Behind the Red Sox shocker

(continued)

by Seth Gitell

The question of what is being sold naturally leads to another: who will be doing the selling? So far it's unclear whether any of the Red Sox limited partners not directly tied to the Yawkey Trust will put its interest in the team up for sale. Will the Aramark Corporation, a food and drink concessionaire, sell what the Boston Herald reports is a 17.45 percent stake in the team? Will team doctor Arthur M. Pappas sell his 4.66 percent stake? Will Harrington unload his 2.33 percent stake? Harrington has thus far brushed off questions about his individual interest in the team, choosing to focus on his duty as a trustee of the Yawkey Trust. On Monday, Harrington told the Boston Globe he would eventually sell his stake, but not as part of the Yawkey Trust sale.

Where we stand The offices of the Boston Phoenix will be displaced if the Red Sox are allowed to build a new park in the Fenway neighborhood. The Phoenix has editorialized that players and fans deserve a new park, but that it would be better placed in a different neighborhood, such as South Bay. To read our coverage of the issue, visit www.bostonphoenix.com/archive/features/fenway.html.

The most interesting player is Aramark. What would happen if a new owner didn't buy out the concessionaire, but wanted to put the food and drink business out to bid? It's easy to imagine Aramark trying to block a new owner from bringing in a different concessionaire to handle ballpark food. Morreale acknowledges that the limited partners have an important role to play in approving the sale of the team. A majority of them must agree to the new owner for the deal to go through.

So let's say the deal gets done. Another question arises: what happens to Beacon Hill's ballpark legislation? The way the legislation is written, new team owners would be eligible to receive the $275 million in government aid -- as long as they build in the Fenway. But if a new owner decides to venture outside this area, all bets are off: the stadium legislation, which refers to Yawkey Way and Kilmarnock Street, is site specific. There could be trouble even if Harrington successfully flips his legislative deal to a deep-pocketed purchaser who intends to build in the Fenway. Generally speaking, legislative deals hinge on public goodwill, so it's possible that choosing the wrong owner -- say, a megabillion-dollar media company -- could be fatal to the project. After all, giving such an owner access to the public coffers seems wrong.

As everyone in this tribal town never ceases to remark, politicians have the power to kill deals they don't like. There's nothing to stop House Speaker Tom Finneran, for instance, from drafting legislation to revoke the Fenway deal if he wants (no one from Finneran's office returned telephone calls by press time). Whether that happens is likely to hinge not only on who the new owner is, but also on how long it takes to complete the sale. When Kansas City Royals president Michael Herman announced the sale of that team, for instance, it took two years to finish the deal -- despite heavy interest from potential bidders. Anything could happen in two years. War could break out, oil prices could skyrocket, and the United States could plunge into a recession -- hey, it's been known to happen. Would the state's leaders then be so quick to spend nearly $300 million of the public's money?

State Representative Byron Rushing (South End and Fenway) is already pushing to set a deadline for the expenditure of public funds on a new ballpark, after which the legislation would become void. Rushing was to meet with other representatives on Tuesday to discuss the matter. Meanwhile, the House must also correct a technical error in the legislation, regarding the application of one of the taxes paying for the project. Still, nearly everyone on Beacon Hill agrees on one thing: no one wants to reopen the deal to give the Red Sox more protection from cost overruns, especially before we know who the new owner will be.

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Even as speculation swirls about potential new owners, some observers are asking whether alternate locations for a new ballpark are back in play. When Mayor Thomas Menino strolled into the Eagle Room at Boston City Hall, baseball bat in hand, to face eight television cameras for a press conference last Friday, he forcefully denied that a sale of the Red Sox meant the end to his Fenway plan for the team. "It's the same location," Menino said. "The site's the site right now." (Menino first received word about the sale around 12:30 p.m. on Friday, when he was attending a health-care conference in the Indian Treaty Room of the White House. He insisted that he hadn't been told in advance and said he was just as surprised as anyone else at Harrington's decision.)

Menino bristled at the idea that other locations for the new stadium might be reconsidered. "The thing I have an issue with is that we've shown you the other sites," he said. "The Red Sox picked the site -- unless the deep pockets want to buy block after block of city land." He also seemed annoyed at the notion that another mayor -- such as Dorothy Kelly Gay of Somerville, Thomas Ambrosino of Revere, David Ragucci of Everett, or Jim Sheets of Quincy -- might make a grab for the team. "A lot of mayors might make an offer," he grudgingly acknowledged. "But why keep changing the sites?"

But the new owner = new site equation is being calculated all over the city -- if for no other reason than because it breathes new life into a tired story line. On Tuesday, Boston Globe columnist Joan Vennochi wrote about a waterfront plan -- not the old Fort Point Channel scenario, but a new one that includes developer Frank McCourt. McCourt's involvement is interesting because he is one of the few players in town who have something that everyone else wants -- land, in his case 25 acres of it. That's enough land, as it happens, to build a baseball park on. By gaining McCourt's help in exchange for a piece of the team, a new owner could shave millions of dollars off the costs of land acquisition and preparation -- which are currently estimated at $140 million for the Fenway, but may be much higher (see "Fenway Neighborhood May Be Too Expensive for the Red Sox," News and Features, May 25).

Another scheme involving McCourt could see him exchange partial ownership of his waterfront parcel for partial ownership of the land where Fenway Park currently sits. This way, the new owners of the Sox could build a stadium on the waterfront at a relatively low price. McCourt, meanwhile, would get to develop land in the Fenway. Almost any scenario involving McCourt is plausible for two reasons -- not only because he owns enough land, but also because from Boston City Council president Jimmy Kelly is sending new, more moderate signals. Kelly was deeply damaged by his role in the South Boston linkage affair -- and he may be willing to compromise on a waterfront ballpark deal if the political price is right.

Before Harrington announced his plans to sell the team, the city council appeared ready to strike down the ballpark deal. (The council must approve land takings and debt for such public projects by a two-thirds margin.) Once the sale was announced, even the minimal momentum for the project abruptly ceased. "If the Red Sox continue to take the stand that they're going to get the deal done before the sale, they are in outer space," says Councilor Michael Ross. He adds that new ownership offers a chance for the team to come up with a more creative plan and look at other locations.

Even if there's nothing to the McCourt-Kelly scenario, what about the Joseph O'Donnell-Suffolk Downs scenario? O'Donnell, an owner of concessions companies, has an interest in Suffolk Downs and could put the team on the East Boston-Revere line in exchange for an ownership stake. Larry Moulter, who helped orchestrate the construction of the FleetCenter and now works as the chief marketing officer of Mirror Image Internet, says, "If a McCourt or O'Donnell owns the land, that's a significant equity contribution to the deal that the Red Sox were unable to make."

The names of both men -- along with others, such as David Mugar, Steve Karp, and Staples chief executive Thomas Stemberg -- will be in the running until the sale of the Red Sox is announced. Any major corporate entity that seeks to buy the Sox would need a local frontperson to help navigate the usual array of Boston political personalities. "Any group that comes in is going to have to have a strong, visible local partner," says Moulter. "That's just how business gets done here."

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The last question, and perhaps the most intriguing of all, is this: now that Harrington has flipped himself out of the hot seat and flipped Menino back in, what's the mayor going to do? The full story of how the Red Sox were forced to make a plan for the Fenway has yet to emerge. With the Yawkey interests out of the picture -- and their legacy of charitable giving gone as well -- 11 of 13 city councilors are now on record against the plan. The legal problems surrounding the project, the constitutional issues surrounding eminent domain, the exorbitant cost of the land takings -- all these obstacles remain as long as the ballpark must be built in the Fenway.

What Menino must do now is either signal an opening to the team to build elsewhere or try to find an owner with Grand Canyon-size pockets who can pay for everything. But even that solution has problems: does a mayor who made his reputation on what he did for the neighborhoods really want to go down in history as the executive who forced the Red Sox to move to Somerville?

Stay tuned.

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Seth Gitell can be reached at sgitell[a]phx.com.