about 32% of hospitals nationwide achieved this grade. Rhode Island was over the national average with 44% of its hospitals receiving an A grade.
“Each year more than 250,000 people will die in hospitals due to preventable errors, injuries, accidents, and infections,” Campione said. “We estimate that, at the very least, 50,000 of those lives could be saved if all hospitals performed like A hospitals.”
Rhode Island placed fourth nationwide in Leapfrog’s spring 2024 scores, also with 44% at an A grade, but it was pushed out of the top five this time around by three states that rose with higher grades: California, North Carolina and Connecticut. Connecticut was the only other New England state to crack the top 10. Vermont fared worst of all, and was ranked 48th nationwide, tying for last place with North Dakota, South Dakota and Iowa. There was not a single A grade hospital in any of these states.
Grading the graders
But a bad report card might not be the final word on a hospital’s quality. A 2019 article in New England Journal of Medicine Catalyst graded the graders, and gave Leapfrog a C-, the second lowest of the four systems reviewed. The study noted that Leapfrog had a detailed framework for measurement, with a unique focus on the hospitals’ “culture of safety.” But it also relied on its proprietary survey for a good chunk of its data — a problem, the authors thought, since Leapfrog grades hospitals the same regardless of whether they complete the survey.
Dr. Karl Bilimoria of the Indiana University School of Medicine, who chairs the school’s surgery department and leads its Surgical Outcomes and Quality Improvement Center, led the 2019 study. He wrote in an email Tuesday to Rhode Island Current that Leapfrog’s efforts still leave something to be desired.
“Leapfrog has many issues with their methodology and their general approach that persist and they have been the least receptive to improvement suggestions and the least adaptive to changes in the science of quality measurement,” Bilimoria wrote.
Asked about Bilimoria’s idea that Leapfrog is not responsive to suggestions, spokesperson Lula Hailesilassie said by email that the public is regularly invited to submit feedback on proposed changes to its surveys. Comments on the 2025 survey are open through Dec. 13, 2024.
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