Sox urged to step up to the plate
By Meg Vaillancourt, Globe Staff, 03/16/00
With spring training underway, state officials are pressing Red Sox chief
John Harrington to quickly detail his plan to pay for the team's proposed $600
million Fenway Park project.
"I think everyone agrees that time is of the essence now," said
Representative Michael Ruane, chairman of the special committee that House
Speaker Thomas Finneran formed to review ballpark plans.
The team, Ruane said, probably needs to file a financial plan within two
weeks if it expects the Legislature to act before its scheduled adjournment,
"If they don't have a financial plan in front of us by April 1," he said,
"it may be too late to act on it this year."
Ten months after the team unveiled the plan for a new ballpark - and less
than two weeks before Ruane's unofficial deadline - the Red Sox still have not
specified how much public investment they want.
Political officials involved in ongoing financing talks predict, however,
that within four to six weeks the Sox will request between $200 million and
$250 million in public assistance.
In closed-door sessions with state and city lawmakers and with bankers and
financial advisers, the Red Sox are weighing several financing options that
would encourage upfront public assistance by specifying how the city and state
might recoup their investments. According to political officials involved in
the talks, the financing schemes include:
Dividing the estimated $10 million or more a year that would be generated
by the two planned parking garages between the city and state, depending upon
their level of investment. The team may also receive a cut.
Dividing proceeds from the sale and development of the five-acre parcel
that would be left over from Fenway Park, once the new ballpark is built. The
Red Sox, however, have clearly stated they don't want to develop the parcel
Dedicating new nonstadium revenue to help repay the city or state. Such
revenue streams could include increased property, income, and sales taxes in
the Fenway area, and a surcharge on hotels and other area businesses expected
to benefit from public investment in the project.
Dedicating limited in-stadium revenues to repay public investment in the
ballpark, including a cut of the money from concessions, ticket surcharges on
premium seats, signage, and naming rights.
Creating a tax incremental financing district, such as those used in other
stadium financing deals across the country. New tax revenues earned within the
district would be used to pay the debt service on city and/or state investment
in the project.
Charging a buyer's premium if the Red Sox are sold after the new ballpark
is built. The new owner may be required to pay a certain percentage on top of
the asking price, in a lump sum to the city or state, thereby guaranteeing the
public would be repaid for its initial investment.
The Red Sox declined to comment on any financing proposals but expressed
optimism about their prospects.
"We're keenly aware that our elected officials are facing many very
important issues, so we'll continue to work with them to move this forward,"
said Kathryn St. John, spokeswoman for the Red Sox. "But we believe we are
still poised to get it through the Legislature in this session."
One barrier to filing a plan has been the controversy over how to fund the
$1.4 billion cost overrun for the Big Dig project. State lawmakers are under a
tight federal deadline to reach an agreement.
The Red Sox are wary of asking for public aid while the Legislature is
struggling with financial problems at the state's largest and most important
public works project. Team officials appear to be waiting until lawmakers can
craft a temporary solution to the Big Dig deficit.
The Red Sox made a similar decision to wait earlier this year, when
lawmakers were working to resolve Harvard Pilgrim Health Care's financial
Team officials also lost three months late last year as they waited out a
state budget stalemate.
But further delays would come at a cost.
While rising interest rates were built into the team's expectations last
year, further hikes will increase the price tag for the project by tens of
The proposed 2003 timetable for opening the new ballpark has slipped a
year. And unless legislation is passed by July, it's unlikely a new park will
open before 2005, further depriving the Red Sox of the additional revenue the
team says it needs to compete with opponents who either play in new ballparks
or have them under construction.
"It's like trying to thread a very narrow needle," said one official
involved in the financing talks.
Ideally, the Red Sox want at least to negotiate an approach that's
acceptable to the city and state before they go public with a financing plan.
But the Red Sox are also hampered by their own financial constraints.
Critics, including opponents of the team's plan and some local businessmen
interested in buying the Red Sox, argue the $600 million project may be
difficut to finance, even in the best of times.
Skeptics also question how much debt - and risk - the team can properly
assume, given that the Red Sox are owned by a charitable trust.
After months of meetings, Governor Paul Cellucci and Senate President
Thomas Birmingham, both of whom backed a new stadium for the New England
Patriots, are viewed as generally supportive of the Red Sox quest. Both men,
however, have been careful to leave room for further negotiations.
As he did with the Patriots, House Speaker Finneran has ruled out public
funds for the new $350 million ballpark itself. Whether he considers the
team's proposal for two garages as infrastructure, as he did with new parking
lots for Foxboro Stadium, is likely determine how much assistance the House
may be willing to give the Red Sox.
The other key political player, Boston Mayor Thomas M. Menino, one of the
vociferous champions of a new ballpark, has been reluctant to specify how much
the city is willing to contribute toward assembling the proposed 14-acre site
adjacent to the 88-year-old Fenway Park.
Wary of how Finneran used Menino's appetite for the new convention center
to pressure the city into contributing more to acquire the site, the mayor is
carefully weighing his options with the Red Sox. Having urged the Red Sox to
build in the Fenway, Menino insists the city must recoup at least some of its
investment in the project.
But some state officials argue the city's reluctance to specify how much it
will invest in assembling the site has encouraged land owners to adopt a
wait-and-see attitude, rather than negotiate a land-taking price. The Red Sox
have been in talks with some of the major land owners in the proposed site,
but no agreements have been announced.