You Can Pay for a Ballpark Without Fleecing Taxpayers
In anticipation of Tuesday night’s Major League Baseball All-Star Game, I began researching a column about Marlins Park in Miami, where the game is being played.
Completed in 2012, the ballpark cost $639 million. Of that amount, Miami-Dade County paid $370 million, 1 with the city of Miami chipping in another $130 million. It almost goes without saying that they ponied up because Marlins owner Jeffrey Loria, employing the tried-and-true tactic of wealthy professional-sports owners demanding new stadiums, was threatening to move the team elsewhere. Now, after six straight losing seasons, Loria wants to sell the team. He’s asking more than $1 billion—a price made possible only because of his state-of-the-art, retractable-roof, taxpayer-funded stadium. Ugh.
But in searching “Field of Schemes,” the go-to website for news about sports stadiums, I came across a rather different story, about the efforts of the Pawtucket Red Sox, the Triple-A minor league affiliate of the Boston Red Sox, to get a new ballpark. Although the dollars are far smaller (though not so small for Rhode Island), it does show that a team and a government can put together a deal that includes public financing but doesn’t hose the taxpayer. It’s kinda heartwarming, actually.
Admittedly, it began badly.
In February 2015, a group of Rhode Island businessmen, together with a few Boston Red Sox officials, bought the PawSox from the widow of the team's longtime owner, Ben Mondor. Much to the consternation of Pawtucket officials, the new owners immediately declared that they would move the team to Providence; they even had a downtown site picked out.
Two months later, they unveiled their financing plan. They would pay the $85 million needed to build a stadium in Providence, but they wanted the state to reimburse them to the tune of $4 million a year for the next 30 years, allowing them to recoup their costs, and then some. The team’s new president, James Skeffington, a longtime Rhode Island bigshot, played the classic sports-owner card: “If we’re not in Providence,” he said, “we’re probably not going to be in Rhode Island.”
There were two problems with Skeffington’s game of hardball. The first is that thanks to—of all people—Curt Schilling, a Boston Red Sox hero 2 who, in 2004, helped the team win its first World Series in 86 years, Rhode Islanders were vehemently opposed to giving any business taxpayer assistance.
In 2010, the state guaranteed a $75 million loan to lure Schilling’s video-game company, 38 Studios, to Rhode Island, only to see the company collapse two years later, leaving the state on the hook. 3 Rhode Islanders have long been skeptical of corporations, 4 and this only furthered their belief that businessmen were not their friends.
Secondly, there was little appetite, even among the citizens of Providence, for moving the team out of Pawtucket, which, after all, is only five miles from the Rhode Island capital. Like too many Rhode Island cities, Pawtucket has seen better days. A city of 71,000, it was once a big textile center, but that was long ago, and no industry has ever replaced it.
The PawSox have become central to Pawtucket’s identity. The team gave the city a connection to New England’s beloved Bosox, and allowed fans to say they’d seen a young Roger Clemens or Wade Boggs before they’d made it to the bigs. It was the one thing Pawtucket had that no other city in Rhode Island could claim.
“This will rip the heart right out of us,” said Pawtucket Mayor Donald Grebien upon learning of the plan to move to Providence. Even the mayor of Providence, Jorge Elorza, sounded less than completely sold. “I look forward to working with the new ownership team and all stakeholders to explore this possibility,” he said.
At which point Skeffington, who had been the driving force behind the move to Providence, died of a heart attack.
Enter Larry Lucchino. Lucchino, who retired as president and chief executive of the Boston Red Sox in 2015—he remains a part-owner—is a legendary stadium builder. A quarter-century ago, as team president for the Baltimore Orioles, Lucchino spearheaded the drive to build Camden Yards in downtown Baltimore, the first modern retro ballpark and a landmark in baseball stadium design.
A few years later, he did it again with the San Diego Padres, building Petco Park in downtown San Diego. As chief executive of the Red Sox, Lucchino oversaw annual improvements at Fenway Park, which have increased revenue without sacrificing the park’s unique character. Indeed, Skeffington asked Lucchino to become part of the PawSox’s ownership precisely so he could take charge of building a new stadium.
With Skeffington dead, Lucchino now became the face of the franchise. As he and several others sought to get an understanding of the dynamics Skeffington had unleashed, it gradually became clear to them that his approach had alienated most of the state, including its government officials—who, they discovered, had no intention of handing over $4 million a year for 30 years to the PawSox. Lucchino concluded that he and the other owners needed to see first if it would be feasible to keep the team in Pawtucket before exploring other possibilities.
Together with the state and the city of Pawtucket, the PawSox conducted a study to gauge how much it would cost to renovate the 10,000-seat McCoy Stadium, a concrete structure built in 1942 that last had a makeover in 1998. They got their answer in January: it was $68 million, while the cost of a new stadium would be only $10 million more.
Three months ago, the PawSox told the Providence Journal that the new stadium would be a replica of Fenway Park, including the famous Green Monster in left field. This would obviously help players in the Red Sox minor league system acclimate to Fenway, but it would also be appealing to Rhode Island baseball fans, virtually all of whom are passionate Red Sox supporters. In that same article, the PawSox officials said that the team was willing to “make a significant contribution” to the cost of the new ballpark—even though it would be publicly owned. There were no threats.
Finally, in mid-May, the PawSox released the details of the financing, the result of negotiations with Mayor Grebien and Stefan Pryor, Rhode Island’s commerce secretary. The ownership group would put up $45 million, with the state contributing $23 million and Pawtucket $15 million. The city and state would receive a revenue stream that would not only cover the debt service but would probably make it a profitable venture for the government.
The team, for its part, would commit to staying in Pawtucket until 2050. Yes, the new ballpark will have luxury boxes, but the owners have also promised to keep it family-friendly and affordable. The Rhode Island businessmen in the ownership group have agreed to give their profits to charity for the next five years.
Grebien, who retained a soft spot for McCoy, conceded that a new stadium made more sense, and might actually give the city an economic boost. The $45-million commitment by the PawSox, Grebien told me, “is the highest in Triple-A baseball.” One rarely can say this about a sports stadium deal, but this does appear to be a “win-win.”
Alas, the deal, though agreed to by the parties, has not yet been approved by the legislature. That’s not because of opposition but because the Rhode Island legislature had a melt-down over the budget in late June, as the session was coming to a close. It’s possible that the deal might pass in a special session later this year, though most likely it will have to wait until next year.
There are obviously aspects to this story that are unique, particularly the fact that some of the PawSox owners are closely connected to the parent club in Boston. That means their incentives are different from the motivations of a typical major league owner hankering for a stadium deal. And the financial stakes aren’t as high as when the big-league professional teams are seeking public funds.
But the most unusual thing, it seems to me, is that after Skeffington died, the PawSox owners never tried to play one city against another. They understood but didn’t exploit Pawtucket’s emotional attachment to the team, and all the parties acted in good faith to build a stadium without mauling taxpayers.
Jeffrey Loria sure could learn a few things from Larry Lucchino.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
The Miami Herald calculated that the debt financing on just one $91 million bond will cost Miami Dade’s taxpayers an astounding $1.2 billion by the time it’s paid off in 2048.
Surely you remember the famous “bloody sock” game he pitched against the hated New York Yankees in Game 6 of the American League Championship Series that year! As for his subsequent Alt-right career, the less said the better.
The state recovered more than half the money by suing the banks that made the loans.
I know this because I grew up in Providence, and most of my family still lives there.
To contact the editor responsible for this story:
Jonathan Landman at email@example.com