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Uncertainty looms over land costs

By Richard Kindleberger, Globe Staff, 7/27/2000

he crucial question of land costs that has hung over the new Fenway Park since the plan was unveiled 14 months ago remains after Tuesday's agreement.

But now the uncertainty is a problem for the Red Sox instead of the city. If the $90 million budgeted for land acquisition proves insufficient - as many critics assert it will - the team rather than Boston taxpayers will have to cover the excess.

No one knows whether an average $8.6 million per acre is enough to acquire the 10.5 acres of private property needed for the new stadium. Some of the owners whose property would be taken by eminent domain argued yesterday, as they have in the past, that the money would fall far short.

''I think they're way off balance,'' said Arthur D'Angelo, whose Twins Enterprises souvenir business owns a large chunk of the property needed for the new park. ''I think some of these properties are worth much, much more than they're predicting.''

The $90 million is to cover relocation and demolition as well as acquisition. An additional $50 million that the city had been asked to pay will also be the team's responsibility under the deal reached between the Red Sox, state leaders, and Mayor Thomas M. Menino.

Robert F. Walsh, development adviser to the Red Sox, said his confidence has actually increased that the $90 million will be enough to cover the land costs. He said that's because of progress in talks with the Sage family over a plan that would avert the need to take its Boylston Street Howard Johnson.

The team had planned a parking garage and a service entrance to the stadium on the site. Walsh said the team could save substantially on land costs if it were able to accomplish its needs underground and let the Sages, as planned, build a hotel above ground to replace the existing one.

Walsh acknowledged that putting potential land cost overruns on the team is likely to increase the challenge of financing the project.

''I think any lender is going to look at this and see this as a major factor in their willingness to lend money,'' he said. ''But it is not insurmountable.''

William Sage, speaking in his father's absence, said his family has not had recent negotiations with the team. He said Sage Hotel Corp. would like to help the Red Sox, but not at the expense of its own needs and plans. Sage questioned whether the $90 million would be sufficient in light of numerous development projects and rapidly rising property values in the Fenway.

Peter Kadzis, editor of the Boston Phoenix, agreed that the land taking has been underbudgeted. The weekly newspaper, which with its affiliated businesses occupies two buildings on Brookline Avenue in the path of the new stadium, has run numerous stories challenging the project's cost projections. Owner Stephen Mindich, who is currently out of the country, also has been vocal in his opposition to the Red Sox plan.

''Whether Fenway's built or not, the price of real estate in this neighborhood is going up,'' Kadzis said. He noted that his paper, citing anonymous sources, has reported that land costs are likely to run three to four times the $48.7 million assessed value of the targeted properties. ''That's the starting point.''

Not everyone thinks the team's projections are necessarily off base.

''It's my sense the $140 million should cover it,'' said Samuel R. Tyler, president of the Boston Municipal Research Bureau, referring to the land acquisition and site preparation total. He nonetheless sounded relieved that there will now be a cap on the city's financial obligation.

''For those who are financing the project, there's no certainty there,'' Tyler said. ''So I think that's just an added burden on the Red Sox.''

As agreed Tuesday, the city will float bonds to cover the cost of land acquisition, relocation, demolition, and site preparation. Revenue generated by the new stadium in taxes and user fees are to produce $12.1 million a year to pay the debt service, with the team promising to make up any shortfall.

Twins Enterprises' D'Angelo said he would be willing to consider a deal with the Red Sox that would give his business a prime new retail location to replace its current one on Yawkey Way. But he said there have not yet been serious negotiations.

This story ran on page E01 of the Boston Globe on 7/27/2000.
© Copyright 2000 Globe Newspaper Company.

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