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Bishop: The Devil is in The Details - PawSox Park isn’t 38 Studios, But Just as Bad

Thursday, May 25, 2017

 

The Pawtucket Red Sox say they learned from their last failed effort to have their way with Rhode Island taxpayers, but it’s uncanny how much this year’s corporate welfare looks a lot like last year’s. If you think you’ve heard this song before, the refrain is awfully familiar: Give us an $85 million dollar waterfront stadium.

There has been a good deal of confusion about who puts in money when to give an expanded notion of the team’s contribution. But this is sleight of hand that would have done Wimpy proud, he who regularly told Popeye: I’ll gladly pay you Tuesday for a hamburger today.

The proposal suggests nonchalantly that the state, the city and the team would borrow $71 million dollars through the Pawtucket Redevelopment Agency. But it isn’t clear who is really the guarantor of this effort other than the state’s citizens. Oh, it wouldn’t be a real guarantee, only a “moral obligation” – you remember, the kind of borrowing that the states officials told us we had to pay off in the 38 Studios gamble.

The difference here, everyone says, is that there is a product. If you build it they will come.  The debt service is $4.2 million a year. That’s $8.50 a ticket at current attendance to pay for the stadium. So what do the Pawsox think they need to run the team and where is that going to come from if ticket prices are maintained around $10 a head?

Well actually the PawSox want all the ticket revenue. They suggest the state and the city will recover their share through taxes. So are we to put a $10 tax on each ticket sale? Or how much do we have to tax each hot dog sold to make up that difference?

The team’s apparent commitment of a million a year for 30 years is equivalent to the lease rate they are currently paying for McCoy. And where are we after that deal and a $12 million state subsidy for McCoy? They have a team and we have a dump . . . at least according to the study, largely funded by taxpayers to back this proposal.

Even in recent years, online fan threads suggested McCoy stood up well against other minor league baseball venues, but we are told that it can’t continue without $35 million just to stem deterioration. This is reminiscent of our roads and bridges which they tell us have gone begging for maintenance to the point where they need replacing.

So, if we couldn’t afford to maintain McCoy under the old lease, how would we maintain a new stadium? We did build McCoy, they are coming, and we still can’t afford it!

This whole process seems to be backwards. Why is it a question of whether we can afford it? The question should be, if baseball teams want minor leagues to bring up their future players, can they afford it? That is really the question for all forms of corporate welfare for which the state has become a never ending source.

The vision of McCoy as a family night out made the Pawsox a workable franchise in the last century, but what we are really being told is that the model doesn’t work anymore. We need year round non-baseball activity and adjacent retail and restaurants. And the Pawsox owners are only too willing to take more of the best parcels on the cheap and queue up for more tax abatements to help us with that. (And city services that need to be relocated to facilitate this new development boom, who is going to pay for that?)                 

It’s really this spin off development where they suggest the state and city could recover the investment in the stadium. But you really can’t count that as new revenue, as no evidence is presented that this is new spending. Patriot Place at Gilette Stadium in Foxboro is indeed a fulltime phenomenon compared to the few football games. But what it accomplishes is attracting discretionary spending from other stores and restaurants. That’s great if you are the New England Patriots owners and your brand is attracting that business. But this explains why Massachusett’s sole contribution to the affair has been better access roads.

But in Providence, the one time fairy tail ending for the story of a yellow brick road leading to a new emerald stadium, just about every major business venture proposed in the city comes hat in hand to the powers that be for a handout. A check from the commerce corporation, a tax abatement from the city, whatever the traffic will bear. And those of us who stand opposed to such corporate welfare are told we aren’t willing to ‘invest’. Investment is not what government does. That’s obvious when you realize that it always has nothing to show for these giveaways.

Even a relative ‘success’ like the Providence Place Mall pays no property taxes. Its stores pay no property taxes. And there is no real evidence how much of that business is simply poached from local stores vs. those in Massachusetts so, for all the risk, the reward is really about zero – or as proponents of these projects would say, revenue neutral. If every business in the state were revenue neutral like that, the state’s budget would be $0.

But what about those other cities with those really cool ballparks like Durham? Right across the street from the stadium in Durham might be a familiar sight to Rhode Islanders, the Cuban Revolution Restaurant that started here in Providence before it moved south. But, when I sat down with the owners, I heard that they aren’t in Durham because of the stadium, they are there because the utilities cost half of what they did in Rhode Island, and their taxes are half, their rent and labor are modest. Yet they can charge as much for Cuban sandwich as they did in Rhode Island, because folks have a job and money to buy one. The stadium is a little bit of icing on the cake but they do better with the performing arts clientele.

We keep ignoring the fundamentals and trying for the Hail Mary. And maybe those who are tired of the 38 Studios drumbeat are right. It isn’t necessary to compare every hairbrained scheme to 38 Studios. This one just doesn’t work on its own.

Brian Bishop is on the board of OSTPA and has spent 20 years of activism protecting property rights, fighting overregulation and perverse incentives in tax policy. 
 

 

Related Slideshow: International League Stadium Investments

Costs based on 2016 dollars

Prev Next

Buffalo Bison

 

Coca-Cola Field

 

1988

 

No recent major improvement

Prev Next

Lehigh Valley IronPigs

 

Coca-Cola Park

 

2008 Construction

 

$55.9 M

Prev Next

Pawtucket Red Sox

 

McCoy Stadium

 

1999 Renovation 

 

$21.4M

Prev Next

Rochester Red Wings 

 

Frontier Field

 

1996 Construction

 

$53.9M

Prev Next

Scranton/Wilkes-Barre RailRiders

 

PNC Field

 

2013 Renovation

 

$48.3M

Prev Next

Syracuse Chiefs

 

NBT Stadium

 

1997 Opened

 

$41.8M

Prev Next

Charlotte Knights

 

BB&T Ballpark

 

2014 Opened

 

$54M

Prev Next

Durham Bulls

 

Durham Bulls Athletic Park

 

2014 Renovation

 

$22M

Prev Next

Gwinnett Braves

 

Coolray Field

 

2009 Opened

 

$71M

Prev Next

Norfolk Tides

 

Harbor Park

 

1993 Opened

 

$16M

Prev Next

Columbus Clippers

 

Huntington Park

 

2009 Opened

 

$78.1M

Prev Next

Indianapolis Indians

 

Victory Field

 

1996 Opened

 

$30.5M

Prev Next

Louisville Bats​

 

Louisville Slugger Field

 

2000 Opened

 

$55.6M

Prev Next

Toledo Mud Hens 

 

Fifth Third Field​

 

2002 Opened

 

$55.2M

 
 

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