Letter To The Editor: PawSox Stadium Proposal

Dear Editor:

In a recent letter, Mr. Gregory Mancini took exception with my opposition to the $83 million Pawtucket Red Sox Stadium proposal. I would like to respond to his critique.

Given Mr. Mancini is a lobbyist for the building trades in Rhode Island, I can certainly appreciate his enthusiasm for a project that would employ a number of construction workers for a two-year period. I too would like to see these men and women gainfully employed. However, as a fiduciary of public funds, I must also decide if the entertainment facility is beneficial to the general public. For instance, with respect to non-construction related jobs, they would be seasonal and low-paying. This is a not a good selling point.

Another issue is the public belief that well-to-do team owners could privately finance a new stadium for themselves. Mr. Larry Lucchino, a principal owner of the Boston Red Sox and now the PawSox, did just that when he and his partners privately financed some $285 million to revamp Fenway Park after their request for public funding for the project had been rejected. Worse yet, many perceive the owners’ request for $83 million in government support as yet another example of special treatment for big business types. When asked why team owners do not privately finance the new PawSox stadium themselves, the owners allege that public support is required for their Minor League Baseball “business model” to work. Assuming this is true, and I cannot confirm that it is, what do the team owners want from government?

In brief, the Pawtucket Redevelopment Agency would issue bonds to borrow some $83 million ($130 with interest) to construct the new stadium which would be paid back over 30 years. Pawtucket would be responsible to pay-off $15 million of the debt, and the state $23 million. These debts will purportedly be paid back from tax revenues (payroll, sales, and luxury taxes etc.) generated in and around the new ballpark. The team pledged $12 million in cash up front, and has proposed applying their annual ball park lease payments to pay-off the remaining $33 million of their share of the debt. Should these financial projections prove correct, the city and state would roughly break even after 30 years. Meanwhile, one must assume that a well-managed PawSox organization would, for their part, enjoy a profitable return over the same period.

Should this scenario not go to plan, the taxpaying public could be left holding the bag on the baseball stadium. There are two main areas of risk.

First, the city of Pawtucket, hoping to redevelop its ailing downtown area, is depending on new tax revenues derived from prospective commercial development to be built adjacent to the stadium to pay off its bonded debt. In his letter, Mr. Mancini points out that the city has the right to enter into any deal its leaders see fit. While true, the question to ask is: should the state of Rhode Island partner with a municipality that has had to collateralize its future financial state aid to ensure its debt payments are made? Further, Pawtucket is a financially distressed community with significant financial liabilities. I am not alone in my concern about Pawtucket’s ability to pay its share of the debt. Legislative leaders are considering ways to shore-up Pawtucket’s financial position. For example, one way would be to dedicate the revenues generated from stadium naming rights to Pawtucket as opposed to the PawSox owners (This would be a welcome addition.). If one considers that Pawtucket would be the owner of the stadium, it makes sense to make sure it has the funds not only to pay its share of the debt, but also to be an effective steward of the ballpark going forward. It merits mentioning that should Pawtucket finances falter, the state inevitably would have to step in to protect the main asset in this venture, namely the PawSox Stadium itself.

Second, what happens if the team’s tax revenue projections fall short, or worse yet, the team cannot make its lease payments should ticket sales fall at some point over the next 30 years? It is not hard to imagine in our impatient and instant gratification oriented culture that attendance numbers at a traditional, slow-paced sport could decline as it has already happened at McCoy Stadium. Given the fact that the PawSox are a Minor League team, attendance could drop off sooner and more steeply than might occur with a Major League baseball team. Of course, if tax revenues and lease payments fall short or dry-up entirely, the state and its taxpayers would likely get stuck making the payments on a baseball stadium not useful for much else.

Pawtucket’s weak financial position and the potential of declining attendance are risks that must be addressed in ongoing negotiations. If not, the state and taxpayers — as the ultimate backstop of the new stadium — could be holding the bag as they did with 38 Studios.

If the team owners are unwilling to mitigate these risks, the state should walk away from the deal. The loss of the Pawtucket Red Sox would be unfortunate. However, we must ensure that this deal makes sense for our state, and more importantly, does not needlessly expose taxpayers to unnecessary risk. Unless substantive changes are made, I do not believe the current Pawtucket Red Sox stadium proposal meets these minimal standards.

Senator Jim Sheehan

Senate District 36

Narragansett & North Kingstown