Guest MINDSETTER™ John Loughlin: PawSox in Providence – A Counter Offer
Monday, April 20, 2015
As you’ve no doubt heard by now, investors who bought the Pawtucket Red Sox would like taxpayer help in building a new downtown baseball stadium on some of the former 195 land in Providence.
While I support the idea, in concept, I have no interest in any deal that benefits these investors at the expense of Rhode Island taxpayers or puts public money at risk while privatizing the profits.
That said, there may be another way that would leverage the excitement and entertainment value of a new minor-league stadium on the former 195 land AND benefit the State of Rhode Island as well as the city of Providence.
A huge problem stymieing economic growth in Providence has been, and remains, parking. I for one, hate going into the city because of the lack of parking. So here’s a way to kill several birds with one stone.
Why not have the State of Rhode Island build a 5000 space (or more) parking garage across the street from the proposed stadium and keep the revenue it generates? There are several tangible benefits to this idea.
First, is the obvious revenue. Let’s assume a 5000 parking space garage, that charges $15.00 per spot is at 50% capacity, 5 days per week, 52 weeks per year. That would generate gross revenue of 3.9 million annually. Add to that evening parking, again at $15.00 per spot for 74 home games, again at 50% capacity, you’ve added another 2.7 million in gross revenue, for a total of 6.6 million in gross revenue. And that’s at 50% capacity. Some of this revenue could be earmarked for economic development grants for the City of Pawtucket to help compensate their taxpayers for the loss of the team.
Secondly, offer free parking on the weekends and free parking during the Christmas shopping season with a free shuttle to local Providence retailers and restaurants - now Providence is suddenly an attractive place to shop. It cuts into the gross revenue a bit but we’re still easily in the black.
Third, carve out, say 1000 spaces, for a long term lease to any potential developers of the Superman building. You’ve just solved the parking problem for development of that building into apartments making it far more attractive to private developers.
Fourth, you have just made the remaining 195 lands far more interesting for potential development; you leverage this to asset to lure business to that land as well.
Government doesn’t do very well as private business so I would suggest the State put out to bid a government owned, contractor operated contract to run the garage.
If we fill the garage to 75% or 80% capacity the economics are even more attractive easily covering any help provided to the Red Sox developers and returning a profit to the taxpayers, which should be divvied up as tax cuts improving our business climate.
A state-owned, contractor operated garage could be a win-win for Rhode Island, Providence AND the Red Sox.
It will create construction jobs in the short term and revitalize the downtown retail district plus cut taxes and improve the business climate. It also makes the idea of a downtown stadium an asset to the city and state instead of a liability to be paid for by taxpayers while private investors profit.
Lastly, once the idea has been fully vetted and the numbers crunched by those whom we pay to do this kind of due diligence, namely our Governor and General Assembly, the whole plan should be put to the voter to approve or deny.
If we think out-of-the-box, we could really jumpstart the economy with this simple idea.
Related Slideshow: The Ten Biggest Questions Facing the PawSox Coming to Providence
If the new ownership of the Pawtucket Red Sox want to build a new stadium in Providence, a number of questions need to be answered. The potential for a major contruction project in the state's capitial city touches upon a number of issues, from money, to politics, to jobs, and development.
What are the owners looking for from the state?
It's been one week since the new ownership group of the Pawtucket Red Sox was announced -- and their intention to look at Providence as a potential new location for the Red Sox AAA affiliate. How long this has been their plan is unclear but what is more certain is the new owners are considering the pursuit of some public funding to be on the table. What will they be seeking from the city and state, and how much? As the state still reels from the failed 38 Studios deal, look to see what might be proposed -- and how the public reacts.
How much is the city -- and state -- willing to give?
While the new ownership has indicated that Providence is tops on their list for a new location for the PawSox, there are other cities and towns that could vie for attention. "I said to Mr. Skeffington, if Pawtucket could pull it out, would they be interested, but he said basically if it's not Providence, it would be a broader catch area," said City Council President Louis Aponte, of his conversation with the new ownership. As the state and its capital city deliberate the best use of downtown real estate -- and the news 195 land -- how much will they be willing to make the new owners happy, especially if they starting pitting Providence against other locales?
What is the potential economic impact on Providence?
If Providence is the new home of the PawSox, it gets a ball club that has seen attendance at McCoy top 500,000 for 16 straight years -- only Louisville, Columbus, Buffalo, and Indianapolis have longer streaks. "Anytime you can draw in on average 7500 people for games, it brings brings value to the state," John Gibbons, Executive Director of the Rhode Island Sports Commission, told GoLocal in January. "That type of business doesn't necessarily draw in hotel use, but I know those facilities nearby do well when the PawSox play, and I know they bring in tax dollars every night with the sales at the park." Jobs aside, watch to see who conducts economic impact studies -- and what that means in terms of any negotiations between owners and the city.
How many jobs will be retained?
Pawtucket's loss is Providence's gain, and the questions is does that go for jobs as well as economic impact. How many of the existing PawSox job holders will see an opportunity in Providence? Will the new ownership bring in new vendors, new office staff, new grounds crew? Will there be any downsizing in an attempt to streamline operations?
How many jobs will be created?
One of the bigger questions is will a new Sox stadium create any new jobs in a state that certainly needs them. Construction of a new stadium would no doubt provide short-term labor opportunities for the buildings and construction trades, but what about long term opportunities? The development of the 195 land is beginning to take shape after addressing infrastructure needs, and now the city and state are looking to capitalize on the potential to foster high job growth industries. Does a new baseball stadium fit that bill?
What will get built around it?
The potential location for a baseball stadium that is currently being discussed is the land just to the north of the South Street Landing project, the mixed-use multi-million dollar project will be a new home to a Rhode Island nursing education Center, Brown University offices and graduate student housing as well as a parking garage. There are multiple 195 parcels on the land west of the river. Will addition parking options be needed? The PawSox play approximately 70 home games a year. Who will step up as potential new neighbors?
How does it fit into 195 development?
Governor Gina Raimondo during her campaign called for the 195 land to be used as a manufacturing hub. “In order to rebuild our economy, we have to start making things in Rhode Island again,” said Raimondo during the campaign. “My strategy will be to take the good ideas coming out of our universities and colleges and turn them into products we manufacture here. We have a historic opportunity with this I-195 land and we have to get it right." There are over eighteen acres available for development -- and Raimondo shook up the 195 commission last month with her own set of appointees, who have yet to make any major moves - as of yet.
What level of transparency will be disclosed?
The announcement of the sale of the PawSox to its new ownership group was followed by a press conference led by new owner James Skeffington. While Skeffington offered ballpark figures for how much a new stadium might cost -- he cited $60-$70 million for other stadiums of its size -- what's unclear is how much the owners paid for the ball club. If the ownership (whose personal wealth combined totals over $1 billion) seeks public funding, how much will they be willing -- and required -- to disclose about personal financial interests?
Should Raimondo focus on larger issues?
Rhode Island's new Governor is entering her third month in office, set to introduce her first budget proposal in two weeks, and is facing tackling a projected $200 million budget deficit. Having recently announced a working group to overhaul Medicaid, following identification of the state's most pressing fiscal issues, can the Governor afford to spend time brokering a deal for a minor league sports stadium? Raimondo spoke of a state Innovation Institute being the cornerstone of her 195 vision -- will subsidizing a minor league ballpark be a focus of the administration?
How have other deals performed – Convention Center, Airport, 38 Studios, Produce Market, Providence Place?
Providence hasn't seen major capital projects since Waterplace Towers changed the city skyline following the completion of the Providence Place Mall and the new Convention Center. Since then, the failed 38 Studios deal has brought into scrutiny private companies being underwritten with moral obligation bonds -- and tax stabilization agreements in the city have similarly undergone scrutiny by the city council and taxpaying public. Will a look a past projects play a role in the development of a stadium?
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