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Wednesday, May 17, 2017

PawSox, city reveal stadium financing framework   Poll

I’m glad I don’t live in Rhode Island.

$45 million from the PawSox for ballpark construction, including an early $12-million cash outlay and $33 million from revenue generated over the next three decades at the ballpark.

$23 million from the state in the form of tax revenue generated in and around the stadium.

$15 million from the city, also in tax revenue generated in and around the stadium.

Jim Furtado Posted: May 17, 2017 at 10:58 AM | 17 comment(s) Login to Bookmark
  Tags: minor leagues, stadium deals

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   1. Cargo Cultist Posted: May 17, 2017 at 12:49 PM (#5457463)
Those taxes are a great way to discourage any business ventures in and around the stadium.

Once again: I love baseball, but public funding for private stadiums is always a terrible idea.
   2. villageidiom Posted: May 17, 2017 at 01:29 PM (#5457524)
Those taxes are a great way to discourage any business ventures in and around the stadium.
An even better way to discourage business ventures there is to have an abandoned department store in a huge lot, bordered on three sides by a highway and a river. That approach hasn't worked very well for developing the surrounding area.
Once again: I love baseball, but public funding for private stadiums is always a terrible idea.

The stadium will be owned by the city. The team lease payment would start at $1 million and increase annually. For comparison, their current stadium lease payment is $35,000.

I'm not in favor of stadium boondoggles, nor am I a fan of Larry Lucchino. But this one at first glance doesn't seem nearly as bad as I'd expected given the discussions leading up to it. ("Not as bad as a horrible plan" is not a ringing endorsement, nor is it intended to be.)
   3. Golfing Great Mitch Cumstein Posted: May 17, 2017 at 05:21 PM (#5457829)
Those taxes are a great way to discourage any business ventures in and around the stadium.


Those aren't new or higher taxes. It's a TIF. Taxes generated by the stadium and any new development/business in a specific area will be designated to pay off the bonds the state and city sell to finance the stadium.
   4. Cargo Cultist Posted: May 17, 2017 at 06:55 PM (#5457911)
So instead of it being new tax monies being given to a stadium, it will be monies from existing taxes collected in the area of the stadium that will go the stadium - instead of to things like education, health care, and seniors? I feel sooo much better about it now.

It still boils down to the public paying for a stadium, and that's always wrong. Why is a state like New Hampshire trying to engage in corporate welfare? Bah.
   5. JJ1986 Posted: May 17, 2017 at 08:35 PM (#5458003)
it will be monies from existing taxes collected in the area of the stadium that will go the stadium - instead of to things like education, health care, and seniors
or instead of being blown on video game companies that lack a solid strategy.
   6. SoSHially Unacceptable Posted: May 17, 2017 at 11:32 PM (#5458116)
Why is a state like New Hampshire trying to engage in corporate welfare? Bah.


Agreed. On the list of horrible tax deals for sports franchises, New Hampshire's giveaway to the PawSox undoubtedly ranks at the very top.
   7. villageidiom Posted: May 17, 2017 at 11:40 PM (#5458118)
So instead of it being new tax monies being given to a stadium, it will be monies from existing taxes collected in the area of the stadium that will go the stadium - instead of to things like education, health care, and seniors?
There are virtually no existing taxes being collected in the area of the stadium. There's an abandoned department store. There are parking lots for the abandoned department store. There's an abandoned tire center affiliated with the abandoned department store, with its own abandoned parking lot. There's a river. And there's I-95.

When the area is developed there will be sales taxes on goods and services, in line with existing sales tax rates, except the proceeds will go toward a portion of the stadium construction costs.

I get your general objection and I agree. But your general objection has been off the mark regarding this specific deal, at pretty much every opportunity. You don't even know what state it's in.
   8. Jose is El Absurd Pollo Posted: May 18, 2017 at 01:06 AM (#5458141)
I think Rhode Island voters would overwhelmingly support raising New Hampshire taxes to pay for the stadium.

Cheap shots aside vi a question since you seem clued in, what do the PawSox mean to the city? My impression is that Pawtucket has always rallied around the PawSox and I think there is a cultural benefit to having a club like that as there is with great museums or public parks that make spending some public money on them worthwhile. Obviously making sure other things are paid for first is important.
   9. Cargo Cultist Posted: May 18, 2017 at 03:31 AM (#5458152)
Sorry. One piece of goddamned Yankee territory is much like any other to me. We have counties in Texas bigger than some of them.

Public funding of baseball stadiums is a bad idea anywhere, regardless.
   10. Golfing Great Mitch Cumstein Posted: May 18, 2017 at 06:04 AM (#5458155)
So instead of it being new tax monies being given to a stadium, it will be monies from existing taxes collected in the area of the stadium that will go the stadium - instead of to things like education, health care, and seniors? I feel sooo much better about it now.


Well, your original implicit claim was that higher or new taxes to pay for the stadium was bad for business, when there will be no new taxes. That would have been clear if you RTFA. Also, TIFs are commonly used. Not saying they are good or bad, but cities use them to try to develop a specific area.
   11. dave h Posted: May 18, 2017 at 07:10 AM (#5458165)
The question is whether there will be new tax revenue, or if this will just shift existing spending to that area. I believe the latter is what is generally observed, in which case they really would be directing spending away from other priorities. Maybe that area is so underdeveloped there really is an opportunity to create real economic growth, but it's usually an illusion.
   12. Fernigal McGunnigle Posted: May 18, 2017 at 08:09 AM (#5458182)
The question is whether there will be new tax revenue, or if this will just shift existing spending to that area.
For a city like Pawtucket, I suspect that the calculations are slightly different. If we assume that $20 spent at or around the new stadium is just $20 that wasn't spent elsewhere, we can't necessarily further assume that that $20 would have been spent elsewhere in Pawtucket. There's not a ton there, and it borders on the much larger Providence, so it's likely that there would be a fair amount of money spent on the PawSox that wouldn't otherwise be spent in Pawtucket.

(This doesn't work so well for most MLB cities or for larger minor league cities, where any money not spent around the park would likely just go elsewhere in town.)
   13. villageidiom Posted: May 18, 2017 at 09:38 AM (#5458241)
Cheap shots aside vi a question since you seem clued in, what do the PawSox mean to the city? My impression is that Pawtucket has always rallied around the PawSox and I think there is a cultural benefit to having a club like that as there is with great museums or public parks that make spending some public money on them worthwhile. Obviously making sure other things are paid for first is important.


The distant pulse I get is that Pawtucket overwhelmingly wants the team to stay, but nobody in RI - not even the people of Pawtucket* - want a boondoggle. They've held the ground all along that they're not bankrupting the city to line the pockets of the PawSox. Lucchino started with "We need to move to Providence because Pawtucket isn't economically viable, and we need the stadium gifted to us, and the land, too." Then they moved to "Hey, maybe Worcester would take us," which most in Worcester laughed at. They've called his bluff at every turn.

In the end, Pawtucket might get a guaranteed tenant for 30 years, paying 29x the rent they're currently paying, in a stadium the city will own 100% but will have been paid for almost 100% by the users of the stadium: the team and the fans. Normally it's the other way around: the team gets the stadium at the city's expense. That's why normally I'd agree with CC on this.

* Pawtucketians? Pawtucketonians? Pawtuckers? Pawtucketeers? Pawtucketyrians? Pawtuckii? Pawtucketaters?
   14. villageidiom Posted: May 18, 2017 at 09:58 AM (#5458259)
For a city like Pawtucket, I suspect that the calculations are slightly different. If we assume that $20 spent at or around the new stadium is just $20 that wasn't spent elsewhere, we can't necessarily further assume that that $20 would have been spent elsewhere in Pawtucket. There's not a ton there, and it borders on the much larger Providence, so it's likely that there would be a fair amount of money spent on the PawSox that wouldn't otherwise be spent in Pawtucket.

(This doesn't work so well for most MLB cities or for larger minor league cities, where any money not spent around the park would likely just go elsewhere in town.)


Concur.

The current park is bordered mostly by a trucking depot, a middle school, and residential property. There's really been no material development in the area because the latter two will affect zoning pretty harshly, especially in New England. The new site is pretty limited for development because it has the highway and river abutting it, but (a) there is some development opportunity there, and (b) it's just across the river from an old New England mill town retail business district - many small buildings tightly packed, mixed use, etc. - that isn't doing great but could be helped a bunch by a nearby attraction. I think today people go to the game, and then they go home, because everything else is inconvenient in the current spot. There is more potential near the new location IMO.
   15. SoSH U at work Posted: May 18, 2017 at 10:08 AM (#5458272)
Sorry. One piece of goddamned Yankee territory is much like any other to me. We have counties in Texas bigger than some of them.


Damn Cargo, how many times have you been told to put down those Texas-produced geography textbooks, the ones where the U.S. is comprised of six states: Texas, Yankee, Kinda Yankee, Libtardia (negotiations are ongoing over its annexation of Austin), Nascar and Not Texas.

But yes, Texas doesn't waste taxpayer dollars on minor league baseball parks. Texans waste it on high school football stadia that don't work. Or maybe it's Oklahomans. I get all you oil-drilling, Alex Jones-listening, cattle ####### confused.

   16. zack Posted: May 18, 2017 at 10:24 AM (#5458287)
The current deal seems okay as far as stadium deals go, I'm not versed enough in municipal bonds to say.

But wow, that Providence proposal is breathtaking for its audacity.
   17. dave h Posted: May 18, 2017 at 11:37 AM (#5458372)
This may very well be the exception. I'm at least convinced that it's close enough that the details matter. There are just a lot of accounting issues that often make these look like better deals for the cities and states, and some of those are still present here. Do we really think tax revenue in Pawtucket will go up by the stated amount? In Rhode Island as a whole? What is the cost of issuing these bonds (mostly opportunity cost, probably)?

But the idea that the team is paying a big chunk, and the city will own the stadium and have a decent lease, is a good start.

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