Club to pay $36m toward $86m stadium
Most of money is in lease payments of $1m/year for 30 years
THE CITY OF WORCESTER is building a new $86 million stadium for the Boston Red Sox Triple-A affiliate and charging the team roughly $36 million – two separate $3 million payments at the end of 2019 and 2020 and roughly $1 million a year in lease and tax payments spread out over 30 years.
The city will own the stadium, but the ball club will operate it and retain all the revenues, including ticket fees, concessions, liquor sales, branding rights, premium seat sales, broadcast rights, merchandise sales, and naming rights. Advertising revenues at the stadium will go to the club, while off-site advertising will be split 50-50 with the city. The club has already negotiated a naming rights deal with Polar Beverages of Worcester for an undisclosed sum.
The club is expected to hold at least 125 events at the stadium each year – at least 72 baseball games per year as well as an assortment of concerts, amateur sporting events, and festivals. On a per-event basis, the lease cost works out to about $8,000 per event. The city of Worcester is entitled to host eight revenue-generating events annually at the stadium, and it is currently forecasting total revenue in 2022 of $40,000, or about $5,000 per event.
Under terms of the deal worked out between Worcester and the Red Sox affiliate, Worcester will borrow about $100.8 million in two separate bond offerings to cover the cost of the stadium’s construction. One of the bond offerings will be for $70.6 million and the other for $30.2 million. The city hopes to cover the debt service cost of the larger bond offering with incremental tax proceeds from the development of the ballpark and surrounding area. The cost of the smaller bond offering will be paid using the lease payments from the ball club.
The letter of intent says the Red Sox affiliate, which will play a major role in design and construction of the stadium, will be responsible for any cost overruns associated with the project.