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Sox CEO sees gains on land for new Fenway

But Menino still skeptical of plan's overall cost to city

By Meg Vaillancourt, Globe Staff, 6/18/2000

ith six weeks remaining before state lawmakers adjourn for the year, Red Sox CEO John Harrington yesterday tried to push the team's plans for a new ballpark by outlining specific revenue streams that would ''more than fully repay'' the $275 million in public aid the team wants for the Fenway Park project.

In a bid to win support from Mayor Thomas M. Menino, Harrington said he expects to announce soon an agreement with owners of a Boylston Street hotel to relocate it from land needed for the new park to land the team owns near Brookline Avenue. He said the move would lower the amount of money the city would have to pay to buy the ballpark site.

The team is also negotiating with the D'Angelo family, owners of the nearby Twins souvenir shops. Harrington said he has discussed relocating the family business to new sites just outside the ballpark and that he has offered to guarantee the D'Angelos at least as much in sales at the new locations as they currently make.

Menino has urged the team to work with the D`Angelos and the Sage family, owners of the Fenway Howard Johnson's Hotel. The two landowners control about 37 percent of the ballpark site, located adjacent to 88-year-old Fenway Park.

''The mayor suggested we work with these two key landowners, and we're close to a preliminary agreement to relocate the hotel, which will help put a collar around the city's land assembly costs. And we hope we'll be able to reach a similiar agreement with the D'Angelos,'' said Harrington. ''We've also developed a menu of options that clearly demonstrate ways the public can recoup their investment in this project.''

But Menino, who in recent months has moved from being the leading champion of a new ballpark into a major stumbling block for the team, dealt Harrington another blow yesterday. In a telephone interview, the mayor balked at several of the team's proposed payback proposals, prompting ballpark boosters to speculate that his objections could easily thwart the Red Sox's ballpark bid this year.

''What the Red Sox have outlined is a good deal for the state but it's not a good deal for the city,'' Menino said. ''This kind of press-release-a-day isn't going to get a new ballpark built.''

The mayor has demanded that the city not lose any money on its $140 million investment, which would mean that the Red Sox must find a way to guarantee a $12 million annual revenue stream. Speaking yesterday, Harrington suggested a range of financing options that, he said, together add up to $20 million annually. Among the possibilities:

Game day parking surcharges in the Fenway area.

Surcharges on luxury suite patrons.

A slight hike in the city's hotel tax.

Creation of a special higher tax district around the ballpark.

New property taxes generated by development of the current ballpark site.

Menino, however, declined to discuss the specific proposals outlined by Harrington yesterday. Although he insisted he still wants a ballpark deal this year, Menino warned that the team's proposal for creating a new tax district may not fly on Beacon Hill.

''Any new taxes have to be approved by the state and we have a no-new-taxes governor,'' the mayor said.

But asked if he would support city parking surcharges, over 90 percent of which will be paid by fans who live outside Boston, and ticket surcharges, Menino scoffed: ''Who would have to impose those? The mayor of Boston will. The point is the fans will pay more and the only one who will make money will be Major League Baseball.''

Harrington said the Red Sox plan calls for the team to invest more in its park than any other team in major league baseball history. The team's partners, he said, would have a hard time financing the $352 million they would contribute to the $627 million project.

But he conceded fans would also be paying more to see games in a new ballpark. Although Red Sox tickets are already the most expensive in the league, Harrington acknowledged the team expects to impose higher prices in the new ballpark. He stressed, however, the price hikes would be less than the increases in recent years.

In the struggle to find ways to pay back public investment in the project, the team is weighing a $1 a ticket surcharge. But wary of alienating the team's loyal fan base, Harrington said he considered the ticket surcharge ''one of the last'' options the Red Sox hope to take.

''We have two goals: remaining competitive and keeping the game affordable,'' Harrington said. ''I'm not ruling [a ticket surcharge] out, but we really have to keep the game affordable for working families.''

Many of the financing options have been discussed with state and city officials who have been meeting with the Red Sox for months. Harrington has attempted to reach Menino by phone and letter to discuss additional payback options, but he said he has not been able to talk with the mayor since their last meeting on May 9.

''I've asked for a meeting but the mayor has not been able to schedule one at this point,'' Harrington said. ''We hope that now we can do what the mayor suggested a few weeks ago, and lock ourselves in a room until we come up with a deal.''

Menino flatly denied that he has failed to respond to the Red Sox requests. ''I have not received any calls from the Red Sox and I've met with them whenever they have asked,'' Menino said, adding that he was willing to meet with team officials this week. ''But they have to come up with more guarantees for the city.''

In the past, Menino has rejected some of the team's main payback proposals, including $6 million in property taxes generated by development on the outfield of the current ballpark, although he had previously said he would support the idea.

Yesterday, Harrington said the city should credit the team with the additional property taxes generated by the development. Without a new ballpark, he said, the team would continue playing on the current field and the 5-acre parcel would not be developed.

Menino and other officials have urged the team to accept new partners as a way of reducing the public invesment needed in the project, but Harrington ruled out the idea yesterday as ''economically unfeasible.''

The team's current limited partners, he noted, have received no return on their investment for the past six years. Because new partners would also be liable for about $200 million in debt that the team would assume to build the new privately owned ballpark, it's unlikely they would see a return on their investment for years, he said.

''It's very difficult to find partners who would be willing to invest significant money in a deal when they know they will not get a reasonable return on their investment,'' Harrington said. He also shrugged off the idea of offering the public ''wallpaper stock,'' saying it would be unfair to deceive fans who would buy the stock into thinking their holdings would increase in value.

In touting the team's plan, Harrington stressed the ''public benefit'' to Massachusetts taxpayers investing in a new ballpark while the team is controlled by the Jean R. Yawkey Trust. When the team is sold, presumably after a new ballpark is built, he noted the proceeds from the trust's 53 percent ownership stake will go to a foundation set up before her death in 1992.

If the trust's shares generate $200 million to $300 million from the sale of the team, Massachusetts charities could reap up to $30 million a year ''forever'' under the terms of Yawkey's will and trust, Harrington said.

Unlike the separate foundation set up years earlier by her late husband, Tom Yawkey, which funds several large out-of-state charities, including a nature preserve in South Carolina, about 70 percent of the funds distributed to charity by Jean Yawkey's foundation are located in Massachusetts.

This story ran on page A01 of the Boston Globe on 6/18/2000.
© Copyright 2000 Globe Newspaper Company.

 

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