Despite objections from residents and one board member, the Boston Redevelopment Authority on Thursday authorized a $7.3 million deal to let the Red Sox use two public streets near Fenway Park for gameday concessions and seating over the Green Monster.
The arrangement grants the Red Sox permission to close a 17,000-square-foot strip of Yawkey Way for concessions for as long as the baseball team plays at Fenway. It also gives the team air rights over Lansdowne Street to allow for seating over the ballpark’s famed left-field wall.
The BRA’s board approved the agreement after a lengthy discussion that included opposition from one member who argued the authority could have negotiated a better deal.
“In my gut, I feel like we’re making a mistake by giving this away,” saidTimothy Burke,the lone board member to vote against the deal.
He said the BRA should have pushed for more money and structured the deal so that the city would get a of percentage of revenue from the team’s sales.
But the BRA’s director, Peter Meade, defended the agreement, saying it guarantees fixed payments to the city and eliminates the risk that the Red Sox’s contributions could suddenly drop because of a negative turn in the team’s financial performance.
“We’re getting a top-of-the-market price,” Meade said. “We determined the city is better off having a regular revenue stream.”
Under a plan detailed last Friday, the club would pay for the lifetime benefits in annual installments of about $734,000 over the next 10 seasons — four times the fee the city previously charged the Red Sox for the use of the street and air rights each year.
The proposed contract between the Red Sox and the BRA differs significantly from the original pact, signed before the 2003 season. Unlike the first deal, the new agreement is not a fixed-term lease. It is a limited easement on Yawkey Way and a purchase of air rights over Lansdowne Street. Part of the seating section on top of the Green Monster wall in left field extends into the space over Lansdowne.
Under the first deal, the Red Sox received a steep discount because a real estate firm hired by the BRA based its Yawkey Way appraisal on lease rates for pushcarts in shopping malls. On Lansdowne Street, it relied on nearby property values, but reduced its valuation by 75 percent, reasoning that there would be no commercial market for the air rights.
The result was a $150,000 annual price tag for Yawkey Way and a fee of just $15,000 for Lansdowne Street.
The prices increased slowly over ensuing years, tracking changes in the local consumer price index.
But Red Sox revenue rose much more rapidly over those years, partly because of steep ticket prices for Green Monster seats.
In the latest agreement, the BRA arrived at a purchase price for the Yawkey Way easement by referencing rental rates for retail space in the Fenway neighborhood, which it said average$60 per square foot annually. The agency deemed a fair rate for the Red Sox to be roughly $20 per square foot, since the club uses the street no more than a third of the time.
The BRA said the real estate market suggests annual rent represents 7 percent of a reasonable purchase price, so it charged the Red Sox slightly less than $4.9 million.
On Lansdowne, the authority said it used the going rate for development rights in the area, about $80 per square foot, to set a purchase price of just under $2.5 million.
The principal owner of the Red Sox, John W. Henry, is purchasing The Boston Globe and related properties from The New York Times Co. for $70 million.
The $7.3 million deal with the team has failed to satisfy some critics. On Wednesday, the Boston Finance Commission urged Mayor Thomas M. Menino to block a vote on the deal. The commission’s executive director, Matthew Cahill, wrote a letter arguing the agreement has not been properly vetted and “will shackle generations of Bostonians to an agreement that over time will prove to be financially irresponsible.”
Cahill said the BRA was attempting to “give away rights to a public street without reasonable public notice, without public advertisement, and without utilizing a public process.”
Menino declined to intervene, saying the city is getting a fair price.
Last night, Meade noted that the agreement includes the cost of property the city took from the Red Sox for a new public road to connect Boylston Street and Yawkey Way.
“We owe the Red Sox $2.6 million,” Meade said. “Frankly, we don’t have $2.6 million.”Casey Ross can be reached at email@example.com.