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Taxpayers will once again be holding the bag in this old ball game

Christopher Curran
Posted 4/22/15

This past week, the new owners of the Pawtucket Red Sox revealed their financial requirements to build a new Triple-A baseball stadium in our capital city.

Termed in the press as the “Big …

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Taxpayers will once again be holding the bag in this old ball game

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This past week, the new owners of the Pawtucket Red Sox revealed their financial requirements to build a new Triple-A baseball stadium in our capital city.

Termed in the press as the “Big Ask,” the financial schematic presented puts the risk for this adventure squarely on the shoulders of the taxpayer. The coalition of team owner/partners have very little to worry about in that their investments are insured by Rhode Islanders. The proposed deal is complicated, risky, and replete with safeguards for the baseball organization.

Equally generous to the PawSox and non-beneficial for Providence residents, the proposal includes a waiver of all property taxes which would have been payable to the capital city at a time when the city is in a precarious financial condition. Hauntingly, the proposal calls to mind the ghost of the 38 Studios deal, which has left a justifiable legacy of feelings of distrust in all public insured private ventures.

The beneficial economic assertions and projections heralded by James J. Skeffington, part owner and spokesman for the organization, are questionable. The logistical difficulties involved with building on the I-195 Development Land were scoffed at as easily manageable by Skeffington as well. Additionally, thus far, his public statements have been expressed with a faux altruism – as if this proposal was an act of largesse and we should jump on the bandwagon before this “opportunity” is offered to four other New England cities who have supposedly expressed an earnest interest.

Yet, when one compares this proposal with deals struck to build other Triple-A ballparks in our nation, it seems astonishingly one-sided.

Whether this proposal ever comes to fruition will depend on several factors. Will lawmakers on Smith Hill cooperate? Will Gov. Gina Riamondo eventually support this deal fully? Will taxpayers remain mum as yet another potentially burdensome deal becomes a reality without voter referendum? Will Ocean State citizens once again be holding the bag in the Old Ball Game of Rhode Island government circumventing the will of the people to accommodate some special interest?

On Wednesday, April 15, 2015, the Pawtucket Red Sox organization revealed the numbers in the equation they wish to use to build a new state of the art ballpark in the city of Providence. Also, they revealed an architect’s rendering of an impressive conception of a stadium, which would brighten Providence’s landscape. However, the finances to achieve that build are questionable.

First, the overall cost of the stadium project would be $85 million. Of that, $70 million would be used to erect the stadium itself, while $5 million would be used to build a new storm-water catchment system and abandon the present one and to move a gas line pipe. Another $10 million would be used to build a new 750-car parking garage, which would generate great revenue for the owners, but would substantially add to the cost a baseball night out for fans and families.

Although every state’s building costs are somewhat different specific to labor expense, the cost of $70 million to build the park itself is at least $16 million higher than the current highest cost Triple-A park built to date, which is BB and T Park in Charlotte, N.C. With a cost of $54 million, that facility was completed last year, and is more extensive and grandiose than the park planned in Providence. Thus prompting the question, why is the cost of this proposed stadium build so high in our state?

Also suspect is the complicated leasing scheme presented. The owners of the team would lease the state of Rhode Island the stadium for $5 million per year for 30 years. Then the state would sublease the stadium back to the stadium owners for $1 million a year for 30 years. Thus the sum of the equation is the PawSox organization will own a stadium that we paid for with our net $120 million dollar expenditure. The team owners will supply the initial outlay of $85 million and will enjoy a guaranteed return on their investment provided by the taxpayer. Additionally, the owners will essentially be held harmless while the city of Providence does not see one red cent in property tax revenue.

The project requires the use of some federally restricted land that is supposed to be used for green parks. Skeffington dismissed the notion that this would be a stumbling block to his plans: “Our lawyers have looked at it and clearly the state has the right to waive any restrictions they have on the land.”

However, since the I-195 Land Commission has jurisdiction over the property, there remains a question as to what entity can waive federal restrictions. According to spokesperson for the commission, Dyana Koelsch, Skeffington might be presumptuous, as she stated: “The Commission is looking at the issue, but has not reached any conclusion,” and, “It would likely be something that would have to be a federal-state arrangement.”

Also involved in this scheme would be a perpetual lease for $1 per year for the land. One has to wonder whether selling the lots to taxpaying businesses would make greater sense than leasing the land for a buck per year to one entity.

The baseball organization claims that a commissioned study by the company Brailsford and Dunlavey affirms the great benefits for Rhode Islanders offered by the deal as presented.

They claim that the ballpark would generate $2 million annually in state taxes from the team’s games. Of course, that depends to a great degree on whether ticket sales truly skyrocket with the new stadium. They also claim 30 to 40 permanent jobs will be created and approximately 180 seasonal jobs will also be created. This is supposed to generate $6.8 million in wages.

They additionally assert that $12.3 million in direct economic activity will result from the ballpark’s existence. However, what they fail to consider in this estimate is the finite amount of entertainment dollars expended in the area. Triple-A ballparks do not normally draw interstate consumers, as the Boston Red Sox do. So one would assume if a family or a couple is spending money at the ballpark, they are not spending their money somewhere else locally. So, the promised $12.3 million in potential economic activity might in reality be much less.

Furthermore, when one compares this proposal with how other Triple-A ballparks around the country are financed, one realizes how stilted this deal is in the owner’s favor. For instance, according to Dave Cottenie from Stadium Journey Magazine, Raley Field in Sacramento, Calif. – which is the home of the Sacramento River Cats – was built with no public or tax dollars! Their stadium has a seating capacity of 14,014 and has a great many amenities. Therefore, it is more expansive than the proposed stadium in Providence.

Also, Coca Cola Park in Lehigh Valley, Penn., which is the home of the Lehigh Valley Iron Pigs, had a $50 million price tag paid for by naming rights, leasing concessions, and a long-term incremental tax deal that assured full taxation after 10 years.

Additionally, Isotopes Park in Albuquerque, N.M., home of the Albuquerque Isotopes, required $25 million for a renovation. So, they put a bond issue before the voters for approval and still paid their taxes over time.

Despite the ponderous structure of this stadium deal, Raimondo has made some foreboding statements that would seem to indicate she is going to lend her support to Skeffington. She stated the following to the Providence Journal: “The idea of a stadium in downtown Providence that can be used for multiple purposes is exciting,” and, “It would certainly be good to have a crane in the sky and some activity and some building.”

We taxpayers hope the governor is not swept away with the notion of building an impressive edifice at any cost just to get something substantial build in our capital city.

All in all, if this particular deal is eventually forged as presented, Rhode Islanders will be contending with the worst deal for our taxpayers in comparison to any other Triple-A stadium deal in the country. Skeffington has own self-interest and that of his partners at heart. He is doing us no favors. If he has four other New England cities truly interested, then let one of them become the beneficiary of his “benevolence” and “largesse.” We Rhode Islanders do not want to hold the bag any more!

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  • Justanidiot

    Why don't the owner's leave the PawSox in Pawtucket and ask for the same money from the state. Just think of the money that could be invested into bigger and better things there because they are not starting from scratch. Oh wait. It is their ball. If we don't play nice and give them what they want they will take it and go play in Foxboro. Go FoxSox.

    Friday, April 24, 2015 Report this

  • Ken B

    The new owners of the PawSox should not be allowed to hold the State of Rhode Island hostage so that they can make millions of dollars of profit down the road. The new owners should work with Pawtucket and the State of Rhode Island to improve McCoy Stadium and the infrastructure around McCoy Stadium in conjunction with the building of the new Blackstone River Valley National Park. A 10 million dollar investment by the new owners and the State of Rhode Island would generate 90 million dollars of Federal matching funds to get the job done.

    Monday, April 27, 2015 Report this