Poor Pawtucket. Several years ago, they wanted to find someone to help them build a new stadium for their soccer team, the Rhode Island FC. Then in 2019, this mystery group, called Fortuitous Partners (FP), told city officials about their $400 million plan that involved building a soccer stadium downtown along with other amenities. Brett Johnson, a developer for FP, got everyone excited with talk of creating a “365-day-a-year destination with sports entertainment, retail, food, and then putting hotels and multifamily around them”. Specifically, the project would include a 10,000-seat soccer stadium, new apartments, offices, and a hotel to name just some. Maybe the best part? FP could have this ready for the 2024 season.
So FP won the bid and “the biggest development in Pawtucket history” started its engine. The $84 million project was going to be funded with $36 million dollars of taxpayer money and credits. But within a year, FP was having issues getting certain private owners to agree to a deal. FP would eventually get all the agreements done, but this delay meant that multiple extensions had to be given to FP by the city/state. As construction began on the stadium, FP realized that the cost of supplies had gone up significantly over the last year. Therefore, FP asked the state for more money and was denied. FP then asked whether they could shift money away from the housing parts of the project and into the stadium section, leaving less than $1.5 million for housing. The State saw that the project was failing, so they put together a new financing deal that scaled the project down considerably size-wise. It also caused several state officials to worry “over the lack of detail, continued cost escalations and fears that the project may never happen, leaving the state on the hook for millions of dollars”.
The new financing deal was done, so let’s get that stadium constructed! But not even a year into the construction, everything stopped. The state suddenly refused to hand over a portion of the agreed-upon $60 million in public money. It didn’t take that long to realize that the state did not want to give any more money until FP could raise additional money for the investment and loans. FP had apparently spent $30 million and needed money. According to Brett Johnson, FP needed $10 million from private investors. Another managing partner of FP updated the city council by telling them that construction “won’t start for at least another year”. He also had one minor detail to share: “there’s no private funding lined up yet to pay for it”.
After a few months, FP claimed to have gotten around $15 million from private investors. Since FP doesn’t disclose who their investors are, nobody knows where this money actually comes from. Now, we have a new investor and savior for this project. We just have no idea who it is. The past stadium agreement between FP and the city/state said that Brett Johnson would personally guarantee the project if anything went wrong. Now, the guarantee has been expanded to include “a personal guarantee from a guarantor with a significant, personal net worth exceeding $250 million”. So if the stadium has significant cost overruns or if FP goes bankrupt, this person would step in to help or deal with whatever is left. I am still a bit perplexed as to how someone can be an investor in a project receiving millions of taxpayer dollars yet not be revealed to those taxpayers.
Some may wonder why this project needs a new guarantee person. My answer would be to do a basic amount of research on Brett Johnson and the answer should become obvious. Did a single person in Pawtucket bother to do even the slightest bit of research on him? GoLocalProv sure did:
- He claims to be a “Director and Shareholder at Ipswich Town FC”. He isn’t the director, and he owns a microscopic amount of stock in the club. GoLocal found Ipswich’s finances.
- He claims that his twin brother, Grant, is not an investor in the project. Just ignore when Grant lists Rhode Island FC in his portfolio and anything Grant says in recent interviews about “bringing the only professional sports team for the state of Rhode Island”.
- He claims to have been the managing director at Zealot Networks from 2015-2017. Zealot Networks shut down in 2016.
- He claimed to have “broken ground” on a new stadium in Los Angeles during his time as majority stockholder of an esports company called Glytch. This never happened. As we found out later, he never even made a single investment in Glytch either.
- He claims to own six clubs around the world. He doesn’t.
The city likely took a sigh of relief when a person with money came about and guaranteed this project. When you hear stories of the project founder using the stadium construction as collateral for personal loans., it should make everyone involved in the project worry about whether this thing will get done.
“GoLocal has secured copies of financial documents that unveil that Brett Johnson, the head of Fortuitous Partners, has used his interest in the proposed Pawtucket soccer stadium project to secure personal loans in the secondary banking market” – GoLocalProv, 08/23/23
I won’t get into a profound discussion of UCC and lenders. To keep it simple, Johnson borrowed money and is using the stadium project as collateral. So, if Johnson doesn’t pay back the money, this allows for a lender “to seize the listed property to recoup loan funds”. But one of the biggest red flags about this is that he never informed the city/state or anyone about doing this…which is very sketchy and brings up plenty of questions.
“Stephen Griffin, the founder of the firm Alley 101, said, “UCC liens naming Johnson as a debtor…should have been informed that the principal developer has been borrowing against his interests in entities affiliated with the Tidewater project. Further, the liens raise other questions such as: What information was provided to the lenders? Was that information consistent with what was provided to the State of Rhode Island, the City of Pawtucket, and private investors? Have the lenders loaned funds against future tax credits? All of this also raises more concerns the sources of capital funding the project” – GoLocalProv, 08/23/23
Did I mention that Johnson also borrows money from a man who is in jail for stealing $1.3 billion in a Ponzi scheme?
Anyway, the secret investor is on board and construction re-started a month ago. This project seems to be headed in the correct direction. What could possibly go wrong?