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Sox pitch change in ballpark proposal

Seeking revisions to secure financing

By Meg Vaillancourt, Globe Staff, 12/16/2000

he Boston Red Sox are poised to seek major revisions in the Fenway Park bill passed in July, changes the team says are necessary to obtain private financing for a new ballpark.

The team argues that the proposed changes would virtually assure that it could borrow at least $350 million to build a new facility on a site a few blocks away from Fenway Park. Since both city and state officials rejected calls for similar changes when the Red Sox first proposed them last summer, the team faces huge hurdles in winning the concessions.

The effort to alter the deal approved by the Legislature comes two months after Red Sox chief executive John Harrington announced that he was putting the team up for sale. Securing the ballpark financing could boost the price the franchise ultimately will fetch and help ensure the park is built on the Fenway site favored by Harrington and Boston Mayor Thomas M. Menino.

But the team's continuing difficulties in financing the project raise the possibility that the ballpark may have to be built on a cheaper site elsewhere in Boston, or perhaps outside the city.

According to sources, the team has enlisted advertising executive Jack Connors and FleetBoston Financial president Charles K. Gifford, both of whom helped the team win passage of the ballpark bill. Connors and Gifford declined to comment, but the sources said the two are expected to meet with Menino soon to seek support for several major changes to the ballpark package. The sources said the changes that the team is likely to seek include:

A cap on the team's liability for cost overruns connected to acquiring and cleaning up the ballpark site, a 10-acre area now owned by private landowners whose parcels would be taken under the city's eminent domain powers. The city agreed to spend $140 million for acquisition and cleanup costs, but the team would be responsible for any costs above that.

The Red Sox pushed for such a cap last summer but could not persuade Menino or the Legislature to provide additional funds for cost overruns. Harrington warned last spring that the overrun burden could make the project ''impossible to finance.''

An agreement that would allow the Red Sox to use all the tax revenues generated by the new ballpark to repay the city's investment in the project.

The taxes and parking fees from the ballpark project would raise an estimated $12 million a year - funds that will be used to pay the city's debt service on its $140 million contribution. Over time, those revenues will rise, and the team would like to use any excess above $12 million to help meet its debt service for ballpark construction.

An agreement limiting the team's real estate and linkage payments to the city.

The team currently pays the city approximately $1 million a year in property taxes and will seek to maintain payments at that level after a new ballpark is built.

Additionally, the team wants a written guarantee that the city will give the Red Sox $7 million a year in parking revenues from a new garage the city would build next door to the ballpark. The ballpark legislation presumes the city will share garage revenues, but the Menino administration has been hesitant to guarantee that amount each year.

The attempt to remove the team's liability for cost overruns, limit its real estate taxes, and increase new tax revenues available for the project are all geared to ease the concerns of lenders, who have so far been skeptical about giving the Sox financing.

Indeed, many of the team's supporters are privately saying that unless the current ballpark legislation is revised, the team's new Fenway Park plan could prove to be an impossible dream.

''No one wants to be the guy who signs the death certificate by publicly declaring it, but the [Fenway] plan is on life support,'' said a political source. ''The Sox haven't produced a letter from Fleet saying it's definitely financeable. And there's a reason for that: It may not be financeable under the current conditions.''

During negotiations leading up to the dramatic last-minute passage of the ballpark bill, Menino and state leaders took a hard line with the team when it proposed a similar package of amendments to the legislation. Harrington nearly walked away from the deal when both Menino and state lawmakers insisted that the team bear the burden for all cost overruns.

In July, Connors and Gifford, along with David D'Alessandro, chief executive of John Hancock, helped persuade Harrington to accept the deal and said they would support his effort to secure financing for the team's portion of the project.

Even as he announced in October that the team was for sale, Harrington pledged to continue his quest to obtain financing. At the time, he said that obtaining a financing package would make it more likely that the team would remain in the Fenway and clear the way for a new owner to complete the ballpark project.

''By pointing out that he's set up the framework for a new ballpark deal and demonstrated that there's sufficient political support to get it done, he can maintain a high asking price for the team,'' said one source tracking the sale of the Red Sox.

But the surprise announcement that the team would be sold also led skeptics to suggest that the Fenway project might be too expensive, and that a new owner might prefer to start the process over at another site.

Yesterday, Red Sox supporters said that although Menino has opposed any additional city aid for the team, the threat that a new owner could take the team out of town might prompt him to reconsider. But so far, there's been no indication that the mayor is willing to give the team any more financial assistance, especially given the resistance to the project by members of the Boston City Council.

''The legislation doesn't have a deadline, so it could remain on the shelf until the team is sold,'' said one executive who supported the ballpark bill. ''Then a new owner with deeper pockets could either choose to keep the current deal and make it work by accepting the risk of cost overruns - or he could start all over again on Beacon Hill and propose another site. But that would delay the opening of a new ballpark and therefore present its own set of problems.''

This story ran on page A01 of the Boston Globe on 12/16/2000.
© Copyright 2000 Globe Newspaper Company.



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