She came up with a fiscally responsible plan to keep the minor league baseball team in Pawtucket. Worcester offered more. So now, pending local and league approvals, it’s hello “WooSox.” But from a prudent taxpayer perspective, no PawSox is no rap on Raimondo.
She did her job. She negotiated a deal, reportedly agreed to by the team, which called for 54 percent of the financing to be private. That plan passed the state Senate but stalled in the House. In June, Rhode Island lawmakers approved a last-gasp deal that was signed by Raimondo. It required the team, not Rhode Island taxpayers, to assume any risks associated with a new ballpark.
But by then, Worcester was throwing much more at the Triple A affiliate of the Boston Red Sox. (Disclosure: Boston Red Sox owner John Henry owns the Boston Globe. Former Red Sox president and CEO Larry Lucchino now heads the Pawtucket franchise ownership group.)
According to CommonWealth magazine, Worcester has agreed to build a new $86 million stadium, with the team contributing about $36 million over the next 30 years. Worcester will own the stadium, reports CommonWealth, “but the ball club will operate it and retain all revenues, including ticket fees, concessions, liquor sales, branding rights, premium seat sales, broadcast rights, merchandise sales and naming rights.” Also according to CommonWealth, Worcester will borrow about $100.8 million in two separate bond offerings to cover the cost of ballpark construction. The city expects to cover debt service cost with tax revenue associated with development of the ballpark and surrounding area, which includes two small hotels, housing, and commercial and restaurant space.
According to the Globe, the state will also provide $32.5 million for infrastructure improvements, and another $2.5 million in housing tax credits for development beyond the stadium project.
The Worcester Business Journal sent ballpark financing details to 10 economists and stadium experts around the country. The only positive analysis came from Andrew Zimbalist, the Smith College professor who was hired by Worcester to assess the WooSox plan. In a previous life, Zimbalist coauthored a book whose primary conclusion, according to its Amazon listing, is that sports teams and facilities are not a dependable source of local economic growth and employment, because the public subsidy ends up exceeding any financial spinoff. However, Zimbalist told CommonWealth that the Worcester deal is different from others he dissed “because it comes with a broader development proposal that will generate revenue to help pay for the stadium.”
That’s Worcester’s gamble right now. Perhaps it will pay off and produce the renaissance promised by state and city officials.
But Rhode Island, a state of one million people, with a budget of roughly $9.3 billion, was in a different place. The “ghost of 38 Studios” probably factored in — a reference to the state’s use of $75 million in loan guarantees to persuade former Red Sox pitcher Curt Schilling to locate his video company in that state. A few months later, the company filed for bankruptcy.
Don’t taxpayers want elected officials to learn from experience, good and bad? Shouldn’t there be limits to how much a state or municipality is willing to give away in the name of economic development? Yes, Boston wants Amazon to locate a headquarters here. But how much the city is willing to give up in tax revenue is worthy of debate.
Raimondo sought a reasonable balance between ruling out any public subsidy and giving away so much that the public assumes all the risk. That seems like a good place for a governor to be.