May 11 - 18, 2000
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Fenway funk
Red Sox brass have nothing new to say about how they'll finance a new ballpark. Is it because they don't have the money to get it done? Or because they plan on robbing taxpayers blind?
by Seth Gitell
Where's the beef?
Despite a recent flurry of headlines detailing a high-profile power meeting between Red Sox officials and government higher-ups, we know no more about the Red Sox' plan to build a new ballpark today than we did one year ago.
There's always the possibility that a secret financing plan has been put into place -- which would amount to a deception of the public rivaling Jim Kerasiotes's lies about the true costs of the Big Dig. But one thing's certain: the Sox have not disclosed how they intend to finance their share of the costs associated with building their proposed 15.5-acre, 44,130-person-capacity stadium. Conservative estimates peg the Sox' share at somewhere between $80 million and $350 million. The $80 million figure is the amount the Red Sox would have to contribute under a plan that involves the city's providing most of the funds -- roughly $420 million. The $350 million contribution would involve a scenario where the Red Sox build the park themselves, but rely heavily on city and state funds for infrastructure, land acquisition, and other costs. The team has said it would cost about $600 million to build the park.
But rising interest rates, increasing property values, and wage pressures have rendered the Sox' original estimates embarrassingly out-of-date. Land-acquisition costs alone would blow the Sox' budget. Sox CEO John Harrington has earmarked between $55 million and $65 million for the costs of purchasing the land needed to build the new park. More knowledgeable observers have said it will cost at least two to three times that much -- not counting the cost of clearing the land. (The offices of the Boston Phoenix, at 126 Brookline Avenue, are part of the property needed to build the new stadium. The Phoenix, which agrees that the players and their fans deserve a new park, has editorialized against the plan, arguing that the new park would be better situated in another location -- such as South Bay.)
At press time, details of the much-discussed summit -- called by Governor Paul Cellucci and attended by Senate president Thomas Birmingham, House Speaker Thomas Finneran, Mayor Thomas Menino, Red Sox chief executive Harrington, and Sox general manager Dan Duquette -- were hard to come by. But Alison Franklin, an aide to Birmingham, described the summit as "preliminary." Despite some breathless media accounts of the meeting that compared it to the powwow that finally brokered the deal for the New England Patriots' new stadium, the public is still in the dark about numbers. At the time of the dramatic State House meeting that kept the New England Patriots from moving to Connecticut, details about the finances involved in that deal were already public. We knew, for instance, that Patriots owner Robert Kraft had agreed the previous year to a Senate bill that saw the state putting in $72 million. We also knew that he was ponying up at least $200 million of the team's money. That's quite different from the situation now. We still don't know what the Sox want from us, nor do we know what they're willing to pay to build a new park.
So what was the meeting about? One possibility is that State House egos were irked by the constant stream of media reports hinting at an alliance between the Red Sox and the City of Boston, and finally decided to do something about it. The Boston Globe has run a spate of stories and columns recently that float trial balloons from City Hall -- ranging from the possibility of a stadium authority to the idea of the city actually owning the park itself. This seems to indicate that the Red Sox have been much more forthcoming with the mayor's office than they have been with the state's political leaders. Of course, Menino's not saying much about any of this. Officially, the mayor's office won't even acknowledge the stories. Prior to Monday's meeting, Menino spokeswoman Carole Brennan said that her boss was in the middle of negotiations with the Red Sox, which she described as "a very fluid process." The bottom line for the mayor, she added, is making sure Boston residents get a return on the city's investment. How much of a return and how speculative the investment are questions neither the press secretary nor the mayor is publicly discussing.
Before Monday's meeting, state officials, incredibly enough, had almost no information from the team. Just days before the high-profile Beacon Hill discussion, for instance, House Speaker Tom Finneran told the Phoenix: "It appears they are still in spring training. Nobody has come up with a specific, concrete document that we can begin to analyze. There's only been the thematic discussion that's been in the newspaper. At some point you have to move beyond the themes and get into specifics."
Birmingham and Finneran are now presumably in the loop. But the public still doesn't know any more about the plans for Yawkey Way than it knew last May, when the Sox announced their plans to build a new park. Why are the Red Sox being so secretive? The team is on the verge of asking for God-knows-how-many millions of public dollars for a new ballpark for their financial benefit, and the public doesn't know anything about it. This, despite the fact that a commitment of funds to the Red Sox entails taking money away from other priorities -- such as health care, housing, the Central Artery Project, and education. If the Red Sox are being so furtive at a time when the team needs public support the most, what guarantee does any of us have that the team will be more forthcoming once it has picked the public's pockets?
The team's lack of public comment on the issue of financing a new park itself tells us something important: the Sox may not have much money to put toward the deal. It's a safe assumption given the unusual governance structure of the team. The baseball team is a limited partnership, the general partner of which is the private Jean R. Yawkey Trust. When it comes to getting new baseball parks built, this financial set-up is the worst possible. In almost every case where a sports team has built a new stadium, there has been a high-profile business owner who can bear the risks of the deal -- and who can pocket the profits afterward. In the case of the New England Patriots, for example, Robert Kraft could do what he needed to do to push a deal, including threatening to move out of state. This opened Kraft up to charges that he would be profiting at the public trough, but he was still able to take the initiative to get the project done -- as he eventually did. He didn't have to answer for his actions to a private trust. The same is not the case with the Red Sox' Harrington, who also serves as trustee of the Jean R. Yawkey Trust.
In a Q&A with Peter Gammons on ESPN.com, the sportswriter flagged the Red Sox' financial position as an obstacle to getting a new ballpark. "The Red Sox are underfinanced, because they are owned by a trust," Gammons wrote. "Their development plan has been linear, at best, and they did not think out the cost of land acquisition in such a small city. . . . They have to go and find a developing partner, but John Harrington has been unwilling to do so."
"You don't have strong leadership here," says one Boston sports insider familiar with the Red Sox efforts. "They show us pretty pictures and put people on planes, but I'm not sure anyone can articulate the plan. That's why we're all left shaking our heads here."
Despite all the PR hoopla, the Red Sox management has been surprisingly passive in its push to get a new park built. It isn't taking some of the basic steps that sports franchises take when seeking to build a new facility. For one, management hasn't opened a marketing center, a matter of routine with projects like this. If the FleetCenter is used as an example for comparison, the Sox are woefully behind schedule. Five years before the FleetCenter opened, and three years before a major construction loan had been finalized, the arena's development team had already sold a number of executive suites and luxury seats, according to the former chairman of the Boston Garden Corporation, Larry Moulter. The fact that the Red Sox are controlled by a trust may account for the passive-aggressive tactics employed by the team. Unlike George Steinbrenner and Ted Turner, who are swashbucklers of the old school, John Harrington is at heart an accountant who answers to faceless overseers.
The legal limits on what a trust can do suggest that if the Red Sox, with the current governance structure, are unable to put together a deal to build a new stadium, then the trust may be obligated to sell the ball club and allow the proceeds to flow to the trust's beneficiaries. "This sounds like a conflict-of-interest question," says Boston University law professor Jules Levine. "If the best course of action to advance the goals of the trust requires the termination of the trust, they have to do that. Even if it means they personally will have to relinquish positions that they enjoy occupying and enjoy doing well in."
Levine's analysis clearly outlines the position Harrington is in. He has publicly stated that the Red Sox need a new stadium to remain competitive. But the trust structure seems to be limiting the team's ability to get the deal done. This puts Harrington between a rock and a hard place. If he wants to get the deal done in the most effective manner, he may have to sell the team and put himself out of business. Who knows? Perhaps Harrington, who is 64, hopes to string out the ballpark game until it's time for him to retire. As for Red Sox spokeswoman Kathryn St. John, she wouldn't comment on how the team's ownership structure might affect a stadium deal. All she would say was this: "We're very comfortable that we're going to get the project done."
If nothing else, the team has engaged in an all-out lobbying blitz to finish the deal. According to records at the secretary of state's office, the Red Sox paid lobbyist John Sasso $105,000 last year to work on getting a new ballpark. Sasso, Michael Dukakis's former chief of staff, received another $31,315 for expenses related to the push for the new park. (One example is the $1040 forked over for a "presentation of plans for a new ballpark" -- though it's not clear who the presentation was for.) Sasso reportedly helped arrange Monday's summit with the governor and the other bigwigs. A host of other consultants -- former Kevin White aide Micho Spring, former state representative Susan Tracy, and Menino confidant, real-estate developer, and former Boston Redevelopment Authority chief Bob Walsh -- have been helping the Red Sox in other capacities. How much money the Red Sox have spent since January 1 is unknown, because the club doesn't have to file another lobbying report with the state until July. Explains St. John: "We're working with our elected officials at the city and state level to develop a plan of finance for the project." Asked whether the Red Sox were getting their money's worth for their lobbying team, St. John replies, "I don't think that's an appropriate question."
The trust structure may hurt the Red Sox in still other ways.One of the most recently floated plans from City Hall -- a municipally owned ballpark -- would make it easier to seize the land needed to build a new park, one of the biggest obstacles the Red Sox now face. Legal observers say the direct involvement of the city is necessary to get over this hurdle. According to the current outline, the Red Sox hope to build the park on land currently occupied by private businesses. Taking privately owned land is a difficult thing for another private enterprise to do legally. But it's somewhat easier for the government to take land by eminent domain -- although not always a sure thing, because the land-taking could violate the state constitution if it doesn't sufficiently benefit the public.
But under this plan, the team would probably lose naming rights and other profit opportunities to the city. The whole reason the Red Sox say they need a new stadium is to remain competitive. If they go along with the city plan, they lose important income streams. As a trust, the team may not be legally allowed to exchange one of its greatest assets -- the current Fenway Park -- to become tenants of a city-owned park. The smart path for Harrington, given these choices? Delay.
But the more the Red Sox delay, the more the state's lawmakers focus on other priorities. "I don't fret too much about the Red Sox and their future," says Finneran. "My job is to look very skeptically at anything that is asked of us. We have to make sure it is in the public interest." Both Finneran and Birmingham say the Red Sox come lower on the list of state priorities than other issues. "Within the budget, there is health care and education and tax policy -- all of which surpass the Red Sox situation," Finneran notes. Says Birmingham: "Education is my top priority. Health care is a close second. The Red Sox I view as [I do] any other economic-development project."
If the Red Sox can't get the deal done on their own, that means Harrington will have to find an equity partner for the team -- or put it up for sale. The same names continue to resurface as potential buyers. Joseph O'Donnell of Boston Concessions; Steve Karp, the property developer; and Terry Murray of FleetBoston have all been mentioned either individually or as a group. The name of Boston philanthropist David Mugar is also frequently floated as a potential buyer. Another possibility: one of the Young Turks in Boston's booming high-tech industry could purchase the team -- as happened to the Seattle Seahawks and the Portland Trail Blazers (Paul Allen of Microsoft), the Washington Capitals (Ted Leonsis of AOL), and the Dallas Mavericks (Mark Cuban of Broadcast.com) in recent years.
One intriguing clue to the difficulties the team faces right now surfaced in an April 22 article by Globe sports columnist Will McDonough. "If I were running the Red Sox, I'd be dealing with the City of Revere already, trying to get a park built on Suffolk Downs property on the East Boston line," McDonough wrote. "If Boston doesn't think it's a big deal, build it somewhere else and let the politicians explain about how downtown Boston became a wasteland when the Sox pulled out of town." (Many would argue that the "downtown" land the Red Sox want to build on is of far greater development value to the city than a new ballpark and a couple of garages.) Given that McDonough is known to be close to Harrington, the passage raised eyebrows on a number of fronts. Some observers read it as a shot across the bow from the Red Sox to Menino.
If nothing else, McDonough dredged up an interesting chapter from the Red Sox' past: former part-owner Edward G. "Buddy" LeRoux once considered moving the team to Suffolk Downs, which he'd owned at one point. But T.D. Thornton, a spokesman for Suffolk Downs, tells the Phoenix that he doesn't know of any new plans to bring the Sox to the East Boston-Revere line. Last May, on WBZ-TV's Sports Final with Bob Lobel, LeRoux noted that Red Sox studies from the 1980s showed that a new park had to be built outside the city, needed to accommodate between four and four and a half million fans a year, and had to be easily accessible to the bulk of Sox fans -- who live in southern Massachusetts, Rhode Island, and Connecticut.
The Red Sox' general case is a simple one. The team stresses the economic and community benefits that new sports stadiums are purported to provide. The Sox have brought government officials to visit the "successes" of collaborations between sports outfits and government -- such as Baltimore's Camden Yards. Just recently the team trucked a delegation out to the new baseball stadium in Detroit. Of course, plenty of other evidence refutes the public benefit of such public-private ventures. Andrew Zimbalist, a professor of economic development at Smith College, says research suggests that none of the new ballparks -- Cleveland, Milwaukee, or Seattle -- have made a positive economic impact. Of course, public-private cooperation has caused fortune to shine on one political leader. The new stadium for the Texas Rangers earned George W. Bush $14.9 million on a $606,000 investment, as well as a place in the political sun. There's no W. for Fenway, however. Just John Harrington, and he's got a bunch of folks gunning for him.In the months since the last baseball season, an organized opposition to the idea of government's financing a ballpark has arisen. A diverse coalition of 13 groups -- from MassPIRG and United for a Fair Economy on the left to Citizens for Limited Taxation on the right -- has come together under the banner Citizens Against Stadium Subsidies. The umbrella group launched a lobbying effort against government money for the Red Sox in April. In a "Dear Member" letter signed by Rob Sargent of MassPIRG, the group wrote, "Taxpayers should not be forced to fund a project that delivers little or no economic benefit except to Major League Baseball, its team owners, and well-connected developers." (Not to mention the big-money free agents the team will attempt to woo with the expected revenues of its new stadium.) The coalition denounced the Red Sox' plan as "a corporate-welfare package designed to support real-estate speculation and team revenues at public expense." Affiliates of the group have been meeting with members of the House and Senate on both sides of the aisle and are intensifying their push against the ballpark.
The opponents' biggest concern right now is a "Pennant Surprise," in which lawmakers would meet behind closed doors and decide funding for the new stadium in the dead of night. In its letter to lawmakers, Citizens Against Stadium Subsidies urged "that any vote related to this issue be postponed until it can be given the careful consideration and full public scrutiny it deserves." In response to this request, the House minority leader, Francis Marini (R-Hanson), told a group of citizens lobbying against the plan that he would "do everything I can to foil an effort like that." In an interview, Marini told the Phoenix: "The Red Sox have been talking about this for a year and a half. We ought to have a reasonable period of time for the members of the General Court to look at and study any plan."
In the meantime, eight members of the Boston City Council also weighed in, with a letter to Governor Paul Cellucci warning of their "grave misgivings" about the state's possibly forking over up to $200 million to the Red Sox. (City councilors Daniel Conley, Stephen Murphy, Michael Flaherty, Paul Scapicchio, and council president James Kelly declined to sign the letter.) Just last week, the council members who wrote the letter indicated their intention to hold hearings to elicit the details of the Red Sox plan. "We ask that the Boston Red Sox come in and make a presentation," says Councilor Mike Ross. "We have questions, and we want some answers."
Not everyone is convinced that the Red Sox don't have the money to get a deal done. Marvin Miller, the first executive director of the Major League Baseball Players Association and a participant in many of the major changes in the management of professional baseball, is convinced the Sox have the necessary funds. After Miller stepped down from his post at the players' union, he helped arbitrate a dispute among the owners of the Red Sox during the 1980s. Miller listened to the owners cry poormouth when the players tried to institute free agency. That's when the average player earned less than $20,000 a year.So he looks at the efforts of the Red Sox with a skeptical eye. "For years and years and decades baseball-club owners have been able, in one way or another, to snooker the public and cities to build them a ballpark. Sometimes they do it without threats, and sometimes they do it by threatening to move their ball club to another city. It's that kind of chutzpah that baseball owners have never been bashful about," says Miller. "The fact that they don't do it doesn't mean a thing. It means they want to wait around until somebody else picks up the tab."
Seth Gitell can be reached at sgitell[a]phx.com.
