PAWTUCKET – This summer, when construction work on the new Tidewater Landing soccer stadium was on hold due to money problems, the city’s bond adviser on the project abruptly walked out the door.
In an Aug. 16 letter to Mayor Donald Grebien, Hilltop Securities, a national financial services firm with a long history in Rhode Island, told the city it had “concerns about the proposed stadium transaction and bond offering” and would no longer be working on the project.
Hilltop directors David Medanich, Michael Bartolotta and Maureen Gurghigian said the firm had previously “detailed” the concerns to the city but did not spell them out in the August letter.
“As a fiduciary to the city of Pawtucket and its redevelopment agency… we must do what we believe is in the city’s and PRA’s best interest,” the letter said. Therefore, please let this serve as Hilltop’s notice to the city and the PRA of our withdrawal as the municipal advisor on this bond offering.”
The letter is included as an exhibit in a preliminary offering memo on $48.5 million in stadium bonds now being marketed by the municipal Pawtucket Redevelopment Agency.
After Hilltop broke away from the project, the city hired another bond adviser, MuniCap, which is listed as the bond adviser on the offering memo.
“The city parted ways with Hilltop Securities several months ago and has engaged MuniCap as its financial advisor because of its experience nationally with these kinds of projects,” Grace Voll, spokesperson for Pawtucket Mayor Donald Grebien, wrote in an email. “This deal has been fully vetted and the necessary due diligence has been completed. We are not commenting further on the bond offering while it is being marketed.”
A Hilltop spokesman wrote in an email Friday evening that the company would have no further comment on the Pawtucket bonds.
A spokesman for Fortuitous Partners deferred comment on the Hilltop letter to the city.
The $137 million Tidewater Landing soccer stadium is under construction and expected to open in early 2025.
The Rhode Island Commerce Corporation last summer approved a $60 million public financing package that will net Fortuitous $47 million to use to build the stadium. The largest chunk of the package is $27 million in bonds to be repaid with state taxes – including personal income taxes, sales tax and corporate tax – collected in an area around the project and in central Pawtucket. The city is chipping in another $10 million of its federal pandemic aid and the state has approved $10 million in tax credits.
The rest of the money to build the stadium is coming from a mix of private investment raised by Fortuitous and loans. The bond documents say the developer has already spent around $30 million on the stadium before any of the state incentives or loans have come in.
To help make the bonds more attractive, an unidentified Fortuitous investor worth more than $250 million has agreed to personally guarantee stadium completion along with Fortuitous founder Brett Johnson.
Hilltop has worked on numerous bond offerings over many years in Rhode Island dating back to when it was known as First Southwest. It was one of the firms sued by the state for involvement in the ill-fated 38 Studios deal.