December 11, 2017

Worcester needs to think logically about PawSox deal

By all accounts, Worcester city officials appear to want to give the Pawtucket Red Sox a big chunk of money to lure them to the Canal District. Team and government officials have been tight-lipped on their discussions, but it is difficult to imagine the Triple A minor league baseball team moving from the state it has called home for nearly 50 years for anything less than what it proposed in Rhode Island: an $83-million stadium with a combination of city and state subsidies totaling $35 million.

Worcester officials are on the right path here in wooing the PawSox to Central Massachusetts. The team would create a buzz much like the Worcester Railers minor league hockey team has done in its inaugural season this fall and then some. With the team playing 71 home games a year in the Canal District, a brand like the Worcester Red Sox would create a strong sense of civic pride and no doubt bolster the neighborhood's businesses.

Despite these positives, Worcester needs to proceed with caution. Bright lights have a tendency to make us all make emotional, less rational decisions.

America is fraught with cautionary tales of over-exuberant municipalities giving too much public subsidies for sports. Hamilton County, Ohio – the home of the Cincinnati Bengals and Reds – is so overleveraged with its $540 million in stadium obligations it had to sell a hospital to make up for the shortfall in revenue. Hartford, Conn. built a $71-million ballpark to move a Double A minor league team 12 miles down the road from a suburb, and now Hartford is on the verge of bankruptcy. A reason Rhode Island's legislature has been hesitant in giving the PawSox what they want is the state is still smarting over the $75 million in bonds it gave for Curt Schilling to expand his now-bankrupt video-game company – the appeal of doing business with a World Series hero outweighed a prudent assessment of his business model.

To assess what kind of value a Worcester Red Sox team would bring to the city, WBJ News Editor Grant Welker talked to three economists from the city, New England and the country. They all warned stadiums' economic impact are typically overinflated and should be considered about the same as a 16-screen movie theater, or even a Walmart. A prudent amount of public subsidy to give to such an endeavor is about $7 million.

In a somewhat similar comparison, Worcester businessman Allen Fletcher is building a $21-million, mixed-use apartment complex near the proposed Red Sox site. For that development, which will bring people to live 24/7 in the Canal District, Fletcher received a $838,000, 10-year tax break from the city (and no state subsidy). Augustus and state officials should consider that a measuring stick when it comes to the Red Sox package.

With the state backing Worcester's efforts – Jay Ash, secretary of housing and economic development, is participating in the PawSox discussions, and Gov. Charlie Baker threw his support behind the effort in early December – it's possible Worcester won't be on the hook for an unwieldy share. Or the state could agree to an infrastructure improvement to benefit the entire neighborhood, such as fixing the Kelly Square traffic problems.

Regardless of if Worcester's discussions are successful in getting the PawSox, the city needs to do a logical assessment of how much it is actually willing to commit to these endeavors. Worcester is a growing market with genuine buzz, and businesses – including sports teams – will want to locate here. No doubt this is an exciting opportunity we'd like to see happen. Whether it is the Red Sox, Amazon, an Abbvie expansion or a new Niche Hospitality Group restaurant, Worcester needs to make smart deals to build on the community's momentum.


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