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Ballpark plan hits a critical stretch
By Meg Vaillancourt, Globe Staff, 7/17/2000
The Red Sox will pay $350 million to build the new Fenway Park and cover cost overruns.
The state is willing to invest about $100 million in infrastructure improvements in the Fenway area as part of the project.
The major stumbling block is how to meet Mayor Thomas M. Menino's demand that every dollar the city invests in the project be repaid.
"At this point, it's all about the city's payback," said one official involved in the talks. "The question is whether the governor, the Senate president, the speaker, and the mayor can agree on how to do it. If they can't, it's over."
Menino has said the city will need about $9 million a year to recoup the $120 million he said the city will invest in acquiring the proposed ballpark site. And after intense negotiations involving the mayor, Governor Paul Cellucci, Senate President Thomas Birmingham, and House Speaker Thomas Finneran over the past few weeks, a financing plan is emerging that could meet Menino's dollar-for-dollar payback requirement.
There is no agreement yet, but according to sources, the four leaders are focusing on: a .05 percent increase in Boston's hotel tax, a parking surcharge, and the transfer to the city of sales and meals taxes now collected by the state.
The hotel-tax increase would raise about $2 million a year. Since it is already on the books for the new convention center project, Cellucci said he would support it because he would not be breaking his "no-new-taxes" pledge.
The state has already given the city the authority to collect the additional hotel tax, but it has not been imposed because it has not been needed for the convention center. Birmingham and Finneran have both signaled they would be willing to transfer the tax to the ballpark project. Menino, however, wants reassurance it won't be needed to cover land costs for the convention center.
Another idea is to create a special Fenway District, similar to the one set up for the new convention center. Under this proposal, the city would retain new sales and meals taxes normally collected by the state within the district. This move would raise an estimated $2 million to $3 million a year for the city.
While neither legislative leader has formally agreed to the plan, Birmingham and Finneran are seriously considering it, according to sources familiar with the talks. Menino and Cellucci both support the creation of a special district.
Parking fees are also likely to be part of any ballpark financing package, but it's unclear how they would be imposed. Menino has proposed a 35 cents-a-space citywide parking surcharge, which could raise up to $12 million a year. Late last week, Birmingham endorsed the concept in a meeting with the mayor. However, Cellucci has threatened to veto such a measure, arguing it is a new tax on commuters.
City officials contend that employee and weekend parking could be exempted and that the fee could be imposed on a sliding-scale basis, with downtown garages paying more than open-air lots. Since other cities and towns could impose similar fees to fund projects in their districts, there may be an appetite for the plan among rank-and-file lawmakers.
But it would take a two-thirds vote to override Cellucci's promised veto. House and Senate leaders are concerned that with so little time remaining in the session, there isn't sufficient support for the plan to mount an override. Finneran is also viewed as leaning more toward user fees.
Nonetheless, city and state leaders could adopt a more limited parking surcharge plan that would be imposed only on game days in the Fenway area. The team estimates that plan could raise about $3 million a year.
Cellucci said he supports the idea, and since Birmingham and Finneran endorsed a similar deal for the New England Patriots, they are seen as possible converts. Only Menino has publicly opposed the surcharge, arguing it would be a double whammy for Sox fans, who already pay the highest ticket prices in the major leagues.
Cellucci has also called for the state to build a large garage as part of the Red Sox ballpark plan. Under his proposal, the state would use parking proceeds to pay for construction of the garage. Instead of keeping the additional profits, the state would then turn over the estimated $4 to $6 million a year to the city and the Red Sox.
Birmingham and Menino are supportive, but Finneran has ruled out that idea, declaring that whoever pays for the facilities should keep all the revenues.
Other financing schemes have received mixed reactions from the four political leaders. The state leaders may consider a $1-a-ticket surcharge as a "user fee" similar to the one imposed at the Wang Center to fund renovations, but Menino is against it. Such a surcharge could raise $3 million for the city.
Cellucci, Birmingham, and Finneran are also open to using new property taxes to help cover the city's investment, but here again, Menino is opposed. Under this option, the city would count the $6 million a year in taxes generated by development on the current outfield as part of its payback.
Supporters note that without a new ballpark, the outfield could not be developed, so new property taxes generated by development on that particular parcel would count as net new taxes. Months ago, Menino supported the idea, but he now says he needs the additional revenue to cover growth in basic city services.
Another option under review is a 10 percent surcharge on luxury box patrons. Menino proposed it weeks ago, and in a recent Globe poll, city residents endorsed the idea. It's estimated the so-called "fat cat tax" will raise about $1.5 million a year.
State leaders have not publicly commented on the proposal, but sports financing analysts argue the surcharge could dampen future luxury box sales. The Red Sox are counting on luxury box revenues to help fund the team's $352 million investment in the project.
The team had estimated it would cost $140 million to acquire the site and prepare it. But Menino has offered the team $120 million, leaving the Red Sox with a $20-million funding gap. Last week, however, all three state leaders signaled they may foot the bill for some site preparation costs as part of the state's infrastructure assistance.
Menino, who directed the team to build in the Fenway, recently told business leaders that the city may also fund some site work. If the city paid for the site preparation as well as acquiring the land, its payback requirement would grow from $9 to $12 million a year.
Red Sox chief John Harrington has been seeking a meeting of the four political leaders for weeks. Last week, state and city officials rebuffed the team, arguing that without a general consensus on a financing plan, there was no point in meeting.
But with time running out on Beacon Hill, ballpark boosters said yesterday they hope everyone will be at the table within days.
"The only way to get an agreement is if all four leaders and the Sox to get in the room together," said one source who has been closely tracking the talks. "They may be close, but that won't count if nothing happens. It's a $627 million ballpark project, not horseshoes."
fter more than a year of talks, the Boston Red Sox see the next few days as do-or-die for their bid to get a new Fenway Park bill passed this year.
With state lawmakers set to adjourn two weeks from today, negotiations between city, state, and team officials this week will determine the fate of the team's proposed $627 million ballpark project for this year. State leaders plan to meet today, and city officials and the Red Sox are expected to join the talks within the next day or two.
There appears to be clear agreement on two of the three key elements of a ballpark financing plan:
This story ran on page A01 of the Boston Globe on 7/17/2000.
© Copyright 2000 Globe Newspaper Company.
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