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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 package.

"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."

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