December 11, 2017

The PawSox true value

Holy Cross professor and sports economist Victor Matheson at the Wyman Gordon site in Worcester's Canal District, a proposed location for a minor league baseball stadium.

If Worcester is successful in landing the Boston Red Sox' top minor-league team out of Rhode Island, it'll undoubtedly bring a new level of confidence and excitement to a city always on the search for something to tout.

It'll also surely cost Worcester – and perhaps the state – a lot of money, if stadium deals across the country are any guide. If a Worcester Red Sox stadium were to produce the type of development city officials hope to see, it may be more of an exception than the norm.

"They're almost always sold on the best-case scenario," said Victor Matheson, a sports economist at the College of the Holy Cross. "If the worst-case scenario was still profitable, the owners would do this on their own."

Worcester and Pawtucket Red Sox officials have been tight-lipped about their discussions to bring minor league baseball to the city since discussions in Rhode Island have cooled, but the team's proposed stadium in Pawtucket serves as a guide to what Worcester might have to offer to lure the team to a smaller market: For a $83-million Pawtucket facility, the Red Sox officials are asking the city to put up $15 million and the state to put up $23 million.

Matheson and other sports economists say the public benefit is often over-inflated when it comes to stadium deals, and it would be prudent on Worcester's part to commit to a far smaller amount – $5 to $10 million – to avoid the stadium financing pitfalls plaguing other local governments.

Worcester stadium economic impact

The minor league Red Sox existing stadium in Pawtucket isn't situated in an area where neighboring businesses can take advantage of fans attending the game.

Public officials tout new stadiums as economic catalysts, projects that can kick-start development, change public perception of a city and boost civic pride. Yet, sports economists have long been doubtful of any significant positive economic benefit.

"I'm not really sure where this myth came from that neighborhoods shoot up around a stadium," said Brooklyn-based author Neil DeMause, who has published a book and writes a blog on stadium economics. "It's not something that anyone's really seen anywhere."

In Worcester, luring the Pawtucket Red Sox to the Wyman Gordon site in the Canal District is seen as a way for the city to spread its name, give a new entertainment option and get new construction started in a neighborhood lacking the growth of downtown or along nearby Water or Green streets.

"The move would help us to develop a parcel of land that is perfect for that type of use," said Ed Russo, the owner of the Canal District restaurant Lock 50. "It also would allow us to look forward and revamp some streets, intersections and sidewalks so we could continue connecting the neighborhood, encouraging walking throughout the district.

"And the influx of fans to the games would further support the local businesses for the spring and summer months," Russo said.

The PawSox's longtime home, McCoy Stadium, was built in 1942 and doesn't have many of the fan or player amenities expected of stadiums today. The team hasn't received an especially warm embrace in its attempt to build in their longtime home state, where the Rhode Island government has been reluctant to devote any public funds.

Worcester's city council voted this summer to have City Manager Edward Augustus do "all that is reasonably in his power" to try landing the team, and nearly 100 Worcester-area businesses signed a letter supporting the effort.

If the PawSox were to move, they would leave a metropolitan market in Greater Providence with 1.6 million people (which includes portions of Southeastern Massachusetts) for a Greater Worcester market with 935,781 people (which includes Windham County, Conn.).

Massachusetts, though, hasn't offered stadium subsidies like other states have. Gillette Stadium and TD Garden were both built using private funds, and the state didn't commit to public funding even as it looked in the 1990s that the Patriots may leave for Connecticut.

Stadium subsidy cautionary tales

The most notorious public-spending cases on stadiums are in the top level of professional sports, and they've increased exponentially in recent years.

The new Atlanta Braves ballpark – which replaced one built for the 1996 Olympics – cost Cobb County $400 million. The Bengals' and Reds' stadiums in Cincinnati cost Hamilton County so much – $540 million – it sold a hospital in 2011 to help make up for sports-related tax payments that fell well short of expectations.

Baseball teams playing at the same level as the Pawtucket Red Sox – Triple-A, the highest level before teams like the Boston Red Sox – have moved into expensive publicly owned stadiums. In El Paso, Texas, the city spent $64 million on a ballpark opened in 2014. In 2015, a park opened in Biloxi, Miss., costing the city $36.5 million.

Local media reports indicate in several instances, particularly around parks outside Atlanta and Omaha, Neb., revenue hasn't matched forecasts, and related development hasn't come to fruition.

"It's a terrible business model to try to build a business district around [a stadium,]" said DeMause.

Economists have found that the money fans spend at games would have otherwise been spent on other entertainment in the community.

Matheson said a minor-league ballpark's economic impact is about the same as a 16-screen movie theater complex, in terms of total attendance and amount spent. Gil Fried, a business professor at the University of New Haven, said the economic impact of a stadium is about the same as a Walmart.

Worcester Mayor Joseph Petty, City Manager Ed Augustus, and the PawSox declined interviews for this story.

The Pawtucket stadium

The PawSox's current home offers an example of the challenges of building desireable development surrounding the stadium. McCoy Stadium was built 75 years ago, but is still surrounded by working-class housing, two schools and a few industrial properties. Only a handful of restaurants sit within a short walk from the park.

An economic study conducted for Pawtucket and the PawSox found a proposed $76-million stadium would pay for itself through new revenue.

The ballpark, the study said, would create more than $3 million a year in new tax revenue in the first five years after the park opens and $58.7 million over a 30-year period. The park would directly create $12.7 million a year in economic activity, and $5.9 million in wages, and indirectly create another $10 million in economic activity and $12.7 million in wages, the study said. The study projected benefits from up to $110 million in related development could be built just outside the stadium.

No such study has been done yet for the proposed Worcester site, the so-called Wyman Gordon site off Madison Street a few blocks from Kelley Square.

Those studies – often paid for by officials wanting to justify building a stadium – have their detractors.

"Those things are a piece of junk," said Fried.

A tale of three Connecticut cities

Three Connecticut cities provide different lessons for public stadiums.

In Hartford, the city – which has been close to bankruptcy – built a $71-million ballpark for a baseball team to move about a dozen miles east from New Britain. The ballpark, which hosted its first games this spring, ended up opening a year late and over budget, and has led to lawsuits between the city and the ballpark builder. Development envisioned as a byproduct of the ballpark has yet to come to fruition.

In New Haven, city officials decided years ago the site of its arena would be better served in another use. The arena, slightly smaller than Worcester's DCU Center, was torn down in 2007 but has not been replaced. A proposal calls for a $450-million project including housing units, businesses and a hotel. The city, under then-mayor John DeStefano Jr., decided it would rather be a city of the arts than of sports, Fried said.

"He didn't give a damn about tearing down the old Coliseum," Fried said.

Bridgeport Mayor Joe Ganim said he wants to turn the city's ballpark, which hosts an independent team, into an amphitheater. The team is moving to North Carolina.


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