City should get more from Sox, watchdog says

Yawkey Way, a city street, is turned over to Red Sox fans, beer sellers, and other concessionaires on game days. JOHN TLUMACKI/GLOBE STAFF

The City of Boston should demand significantly more money from the Red Sox on game days, when the team closes a public street, Yawkey Way, and turns it over to beer vendors and sausage sellers, according to a stern warning from the state inspector general.

In a letter sent last week, Inspector General Gregory W. Sullivan also said the city should seek a better deal with the ball club for the lucrative seats atop the Green Monster, the familiar left field wall. The city gave up air rights over Lansdowne Street to create those seats in the century-old ballpark and should claim more income when a new financial agreement is drawn up after the 2013 season, he said.

Sullivan urged city officials to determine how much money the Red Sox have made using public property since 2003, when the team signed a relatively low-cost lease for the streets. The city should negotiate a better deal, he wrote.

“Yawkey Way and Lansdowne Street are public property,’’ Sullivan said yesterday in an e-mail to the Globe. “The public should receive fair market value for the use of its property.’’

In his letter to the city, Sullivan also pushed Boston officials to seek compensation from the ball club for the game-day takeover of Van Ness Street, used as private parking for players, team staff, and others connected to the team.

The inspector general sent the letter after the Globe published a story in November disclosing details of the lease arrangement, which had never before been made public. The article estimated the Red Sox had made $45 million from the use of Yawkey Way and Lansdowne Street as part of a lease that cost the team an average of $186,000 a year.

The November Globe report was the work of the Initiative for Investigative Reporting in the School of Journalism at Northeastern University. The letter sent last week by the inspector general’s office was first reported on the website of Commonwealth Magazine.

The inspector general does not have the authority to force the city to charge the Red Sox more for the use of public property, but the office can add public pressure as the two sides forge a new deal.

The Red Sox declined to discuss the inspector general’s letter or any element of the team’s agreement to use Yawkey Way and Lansdowne Street. The streets are leased to the team by the Boston Redevelopment Authority.

“Because we will be discussing the renewal of our licensing agreement with the BRA and the city, it would be inappropriate for us to make any comments at this time,’’ said team spokeswoman Zineb Curran.

Mayor Thomas M. Menino has defended the arrangement, noting that improvements at Fenway Park over the last decade have paid dividends for the city in the form of real estate taxes, jobs, and increased business near Fenway.

“This is a brand-new concept that has never been tried before,’’ Menino said in a statement yesterday. “We’re aware that there are issues. We will sit down with the Red Sox in the very near future and work out a deal.’’

The original agreement has its origin in 2002, when John Henry’s ownership group took over the Red Sox. City officials were eager to keep the team at Fenway Park. To expand the cramped ballpark, the team looked to surrounding city streets.

In order to lease public land to the Red Sox, the city turned to the redevelopment authority, which has broad powers as an urban renewal agency. The authority seized the space from the city by eminent domain, declaring that Lansdowne Street and Yawkey Way were in an area of urban blight.

On Lansdowne Street, the BRA gained the permanent right to lease the air rights where the Green Monster seats now stand. The blacktop of Lansdowne Street remains in control of the city and on game day remains open to the public.

Yawkey Way is different. The BRA gains control of the street only on game days at Fenway. The Sox close a block of Yawkey Way, with ticket gates at each end. The block becomes a baseball street party, with peanuts, Cracker Jacks, and beer for sale to the almost 38,000 fans with tickets to the game. Outside vendors and the general public are barred from the street.

But that agreement is set to expire with the 2013 baseball season.

In order to lease the street again to the Red Sox, the BRA would have to declare it a blighted area and seize it again by eminent domain.

“Such a declaration may expose the BRA to a legal challenge,’’ Sullivan wrote in his letter, adding that it would be difficult to characterize Yawkey Way as needing urban renewal.

That may force the city, he wrote, to seek special approval from the Legislature to lease the rights to Yawkey Way.

Regardless of what happens, Sullivan urged the city to seek a more lucrative lease. The original deal was based on an appraisal commissioned by the redevelopment authority that called for the Red Sox to pay $165,000 the first year, with annual increases set by the Consumer Price Index.

The redevelopment authority plans to sign a new agreement with the Red Sox for the 2014 season, said agency spokeswoman Susan Elsbree.

“We don’t expect it to be the same deal as the past 10 years,’’ Elsbree said. “Clearly, this has been a success, and the public needs to share in the success.’’