7 Questions the PawSox Need to Answer in Hearings
Thursday, September 14, 2017
Over a 30-plus year period, the previous PawSox ownership group - led by Ben Mondor, Mike Tamburro, and Lou Schwechheimer and others - built the Boston Red Sox farm team into one of the most successful and most beloved minor league sports franchises.
SLIDES: 7 Questions the PawSox Need to Answer - BELOW
However, since the PawSox were purchased in 2015 by a group of businessmen with a combined personal wealth estimated at $8 to $10 billion, the team has been in a public relations free-fall.
Billionaire Ownership Remains in Focus
Only one of the owners lives full-time in Rhode Island. Despite their wealth, many believe that the owners have been in a non-stop mode of asking for public funding for a private concern.
Some of the proposals for the initial Providence stadium were in excess of $140 million. Their new plan for a Pawtucket "only" request is $38 million - although some including the RI General Treasurer Seth Magaziner are concerned that the entire $83 million stadium financing will be backstopped by Rhode Island taxpayers.
Read more about the ownership HERE
The PawSox ownership has refused interviews and is now asking for a total of $38 million in public financing to support the now proposed $83 million stadium.
The first of six hearings will be held on Thursday night at the Rhode Island State House in Room 313, beginning at 6:00 p.m. Read more about the hearings HERE.
“We want to ensure that the voice of the people is heard, and we welcome broad participation from our constituents in these discussions,” said Senate Finance Chairman Bill Conley in announcing the hearings. “The Senate remains committed to the most open, transparent, and deliberative process possible. The Senate Committee on Finance will thoroughly scrutinize all aspects of the legislation during intensive public hearings, and we will receive testimony from anyone wishing to register a position or provide input.”
Additional Hearing Dates:
Tuesday, September 26, 2017 at 6 p.m. at William E. Tolman High School Auditorium, 150 Exchange St., Pawtucket: The committee will review potential ancillary development and Pawtucket’s risk, and take public testimony.
Tuesday, October 3, 2017 at 6 p.m. at the University of Rhode Island, Swan Hall Auditorium, 60 Upper College Road, Kingston: The committee will examine the economic model and review state level risk analysis, and take public testimony
Wednesday, October 11, 2017 at 6 p.m. at the New England Institute of Technology, Media Presentation Theatre, 1 New England Tech Blvd., East Greenwich: The committee will conduct general inquiry into previous testimony and presentations, and take public testimony.
Thursday, October 12, 2017 at 6 p.m. at Roger Williams University School of Law, Room 283, 10 Metacom Ave., Bristol: The committee will continue its inquiry and take public testimony.
Thursday, October 19, 2017 at 6 p.m. at Bryant University, Bello Center Grand Hall, 1150 Douglas Pike, Smithfield: The committee will continue its inquiry and take public testimony.
Related Slideshow: 7 Questions the PawSox Need to Answer in Hearings
Who is responsible for the environmental clean-up costs?
As GoLocal exclusively reported in May, the owners of the Apex site in Pawtucket and the previous owners are battling in Superior Court over indemnification provisions from more than $6.4 million in environmental clean-up costs tied to the land being eyed for the new PawSox Stadium.
The two parties include Andrew Gates of Apex Development Company who purchased the property for $24 million and a number of members of the prominent Fain family, who previously had ownership interest in the property.
Gates’ entity purchased the property in December of 1998 according to city tax records and the property is now assessed at just under $4.3 million — a drop of nearly $20 million in value.
Who is on the hook for the public subsidy (and the entire Stadium cost)?
Critical to the proposal gaining approval by legislators and building public support is that financing costs are not backstopped by taxpayers. Presently, that is in question.
Seth Magaziner, RI's General Treasurer, has raised the red flag about the proposed legislation, “The debt study that we did, no surprise, the liabilities of the City of Pawtucket are pretty high. That being said, the legislation as introduced does suggest that there’s a state backstop.”
He made the comments in an interview with WPRI.
Why should a group of billionaires receive a public subsidy for their sports team?
The owners of the PawSox have a combined personal wealth that makes them among the most wealthy ownership groups in all of professional sports.
Their fortunes are linked to CVS, Providence Equity, Fleet Bank, TJX, and the Boston Red Sox. Unlike the previous owner, the late Ben Mondor, this group has refused to meet the public or speak to the media.
Can Pawtucket support the debt obligation?
While bond rating agency Moody's ranks Pawtucket's future outlook as stable. Moody's flags factors:
Large unfunded pension liability
High fixed costs (combined pension, OPEB costs and debt service)
Low wealth and income indicators
Weak tax base growth
They Have Political Support - Will Raimondo Flip Again?
Proponents, including the ownership group, must feel that Rhode Island is moving quicksand. Governor Gina Raimondo supported the Providence stadium plan until she didn't.
She supported the initial financing structure for the Pawtucket location, negotiated by her Secretary of Commerce Stefan Pryor, then flipped on that proposal and announced her opposition.
Now, she is supportive of the pending stadium deal. Is she willing to bet her re-election on it?
38 Studios, St. Joseph Pension Fund Bankruptcy, and Wrong Track RI
There may only be one Rhode Islander who loves RI's inability to properly review critical financial deals -- Attorney Max Wistow who sued to recover 38 Studios assets and now has been engaged to investigate the largest pension fund (St. Joseph Health Services) collapse -- just three years after the RI Attorney General Peter Kilmartin gave the sale of St. Joseph's assets the green light.
The 38 Studios deal under minded confidence and now the recent failure of St. Joseph's bankruptcy has only fueled the concern that RI cannot properly review financial deals.
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