For Baseball Stadium, Hartford Changes Financing Plan
The city of Hartford is planning to change the way it finances its new minor league baseball stadium, a move that officials say will save taxpayers millions.
Hartford Mayor Pedro Segarra says the city is going to establish a new entity called the Hartford Stadium Authority -- an entity that, under state law, municipalities can create. That authority will then go out and borrow the money to pay for the construction of the new baseball stadium for the New Britain Rock Cats. To do so, it will issue what are called revenue bonds. The council has set a construction cap of $56 million.
"What we're looking to is taking advantage of the best possible economic circumstances so that we benefit the residents and the taxpayers of the city," Segarra said.
This structure is in contrast to the previous plan, in which the developer, DoNo Hartford LLC, was going to borrow the money and the city was going to pay an annual lease payment to the developer.
Segarra discussed the plan in his office Friday morning, joined by Council President Shawn Wooden, Treasurer Adam Cloud, and city staff. The proposal will go before the city council on Monday.
"I think this is how government should work," Cloud said, referring to what has been a continually evolving plan to build the stadium just north of downtown. Cloud then explained that the new structure would save money in two ways.
First, under the old plan, the city's more than $4 million annual lease payment to the developer would have gone up by five percent three different times over the course of the lease. Under the new arrangement, those increases go away -- something Cloud said could save the city $11 million.
The second savings component, he said, is that "we get to borrow at a rate less than what had originally been contemplated by the private market."
The city doesn't yet have an estimate of the savings that will be generated as a result.
Segarra said the new plan only applies to the construction of the stadium, and not to the remainder of the $350 million project, which includes residential and retail development. The new authority board will have five or seven members and will made up of a combination of city officials and members of the public, Wooden said.
Meanwhile, the city is still negotiating its contracts with the developer -- DoNo Hartford. It says the talks are in the final stages. And the need to be -- the plan is still for a February groundbreaking, and Segarra says the goal is still to play baseball in April 2016.
Bob Landino is one of DoNo's principals. He says one major difference with the new deal is that the authority, not the developer, will own the stadium. That means that his company will lose the benefit of both the lease payments and the ability to have an asset that depreciates over time. He says he's leaving money on the table, and that's money he said he won't make up elsewhere in the deal.
But he said that this is the right decision.
"There's economic benefit that we lose, but we firmly believe it's the right thing to do for the city of Hartford," Landino said.