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RI GOP: Convention Center Contracts Warning Sign for PawSox Deal

Friday, May 01, 2015


RI GOP: Convention Center Contracts Warning Sign for PawSox Deal

The Rhode Island House Republican Policy Group continued their investigation into the state's spending on the Convention Center Authority (CCA) at a meeting on Thursday, releasing findings from an Auditor General report that showed massive contact cost overruns in the 1990s that they said serve as a warning sign.  

"We want to make sure that the process is changed moving forward so that something like this doesn't happen again," said Deputy House Minority Leader Patricia Morgan, of the report from 1993 that showed that contract costs for the CCA - which has a lease agreement with the state that has cost Rhode Island taxpayers nearly half a billion of dollars in the past twenty years  -- were exponentially higher than what had been indicated at the outset. 

Read the Report HERE

Jeffrey Robert, the policy analyst for the group, looked at the Auditor General's report which showed that contracts for the construction of the convention center eventually overran projected costs by fifty to over a hundred times the original estimates.  

The findings come on the heels of the report by the policy group that showed that the lease agreements with the CCA have cost the state $450 million since it was built -- and as the owners of the Pawtucket Red Sox pitched a $120 million thirty year lease agreement for a new $85 million stadium in Providence that was deemed "unfair" by Governor Raimondo earlier this week

Contract Cost Concerns

The group's meeting on Thursday focused on the initial impact studies for the Convention Center, including projected facility usage  -- and up front costs, which were shown that when eventually put out to bid, ballooned to significantly higher amounts by the time the work was done. 

According to Robert, the original impact study for the Convention Center had shown that estimated annual attendance was 300,000 to 500,000 people  -- but actual attendance from 2006-2014 averaged 294,000 annually. 

The RI Convention Center

Moreover, the Auditor General report showed that an engineering consulting firm whose bid had been chosen for $23,100 was eventually paid $1.2 million, and a contract for the removal of contaminated soil at the site in 1990 for $39,000 ultimately ended up clocking in at a cost of $3.9 million by 1991.  

"We want to put in legislation that you can't get that kind of escalator without resubmitting [a bid]," said Morgan. "We ought to put a whole process in place."

Currently the state pays over $25 million a year to the Convention Center Authority, who in turn says it stimulates hundreds of millions in economic impact annually.   

"We're not playing 'gotcha' here," said Morgan. "We just want to make the CCA can be more valuable to Rhode Islanders, and see them get busier.  We won't be able to cut out [the state] subsidies altogether, but as much as we can take the taxpayer out, the better," said Morgan. 

The group said unanimously on Thursday that they wouldn't support any lease agreement with the state for the PawSox to come to Providence -- at any level.  On Monday, Governor Raimondo noted she believed the current deal as proposed is "unfair" to Rhode Island taxpayers; it is unclear what the ownership's next steps will be. 

"It's still the same players, and same playbook," said Morgan.  "The similarities with the Convention Center shouldn't be lost on us."


Related Slideshow: Leaders React to PawSox Owners’ Providence Stadium Proposal

The new owners of the Pawtucket Red Sox presented their vision for a new $85 million stadium in Providence -- including a lease agreement from the state that would require the owners be paid $4 million a year for the thirty year duration.

Now, elected officials and business leaders are weighing in on the initial proposal by the ownership group -- see below.  

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Gary Sasse

Former Rhode Island Director of Administration, Executive Director of the Rhode Island Public Expenditure Council, and Founding Director of the Hassenfeld Institute for Public Leadership at Bryant University

"A minor league ballpark may not be an economic game changer. Thus it's cost and benefits must evaluate environmental, cultural, social and economic factors. The key point is any stadium should be consistent with the overall strategic development of Providence. This story has not been told yet."

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Edward Mazze

University of Rhode Island Distinguished Professor of Business

"I would like to see the PawSox stay in Rhode Island. I do not think Rhode Islanders should pay for a new stadium for the next several decades or see Providence not collect taxes that could make it to a better city.....with better schools, lower property taxes and a lower automobile tax. To support the current proposal, there has to be tax payments to Providence, a financial deal with Pawtucket by the owners or the state to deal with the empty stadium and the owners paying for the new stadium with little in the way of state government assistance.

If there is state government financing assistance, there must be a guarantee that the team would not leave the state for the length of time of the financing. It would be interesting if the owners would consider selling "seat licenses" as a way of raising funds to build the stadium. This would be a real market test as to whether or not there is a need for a new stadium."

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Monique Chartier

Spokesperson, RI Taxpayers

"The Paw Sox owners have asked the City of Providence for a waiver of property taxes.  But the last thing that Providence needs is to remove yet another property from tax rolls.  City Council President Luis Aponte's request that state taxpayers make up lost property taxes is understandable but out of the question, especially in light of the state's own very serious budget deficits.

Governor Raimondo has correctly pointed out that the state has very limited resources to invest in economic growth.  These limited resources cannot go to develop prime public land into a very seasonal use that will have minimal impact on the economy at a substantial cost to local and state taxpayers.  Our state leaders must say no to this project and return to the vitally important work of helping ALL businesses, not just one, by improving the state's tax and regulatory climate.  We as a state can consider whether to participate in the luxury of a sports stadium as soon as our economy is healthy again."

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Pam Gencarella

Spokesperson, OSTPA

"If Skeffington and his very wealthy partners want the PawSox in Providence then they should put an offer on the table that covers all of the costs to make it happen. They must provide revenue to the state for the land that they want to develop, and property tax revenue on its full value to the capitol city."

Pictured: James Skeffington

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Mike Stenhouse

CEO, RI Center for Freedom and Prosperity

If the team is seeking taxpayer dollars, then taxpayers should get something in return, whether a share of equity or a slice of team revenues. For example, the federal government received equity for its investment in GM, while the Green Bay Packers are owned by citizen shareholders. It's not beyond possibility; let's find a way to make it happen."

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Terrence Hassett

Senior Deputy Majority Leader, Providence City Council

"I believe the stadium is beneficial to Providence and the state. The parking capacity must be resolved in favor of the stadiums' fans that is fair and reasonable. What events and other uses are not being presented which I find troublesome. A stadium is a great venue for families, colleagues and generally, baseball fans to enjoy. A $120 million commitment from state taxpayers is a large role asked of them wherein the return on the participation is not convincing to date."

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Aaron Regunberg

Rhode Island State Representative, (D-Dist 4, Providence)

"For me to support a deal, that $120 million figure needs to come down dramatically, and a strong community benefits agreement needs to be reached. I also think it would be reasonable - if the state is making a significant public investment in the project - to see the state receive a portion of the profits from the stadium."

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Laurie White

President, Greater Providence Chamber of Commerce

"It is still in the early innings. The chamber was briefed on the proposal on Friday and we expect that it is subject to change. Conceptually, it is very exciting. Awaiting further details."

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Gina Raimondo

Rhode Island Governor

"The PawSox are an important institution in Rhode Island and our goal is to keep them in the state," said Raimondo. "The idea of a stadium in downtown Providence that can be used for multiple purposes is exciting. That said, my top priority is getting Rhode Islanders back to work, and we have very limited resources to invest in economic growth - especially in the face of a large structural deficit. I am committed to working with Mayor Elorza, the Speaker, and the Senate President to evaluate whether this project is in the best interest of Rhode Island, and whether we can afford it."

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Stefan Pryor

Rhode Island Commerce Secretary

"We hope and aim to keep this treasured team in Rhode Island. The project has the potential to enhance the vitality of a key district within our capital city. At the same time, this proposal involves a significant request for public resources. In collaboration with the City of Providence and the General Assembly, we will review this proposal in order to determine whether it makes financial sense and whether it will help catalyze the I-195 corridor." 

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Nicholas Mattiello

Rhode Island Speaker of the House of Representatives

"We have not received a written legislative proposal yet, but when we do, it will be thoroughly analyzed.  I will be talking to my House colleagues and I will gauge public opinion before making any assessment on the direction the state should move in."

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Teresa Paiva Weed

Rhode Island Senate President

"The proposal that has been presented by the new owners of the Paw Sox to build a professional ballpark in Providence potentially represents a significant investment in Rhode Island. The proposal will be fully analyzed by the full Senate in a thorough and transparent process.”

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Jorge Elorza

Mayor, City of Providence

“The prospect of keeping the Red Sox’ Triple A team in Rhode Island represents a significant and exciting development opportunity for our city and state. We have coordinated to develop guidelines that ensure a thorough analysis of the stadium proposal.  As Mayor, I am committed to continue working in close coordination with Governor Raimondo, Council President Aponte, our leaders in the General Assembly and the I-195 Commission as we move forward to make Providence and Rhode Island a better place to work, live and do business in the long term."

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Luis Aponte

Providence City Council President

“The stadium has the potential to be catalytic and transformative in the way residents and visitors experience Downtown Providence. With the promise of drawing hundreds of thousands of spectators annually to the city, the stadium could help spur development of the nearby I-195 parcels, and generate additional revenue for the city and the state. We are committed to working with the Governor, the General Assembly, and the developers to ensure the project aligns with our goals and vision for the city, and that it is a good investment of our resources.”

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Donald Grebien

Mayor of Pawtucket 

"Perhaps the state should consider buying the franchise and reinvest in Pawtucket. It would be more cost effective and the state would have ownership at the end of the deal," said Grebien Communications Officer Rico Vota.  "The Mayor has received many calls, emails and postings from fans throughout the state that do not support this current proposal. He is very careful to make sure that his decision is not solely based on the fact that he represents Pawtucket who would loose this valuable, historic ballpark. As someone who comes from the private sector, this deal only makes sense for the new business group and not the state of Rhode Island in its current structure."


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