Estimates rise amid wait for Sox funds plan
By Meg Vaillancourt, Globe Staff, 02/09/00
It's been nine months since the Boston Red Sox unveiled their proposal for
a new Fenway Park, and during that time the estimated price tag has jumped by
as much as $50 million, due largely to increased site preparation costs.
The project - which includes a new $350 million ballpark, two large parking
garages, major public infrastructure improvements, and the purchase of the
proposed 14-acre ballpark site - is now expected to cost about $600 million.
Interest rates have climbed since the team announced the new ballpark's
design, adding tens of millions of dollars to the project's bottom line.
Opponents of the new park have spent the intervening months building
coalitions and lobbying politicians to stop the plan.
But nothing will happen as long as the crucial question remains unanswered:
How much will taxpayers be asked to invest?
Still working on their plan, Red Sox officials don't have an answer yet.
Nor will they comment on possible financing options. Despite months of talks,
state and city officials said the team has not asked for a specific aid
"They've discussed a wide range of options, including various tools that
could be used to help finance the project," one political leader involved in
the talks said. "But no one on the team has said we need `X' from the city
and `Y' from the state to do it."
Independent sports analysts estimate the Red Sox may need $200 million to
$250 million from taxpayers to build the project. And whatever the final
public financing package, city and state officials insist they need a way to
recoup at least some of their investment.
But what if the Sox didn't build their own stadium? What if a new city- or
state-run stadium authority built the new ballpark and leased it to the Red
Sox? In the search for financing, some city officials are closely studying
the idea, and a number of other public financing schemes, including:
Create a stadium authority: Under this plan, the city, state or both would
create a stadium authority to build and own the new ballpark, which the Red
Sox would then lease. Used in other states, an authority could finance the
ballpark by selling low-interest, tax-exempt bonds. The team could also
contribute to the construction costs and share in stadium revenue.
Proponents say an authority could assemble the site more quickly, using
powers of eminent domain to declare the area "blighted" and in need of
redevelopment - much as the Boston Redevelopment Authority is assembling 60
acres in the South Boston Seaport District for the Massachusetts Convention
Center Authority. Opponents argue that a new baseball stadium - not to mention
related development such as hotels, shops, offices, and entertainment
facilities - don't meet the criteria of "overriding public use" required
before an area can be redeveloped.
Under one scenario being discussed, a city-run authority would acquire the
site, sell bonds, and build and own the ballpark. To help pay back the city,
the authority could sell off the traditional money-making ballpark operations
- concessions, signage, naming rights, and souvenir sales - to private sector
partners, or share the profits with the state and other private investors.
It is unclear whether House Speaker Thomas M. Finneran would support a
city-controlled authority when the state is expected to contribute millions of
dollars in infrastructure improvements.
Land takings: Mayor Thomas M. Menino and the Boston Redevelopment Authority
could designate the majority of buildings or land within a specific area as
"blighted or substandard." Using the powers granted under Chapter 121A of
Massachusetts General Laws, the city could then give the project's developer
eminent domain powers to acquire the site and exempt the project from specific
taxes and zoning requirements.
Menino has repeatedly said he thinks a new ballpark "can't be plunked down"
in the middle of a hodgepodge neigborhood like the Fenway. He's also hinted
that he might use the 121A designation to acquire more than the 14-acre site
as part of a redevelopment plan for the entire Fenway area.
But critics counter that such an approach would be "politically dangerous,"
given the neighborhood opposition such a massive redesign is likely to
provoke. Linking the ballpark to a large-scale urban renewal project also
could delay construction of the ballpark for years, critics said.
Build public parking facilities: Under this scenario, fees from the
proposed 2,200-space garage would be dedicated to repaying public investment
in the project. Area hospitals, schools, and businesses, combined with Red Sox
fans and customers of nearby nightclubs are expected to provide
round-the-clock garage patrons.
Advocates argue that public investment in a garage should count as
"infrastructure," just as some of the $70 million in state aid given to the
New England Patriots is slated to help pay for parking at the new Foxboro
stadium. Supporters also note the garages could generate millions of dollars a
year in revenue for whoever invests in them.
The Massachusetts Turnpike Authority, which owns a large portion of the
proposed garage site, has indicated it is "willing to be helpful" to the Red
Sox, State House sources said.
Provide tax benefits: Under this plan, city and/or state officials would
create a special tax district in and around the ballpark to capitalize on the
increased property values generated by the investment in the facility. Taxes
collected would be dedicated to repaying the public investment in the project.
The idea, known as tax-increment financing, has been used in other cities
to fund stadium projects. But some city officials are wary of setting a
precedent for earmarking property taxes, the city's largest source of revenue.
Allow additional development: City officials are reviewing ways to help
develop the five-acre parcel that will be left once the current ballpark is
demolished. Although the parcel is now owned by the Red Sox, the city could
reap some profits from commercial development on the site in exchange for
footing land-acquisition costs.
Some officials had hoped the Red Sox would also invest in additional
development, such as a hotel or restaurant, outside the new ballpark's walls.
But team officials have repeatedly ruled out participating in any such
ancillary development schemes.
"We are not looking to become hotel developers or anything like that," said
Red Sox vice president James Healy. "The land we own is an asset we expect to
contribute toward the cost of a new ballpark . . . but we will not be
developing it ourselves."
The Red Sox need more than dollars and sense to come up with an acceptable
financing plan. They also must demonstrate the kind of political acumen the
Patriots failed to display in their decadelong stadium saga.
As with the Patriots, Governor Paul Cellucci and Senate President Thomas F.
Birmingham are seen as generally supportive of the Sox quest for a new
ballpark. Finneran, however, remains skeptical.
Finneran has argued consistently that state funds should not be used to
build sports facilities. But he also has argued that because the Sox play more
than eight times the number of home games as the Patriots do, the economic
activity generated by baseball project may merit a greater public investment.
The state, he said, can appropriately fund "infrastructure costs." Exactly how
the term is defined will be a critical factor in determining how much public
aid the Red Sox can obtain.
It appears the Red Sox hope to reach a consensus with political leaders
before the team announces their financing plan. But the legislative clock is
ticking. Since this is an election year, lawmakers will adjourn at end in
July. That means the Sox will have to outline their financing plan by April if
they want to ensure there's enough time to conduct the public hearings and
formal debate needed before a vote can be taken.
Some think the Sox have squandered valuable momentum they had built up
following their announcement of the ballpark's widely praised design last May
and allowed opponents to become better organized.
"The more time people have to recognize the impact on the neighborhood and
the need for more public resources, the more opposition there is," said Carl
Koechlin of the opposing Fenway Community Development Corp.
But others shrug off the delay.
"In Boston we tend to think that if an issue isn't played out on the front
page every day, nothing's moving," said Patrick Moscaritolo of the Greater
Boston Convention & Visitors Bureau. "The Red Sox learned from the others'
missteps, so they're consulting with state and city officials before they ask
for any money."
The Red Sox refuse to comment on their discussions with state and local
officials. But mindful of the need for public investment, they say they will
consider almost any idea that passes muster with both the city and state.
"We are in a continuing process of meeting with the state and city about
how to approach financing the new ballpark," Red Sox spokeswoman Kathyrn St.
John said yesterday. "Until that process is concluded, no options are either
on or off the table."