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National Stadium Expert: Public Should Not Subsidize PawSox to Stay in Pawtucket

Saturday, January 28, 2017

 

A new report shows McCoy rehab and rebuild costs, and a leading economist says no taxpayer dollars for either, or another location.

A leading sports economist is saying that he would personally advise no public money be spent on rehabbing - or rebuilding - McCoy Stadium for the Pawtucket Red Sox, after a report released this week showed that it would cost $68 million to renovate McCoy, and at least $78 million to construct a new stadium.

“As an economist, I would personally advocate for no public money beyond a provision to infrastructure around the stadium to fans can get to the games,” said Victor Matheson, who is a Professor of Economics at Holy Cross, whose focus is on sports. “That being said, there are certainty sports fans who think that having a AAA team in town is a nice amenity for local residents so might be worth some public money. So, some level of ask might be able to get public support.”

The 182 page report, which was paid for by PawSox owners, the City of Pawtucket, and State of Rhode Island, outlined what would be needed to fix the 75-year old facility, whose lease from the state expires in 2021. 

Read the McCoy Study HERE

The consultants themselves concluded that the “typical goal of a public investment of this nature, to generate a significant return on that investment driven by ancillary development around a new stadium - will ever be realized at this site.”

Meanwhile, Matheson spoke to reports that the PawSox ownership could be eyeing the site where Apex currently stands in Pawtucket - which was not evaluated in the report. 

“If stadium construction is wildly unprofitable at the existing site, there is no reason to believe that another site in Pawtucket would fare much better in the analysis,” said Matheson. “My guess is that a downtown Providence stadium like the previous proposal would have a slightly higher chance of providing an increase in attendance or neighborhood spillovers, but again not enough to justify a big subsidy.”

Picking Apart the Report 

McCoy Stadium

Upon reviewing the report, Matheson offered the following. 

“Page 132 and 134 say it all,” said Matheson. “Spending $68 million on a major rehab gets you about $22 million back over time. That's a pretty big negative return. Spending $94 million on a new stadium gets you about $24 million back over time. That's even worse.”

“It makes sense to do whatever the owners are willing to pay to have done,” said Matheson. “If they are willing to pay an extra $9 million per year in rent, then build them whatever stadium they want. If they expect the taxpayers to do it all, rehab the stadium just enough to keep it from falling down.”

There has been no ask from the collective billionaire ownership of the PawSox since April 2015, when the owners put forth a proposal for an $85 million stadium in Providence on 195 - that could have cost taxpayers $4 million a year, and drew the rebuke of Governor Gina Raimondo and outraged taxpayer and citizen groups. 

“Given the bridges that were burned by the audacious money job by the new owners the first time through, I would be shocked if taxpayers/legislature agreed to give money without at least a 1:1 contribution by the owners,” said Matheson. “I have been wrong before about this, and the taxpayers might become more willing if the PawSox had a credible threat to relocate out of the state - which they don't at the current time.”

SLIDES: PawSox Stadium Aftermath - 2015

 

Related Slideshow: PawSox Stadium Aftermath: Winners and Losers

The Providence baseball stadium looked like a sure thing. Powerful owners pushing the project. Top politicians coupled with influential lobbyists and PR consultants all on board. Then, everything changed.

Prev Next

Winner

Coalition Radio -- A small group of libertarian activists relentlessly advocated against any public financing for a private venture. Pat Ford, Dave Fisher and Tony Jones leveraged internet radio and social media to pound the project and the costs.

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Loser

Speaker Nicholas Mattiello -- The Speaker was all in for the project. He repeatedly voiced his strong support for the project. Some said it was a project for his legacy and others said he supported the project as a result of influence of the ownership group and their lobbyist Bob Goldberg.

It wasn't long ago that the Speaker said the Providence Stadium would be revenue positive.  In a few short weeks, the project somehow went from supposedly financially advantageous to taxpayers to DOA. 

Prev Next

Winner

GOP -- The Rhode Island Republicans came out against the project early and kept raising questions about the cost and the approval process.  Despite being in the political minority, the Republicans used their thorn-in the-side status to play the spoiler. 

Prev Next

Loser

Old School Top Down PR Strategy -- Renderings, fact finding trips for leaders and listening tours were all the strategies embraced by the ownership team and each came back and burned them. The listening tour had higher attendance at many sites by taxpayers who were opposed to the project -- and the fact they had to write their questions down, and be lectured to in response, did not go over well by opponents.

Prev Next

Winner (maybe)

Pawtucket Mayor Donald Grebien -- It looked like the Mayor was a loser for sure with his city's most valuable asset moving from Pawtucket just 6 miles away to a gleaming new $100 Million project in Providence. With the Providence Stadium dead, Pawtucket has a window to try and create a proposal that improves McCoy, is financially viable and acceptable to the ownership group.  

The window is very short, and Grebien will move from the winners' column to the losers' bracket if the PawSox leave RI.

As the Mayor wrote in a GoLocal MINDSETTER™ piece, "We remain hopeful that the new owners will see the value that Pawtucket has given their brand and that the growth we are experiencing will only strengthen it. We hope they will Join the Evolution here in Pawtucket."

Prev Next

Loser

Jorge Elorza -- The Providence Mayor was unable to put together a deal and a location that worked for taxpayers. There was -- and still may be -- an opportunity to bring hundreds of thousands of new visitors into the city annually at the 195 site.

Elorza needs to change the present narrative from crime, a decrepit recreation system, and visits to meet with Guatemalan corrupt leaders to where the city needs to be.

Prev Next

Winner

Taxpayers -- A coalition of taxpayer groups and activists scored their most significant political victory to date. This may spark an empowered effort to take on other issues with enthusiasm.

Prev Next

Loser

Public Financing of Stadiums in the US -- The dramatic defeat of the proposed stadium in Providence may cause other cities, counties and states to take a harder look at the economics of public financing of stadiums.  

There is now a blueprint for how taxpayers and progressives can build a coalition to oppose a professional sports team, organized labor and billionaire ownership interests.

The PawSox defeat and the Boston Olympics collapse may speak to a broader grassroots movement opposed to the spending on public funds on private projects.

Prev Next

Winner

Grassroots Activists -- Multiple grassroots efforts sprang up to oppose the stadium move, and perhaps none as vocal - or visible -- as "Organizing for Pawtucket" and David Norton.

Even when a new stadium looked like it was on life support, Norton and supporters utilized both social media and traditional boots-on-the-ground techniques (read: canvassing the Speaker's neighborhood -- in Cranston) to keep the pressure on until the deal was dead. 

 
 

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