RI Voters Should Decide Fate of Proposed PawSox Stadium, Says Taxpayer Group
Thursday, September 14, 2017
Rhode Island Center for Freedom and Prosperity is recommending that the voters of Rhode Island should decide the fate of the proposed funding scheme for a new stadium for the Pawtucket Red Sox.
"There is simply too much distrust of government right now for the public to accept what will be perceived as a backroom deal. If this stadium is to be publicly owned, then the people should have a direct say. This is not your typical corporate subsidy deal and has many subtleties. Proponents and opponents should have the chance to make their case to the public and let the chips fall where they may,” said Mike Stenhouse, CEO for the Center.
With hearings set to begin on the stadium, the Center says that an alternative path where Rhode Islanders have the question placed directly before them in a 2018 referendum, as is the process for most public bonds is the better approach.
RI Center on Eminent Domain
Regarding the related issue of eminent domain, the Center is urging state and local officials to avoid setting any precedents before it is clear the public supports the venture.
Further, the Center reiterates its position that the government seizure of private property should never occur for private economic development purposes. However, the fact that the proposed stadium would be publicly owned, presents an added consideration; but is yet another reason why the public should first make the call.
The Center continues to recommend that state eminent domain statutes be reformed to prohibit eminent domain for private uses, similar to the bill (S2409) submitted by Senator Mark Cote in 2016.
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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